Peter Limone, CPA, CGMA – President and CFO  

There are many reasons a business should hire an employer of record to outsource back-office support functions. The best reason is to free up your employees to focus on your company’s purpose and contribute to your company’s growth. Getting help in dealing with the stress associated with ensuring that workers are paid correctly and on time and to help with other activities such as benefits administration, can add value to your organization not only by freeing up resources but also by lowering risks associated with employment.

 There is another reason to employ HR outsourcing services; to manage the workers compensation program. This activity is extremely tedious and time-consuming, but is an essential part of the business process. Numerous hours are spent recording the event that gave rise to the claim, coordinating doctor’s visits, reviewing invoices, and unfortunately dealing with lawsuits.  There are employees that feel it necessary to hire an attorney in order to be properly represented.  When this happens, the process can add months if not years of work on your HR staff.

 In addition to time spent processing claims, each state constantly reviews and changes worker’s compensation laws to keep up with the times.  As an example, in 2016 California passed the following new laws:

SB 623 provides that a person shall not be excluded from receiving benefits under the Uninsured Employers Fund or the Subsequent Injuries Benefits Trust Fund based on his or her citizenship or immigration status.

SB 542 clarifies medical provider network laws, including requirements regarding information that a medical provider network must post on its website.

SB 560 allows the Contractors State License Board to investigate and enforce the obligation of licensees to secure valid and current workers’ compensation insurance. It also requires the licensing board to submit personal information regarding licensees, described above, to the Employment Development Department.

Keeping up with changes across all 50 states is a daunting task for anyone.  Payrolling or Employer of Record companies do this work for you.

How is outsourcing workers compensation claims management beneficial?

Workers comp management requires meticulous record-keeping and attention to detail. One reporting error can have serious financial implications for an organization. Here are some of the advantages to hiring a third-party to manage this process:

Streamlined communication: An employer of record will be in direct contact with everyone involved in the claims process, including the workers themselves. This data can then be reported back to the business owner to keep him or her updated on the process.

Faster reporting times: When an employee gets hurt on the job, time is of the essence. An employer of record can quickly gather all of the necessary data and get the process moving along in an efficient manner.

The best payrolling companies subscribe to triage services, where a qualified medical professional such as a nurse is available to consult via phone 24 hours a day, 7 days a week.  This allows the employee to determine whether they can deal with the injury themselves or if they need to visit a clinic. Using a triage service like Medcor has historically reduced claim costs and has increased employee’s satisfaction with how the incident was managed.

Running a business, particularly with respect to back-office functions, isn’t easy. HR outsourcing services is a strategic alternative that must be evaluated.  Is it right for you? An experienced employer of record can help you avoid expensive issues that may arise with your contract or contingent workers. Reach out to Innovative Employee Solutions and find out more.

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