New Legislation Protects Businesses by Updating Nevada PEO Laws

The bill, which was overwhelmingly supported by the small business community and professional employer organizations (PEOs), modernizes a 1998 statute for the more than 60 PEOs registered in Nevada. Legislation signed into law by Gov. Jim Gibbons provides for flexibility in obtaining workers' compensation coverage and ensures uniform financial standards. This will allow more security to the thousands of Nevada small businesses who outsource human resource management, employee benefits, payroll and workers' compensation to a PEO.

"PEOs provide a cost effective option for small business owners and their workforce who would not otherwise have access to benefits such as health coverage and retirement savings plans," said William J. Rosado, of ManagedPAY, theLas Vegas headquartered PEO that help lead the National Association of Professional Employer Organizations' grassroots legislative initiative. "This legislation further protects small owners and allows them the time to concentrate on what they do best: build their business."

A small business will contract with a PEO to help manage increasingly complex employee related matters such as health benefits, safety management, workers' compensation claims, payroll, payroll tax compliance, unemployment insurance claims and provide expertise in human resources management. By entering into a co-employment relationship, a PEO helps the business owner by handling most of the HR administrative responsibilities. They also work with clients in managing employment practices, employee handbooks and compliance with federal and state labor regulations.

According to a 2005 report by the U.S. Small Business Administration, firms with fewer than 20 employees spend more than $7,000 per employee to keep up with federal regulations. That's an additional $2,400, or 45 percent more per employee than larger companies pay to comply, the report found.

All provisions of the new law become effective by January 1, 2010. Nevada law will be become uniform with the stricter financial standards found in other states where PEOs are flourishing nationwide as a $68 billion industry with double digit growth for the past five years. Even more importantly, the law clarifies the treatment of state tax credits and other economic incentives for business owners sharing their employer responsibilities with a PEO.

Under the law, Nevada PEOs will benefit from an increased ease of compliance through the use of electronic filings of licensing documents.

About NAPEO

As the recognized Voice of the PEO Industry(R), NAPEO represents nearly 400 professional employer organizations (PEOs). The PEO industry has matured to $68 billion with double digit growth annually. As NAPEO enters its 25 year, the potential market remains promising with high client retention rates, a projected 20 percent increase in revenues for 2009, and the current untapped market now serving 300,000 business owners and 2 to 3 million workers. PEOs allow clients to "reduce costs and free up time to devote to revenue generating activities, improvements that can be instrumental to gaining competitive advantage," according to research by the Society of Human Resource Management Foundation. Visit the NAPEO at www.napeo.org.

SOURCE National Association of Professional Employer Organizations (NAPEO)

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