What does a PEO Service Do For Your Company?
New Rules for Temporary Employees in Ontario
A Professional Employer Organization is not and should not be considered a temporary help agency; even though there are many Professional Employer Organizations that are part of a bigger picture within many standard staffing firms. A company requiring pay rolling services for their pre identified employees have a tendency to turn toward the staffing firm presently assisting them with recruiting for this service, and often, due to that demand, staffing firms decide to open PEO divisions. This is quite a common practice. Where it gets to be a more complex matter and can result in legal conflict in this scenario, is that the rules mentioned in our blog: New Rules for Temporary Employees in Ontario, can be applicable to both the standard staffing agency and the PEO within, as both divisions/companies are one and the same.
If the PEO is uniquely a PEO then most of those laws mentioned aren’t even applicable to them and so there is no conflict. Let’s bring some clarity and show you how the PEO can make a difference:
1. Finder’s Fee Restrictions: There are no finder’s fees when an employee is managed and paid through a PEO because the PEO did not recruit that employee and does not provide any recruiting services.
2. Prohibition against charging fees to temporary employees: Fees are never charged to the employee as the PEO comes into contact with the employee only when the company refers the employee to the PEO.
3. Information regarding assignment: The PEO will prepare an agreement between the employee and the PEO reflecting precisely the information provided by the company. The PEO becomes the employer of record and therefore a Human Resources Manual is handed to the employee to help guide them on who their employer is, how the employer (PEO) can assist them with different issues and so on…
4. Temporary Layoffs: Upon end of contract, even if for a short period of time, an off boarding process is performed: record of employment is issued to the employee, applicable severance is paid out to the employee, closure to the employee file is immediate and therefore the employee is free to apply and work for any company of their choice, even the company that they were working at through the PEO.
5. Termination and Severance Obligations: Severance obligations are clearly outlined in the Human Resources Manual and discussed with the Employee. As mentioned in item #4, immediate action is taken so that the employee is not penalized.
As we’ve outlined in previous posts, PEO’s provide companies with a streamlined solution that ensures all best practices are followed in regard to contingent workforce management, saving the company time and money, and ensuring the exposure to worker misclassification or co-employment penalties are minimized or eliminated. Working with a temporary help agency’s in-house PEO service may not provide the same level of legal protection and security for your company. These are only some ways that a PEO can make a difference. Get your questions answered; make certain your company isn’t at risk because it can be expensive if you are found to be non-compliant in these matters, the financial penalties imposed are steep. Find out more, it's worth it!
