Amid the Debate on Capitol Hill over the Minimum Wage, an Important Benefit for Small Businesses May Be Overlooked Says NAPEO.WASHINGTON -- Tucked into the $8 billion of tax breaks for small businesses in the Senate's minimum wage bill is one concerning a little-known industry called professional employer organizations A professional employer organization (PEO) provides outsourcing of payroll, workers' compensation, human resources and employee benefits administration. It does this by hiring a client company’s employees, thus becoming their employer of record. , or PEOs. Unlike the other amendments, this one would cost taxpayers relatively little. And rather than a temporary tax cut, it would help small businesses permanently. Yet it is likely to face one of the hardest roads to passage. Small businesses outsource to PEOs time-consuming human resources The fancy word for "people." The human resources department within an organization, years ago known as the "personnel department," manages the administrative aspects of the employees. operations such as paying workers, deducting and remitting their taxes and managing benefits. This lets small businesses focus on making a profit. It also lets them offer Fortune 500-style benefits such as a 401(k) and health benefits because they are part of a larger group. Few workers at small business have access to comprehensive benefits except through a PEO. Whether any of the seven provisions of the Senate's minimum-wage bill become law is uncertain because the House bill doesn't include them. Democratic and Republican supporters in the Senate say the amendments are crucial because without them the president will veto veto [Lat.,=I forbid], power of one functionary (e.g., the president) of a government, or of one member of a group or coalition, to block the operation of laws or agreements passed or entered into by the other functionaries or members. In the U.S. the bill. The provision would make it explicit in the federal tax code that PEOs whose executives pass background checks, post a bond and file audited financial statements can collect and pay taxes for their small-business clients. The provision protects small businesses while clarifying IRS An abbreviation for the Internal Revenue Service, a federal agency charged with the responsibility of administering and enforcing internal revenue laws. rules for PEOs. But the AFL-CIO AFL-CIO: see American Federation of Labor and Congress of Industrial Organizations. AFL-CIO in full American Federation of Labor-Congress of Industrial Organizations U.S. opposes it, even though PEOs don't hinder hin·der 1 v. hin·dered, hin·der·ing, hin·ders v.tr. 1. To be or get in the way of. 2. To obstruct or delay the progress of. v.intr. union organizing and actually extend protections to workers such as the Family Medical Leave Act usually available only to workers at larger businesses. (In fact, the typical PEO client, with 15 workers, is unlikely to be subject to union organizing.) "We're a little surprised at the unions," said Milan Yager, executive vice president of the National Association of Professional Employer Organizations. "After all, we both seek the same thing: Better benefits and health care and a solid retirement plan for workers. There's just no downside Downside The dollar amount by which the market or a stock has the potential to fall. Notes: You might hear someone say that the downside on stock XYZ is $10. What that means is that the stock could fall by this amount if things got bad. to this amendment; both small businesses and their workers will benefit." The Senate continues to debate the bill this week. |
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