HR Outsourcing: How to Choose the Right Firm

Outsourcing is a great option for business owners who want to save time and run their company more efficiently. When you make the decision to outsource payroll, you are also turning over your payroll tax responsibilities and confidential company information. Mitigate risk by obtaining references and getting to know your outsourced personnel. When hiring a Human Resource Outsourcing (HRO) firm, verify that they are a reputable company and are a true business partner who fits your corporate culture. The outsourced company you choose should be licensed, insured and bonded. If you are considering outsourcing, ask yourself these simple questions: What are my responsibilities and risks as an employer? What are my risks and responsibilities if I outsource? Consider these three major areas of risk: 1. IRS/Tax Compliance. Mishandling tax issues include penalties and additional taxes. When you outsource, the HRO collects and remits payment on your behalf for payroll taxes, including Federal and State unemployment taxes, and workers’ compensation payments. Often times the HRO is assuming the liability through co-employment- make sure you understand the structure and transfer of any liability. 2. Employment Law. Federal, State and local employment laws can be a complicated set of rules and requirements. If you are not educated in employee rights, minimum wage amounts and processing of hiring, disciplining and firing employees, you can end up with fines and penalties and lawsuits that can put any company directly out of business. When you decide to outsource, you are obtaining access to knowledge regarding laws and regulations to minimize your risk of legal liabilities, which can be a huge benefit to your organization. Make... Read More