COVID-19: How insurance brokers can best serve small-business clients

Insurance agents and brokers who partner with HR experts offer clients a valuable resource during these turbulent times.

It is imperative that employers work with their HR team or consult with employment counsel to ensure they are compliant with any new federal COVID-19 related laws as well as those issued by state and local jurisdictions. (Shutterstock)

Small and mid-sized businesses worldwide have swiftly adapted to the changing environment brought on by the COVID-19 pandemic. The situation has proven to be extremely dynamic and will only continue to raise critical questions for insurance agency clients who want to ensure they have the best resources and protections in place.

So, how can insurance agents help their clients survive these turbulent times?

No simple road map

As employers grapple with the sobering economic impacts of COVID-19, insurance brokers who partner with HR experts such as Professional Employer Organizations (PEOs), can offer clients a valuable resource to focus solely on the increasingly complex people side of their businesses.

The extraordinary pace of change and uncertainty in the marketplace has never been more daunting. A PEO with an experienced HR compliance and risk team stays on top of new federal, state and local employment and safety rules, and can create new or updated workplace policies to support them, with quick implementation.

Some PEOs also may have dedicated resources to help clients administer tax credits and other benefits for which they may be entitled as part of the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

Despite some early confusion regarding clients of PEOs, both The Treasury and the IRS recently updated guidance that makes clear that PEO clients can claim these tax benefits directly.

Guidance on critical HR issues

From managing urgent payroll issues to processing new sick time and family leave requests, PEOs can provide vital HR support when your clients need it the most.

Below are just a few best practices — based on current information — that employers should be aware of and track over the next several weeks and months.

New time-off policies

Employers should continue to honor the paid time-off and sick-leave policies that are currently in place if the business is still up and running. Those companies also should follow the new federal guidance under the Families First Coronavirus Response Act (FFCRA).

The FFCRA includes the Emergency Paid Sick Leave Act and Emergency Family and Medical Leave Expansion Act, which provide the framework to provide these benefits to employees. Again, it is imperative that employers work with their HR team or consult with employment counsel to ensure they are compliant with any new federal COVID-19 related laws as well as those issued by state  and local jurisdictions.

For example, in states such as New York, available benefits for extended family leave are greater than the federal benefits. The fact is, for many multi-state employers, implementing coronavirus-related policies, and fielding questions from employees, may be a full-time job in and of itself for the foreseeable future.

Pay cuts, furloughs, and layoffs

To comply with social distancing guidance and manage economic challenges at this time, staggered shifts and reduced employee hours may work well for some employers, especially those that want to avoid furloughs and layoffs to the extent possible.

For some businesses, understanding the implications of a furlough versus a layoff can be confusing. With a furlough, the employee will not be separated from the company and will eventually resume work, much like a family or medical leave. With a permanent or temporary layoff, the employee is separated from the company and may or may not later be rehired. PEOs can support clients through these tough but often necessary actions and help them make the best decisions for their business and employees.

In the selection process for furloughs or layoffs, employers should consider several factors such as an employee’s job performance, classification and knowledge along with what skill sets are instrumental to meeting the company’s primary goals during the difficult time. Companies with no formal employee performance documentation on file may have to opt for alternative layoff standards, such as seniority. It’s important to keep in mind that federal and state wage payment laws must always be followed. These are all issues that a PEO can handle on behalf of clients.

Managing remote employees

Managing a remote workforce can be a challenge for any organization, but it can be especially difficult for smaller business clients. Companies with sales teams, client service and administrative staff that typically share an office space have grown accustomed to face-to-face interaction. Having to rely solely on emails, calls, instant messages and video conferences versus direct communication can present a variety of unexpected stressors.

HR consultants can help their clients by sharing best practice guidance on manager and supervisory skills such as how to create task-driven assignments that have clear, measurable results, and how to communicate them in a virtual work environment. This can help companies reduce the risk of productivity loss and help keep workers engaged during this period and beyond.

Value-added service

Businesses are always looking for best practice guidance, especially during a crisis. The COVID-19 crisis is simply unprecedented. Best practice guidance is being developed in real time by experts in workplace management, employment law and the insurance sector.

PEOs and insurance industry professionals have greater accumulated experience dealing with crises, making them formidable solutions partners for clients today. Small and mid-sized businesses who may not have considered outsourcing their HR and employee compliance before may well be thinking twice. Dealing with this pandemic will require connecting with clients in new and different ways. PEOs and insurance broker partners can work together to make those connections more meaningful and valuable than ever before.

Alex Pisani (apisani@engagepeo.com) is the general counsel and executive vice president of sales for Engage PEO, a professional employer organization providing HR outsourcing solutions to small and mid-sized businesses across the United States. These opinions are the author’s own.

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