Employees without the headaches

First, there was the nightmare of payroll management, withholding taxes, and additional accounting and reporting responsibilities. Less obvious, but even more onerous, were concerns about risk management in areas such as compliance with human resource laws and workers' compensation. Even in the smallest practices, these employee-related responsibilities can be a distraction from the core business of patient care.

For many employers, co-employment (sometimes erroneously referred to as employee leasing) has proven to be a workable solution to this perennial problem. Whether you have a large staff or are just thinking about hiring your first employee, you should know how co-employment might help you to remain focused on running your practice.

First, it's important to understand that a co-employer is not a temporary staffing agency or a simple payroll service.

A temporary staffing service hires its own employees and assigns them to supplement a client's workforce to compensate for employee absences or shortages, or seasonal workloads. Traditionally, temporary workers are a small portion of a client's workforce, and they remain employees of the staffing service.

You, as co-employer, retain full hiring/firing authority, day-to-day management of your employees, and the normal operation of your practice. You schedule employees' time, assign work duties, and maintain the same personal relationship that you would under the conventional arrangement.

In other words, for a fee, the PEO assumes responsibility and liability for the business aspects of employment, such as risk management, personnel management, human resource compliance, and payroll and employee tax compliance (workers' compensation). You, as the client-employer, retain responsibility and authority for on-site management of your employees' work responsibilities.

How can co-employment help?

"You may not have the time and the necessary interviewing skills to recruit employees for your office staff," said Bob Kustka, president of CHR Partners, Norwell, MA. "Even hiring a receptionist can be a time-consuming job, and hiring the wrong person can be a costly mistake. The right PEO will have the necessary recruiting and assessment experience to take that responsibility off your hands." Of course, if you prefer, you may continue to do your own interviewing and hiring of new personnel.

"We prefer to do our own interviewing and hiring," said Deepak A. Kapoor, MD, chief executive officer, Integrated Medical Professionals, Hicksville, NY. "Though we are very pleased with our PEO, Prestige Employee Administrators, we feel that the clinical insights needed when assessing potential employees for a medical practice make it preferable to do our interviewing and hiring in-house."

Once you enter into a co-employment agreement with a PEO for one or more employees, that firm will take over the full responsibility of payroll administration, including preparation and timely delivery of payroll checks. Most PEOs allow employees to choose between direct deposit and delivery of a paper check on payday. The PEO will do all the computations and make the payments of state and federal payroll taxes, even provide a full slate of health-care and other employee benefits.

Terminating an employee is one of the most dreaded tasks for many practitioners. When the employee is part of a co-employment arrangement, some PEOs will handle that difficult responsibility or will work with you to make certain that all applicable laws are carefully observed.

According to Jasen A. Burcham, national sales director of Shelby Township, MI-based PML Worldwide, one of the country's oldest PEOs, their sheer size gives them the advantage of buying power not available to smaller employers.