The National Association of Professional Employer Organizations (NAPEO) chose Marjorie “Midge” Seltzer as the new chair of its board of directors at its annual conference in October. Seltzer is president and COO of Modern Business Associates, Inc., (MBA) in St. Petersburg. Prior to joining MBA, Seltzer practiced international law as a litigator and transactional attorney in Miami. She also serves on the Florida Department of Business and Professional Regulation Board of Employee Leasing Companies. Florida Underwriter spoke with Seltzer about the challenges and opportunities in the PEO industry as the national association begins its 25th anniversary year.

Q. Your industry's role in helping businesses provide health care to workers is well known. How challenging has it been to continue providing this benefit at an affordable level for your business clients and workers? What can you tell us about the debates in Washington?

A. PEOs are critical to the solution of expanding health benefits in the workforce. I have been to Washington a number of times recently to make sure some practical solutions from Main Street are heard on Capitol Hill.

As members of Congress are discovering, it is a huge challenge finding solutions to providing health benefits to America's working men and women. For workers of larger businesses, it is mostly an issue of affordability; for workers of smaller businesses, it is affordability and availability.

PEOs offer a myriad of plans, and this choice is critical because the competitive issues of our business clients demand richer benefits for some and more modest benefits for others. In this economy, employees are increasingly required to contribute at least some of the costs. Some employers view this as a permanent change and others see it as a temporary move, necessary to ensure an economic recovery.

As more businesses shift a greater financial burden of health care to workers, consumer-directed plans are going to be more prevalent, and the role of a PEO is going to be even more essential.

Q. As this is written (in early November), what aspects still on the table in the health-care reform bills would impact your services the most? Which would be best for all concerned? How would a public option, a trigger, or an exchange fit with what you provide?

A. However the debate ends, all of the proposals being considered by Congress include plans to expand coverage. Regardless of the outcome, none of the solutions will be easy to understand or simple to navigate. Based upon the final triggers, PEOs may be one of the few solutions for many businesses required to provide health benefits. For smaller businesses under the trigger, PEOs may have a role in working with state insurance exchanges in helping workers understand tax incentives or benefit plan offerings. With the additional choices, PEOs will become even more integral to their clients' success.

Q. Two queries about the massive layoffs in the current recession:

What labor law requirements have PEO business clients needed the most help with?
What impact has the extension of the unemployment insurance time-table had on business clients?

A. It would be too easy merely to say our business clients need help with all the employment laws. Regrettably, few business owners have the resources or time to explore the complexities of Wage and Hour laws, reduction-in-force procedures, or how to take proactive steps to avoid possible litigation related to hiring or terminations. One of the most important services a PEO offers is improving a client's compliance with employment laws. Most people are familiar with federal laws that prohibit discrimination on the basis of race, color, religion, sex, national origin, age (40 and older), disability, citizenship, and veteran status.

In Florida, it is unlawful to discriminate on the basis of marital status, as well. But that is just the tip of the employment laws. Even reducing a worker's hours has to be done carefully to avoid litigation. PEO human resources professionals educate our business clients on these statutes and regulations and encourage employment practices and decisions that do not run afoul of any laws.

As you referenced, unemployment insurance has been extended in Florida from a maximum of 26 weeks to, depending on the circumstances, a maximum of 59 weeks. There is also a proposal in the U.S. Senate to extend benefits as much as 20 additional weeks. Some PEO clients have experienced layoffs, while others are expanding their businesses in preparation for the recovery.

What is important for all businesses to recognize is that unemployment insurance (U.I.) costs are rising even for businesses without any layoffs. U.I. costs are in part based upon experience. However, another part of the costs reflects socialization of U.I. expenses. Across the board, U.I. expenses are going to increase next year. PEOs provide guidance in handling unemployment claims, including preventing fraudulent claims. We also assist in hearings and with the complex unemployment insurance system as a whole.

Q. You have pledged to seek more stringent state statutes through the adoption of a standardized PEO act, which aims to provide additional security to the millions of small businesses that outsource human resource management to a PEO. What exactly needs standardizing? Is Florida a place this would apply?

A. Thankfully, Florida was one of the first states to have a strong statute clarifying the rights and responsibilities of the PEO industry. Florida already has strong consumer protections, including tangible accounting net-worth obligations and the requirement that the PEO maintain positive working capital, including adequate reserves for all taxes and insurance. NAPEO is working to ensure that all state statutes have clarity regarding professional licensing obligations for business clients in a PEO arrangement. While PEOs are legal and operating in all 50 states, 35 states have comprehensive PEO statutes. Our goal is to expand the standardization of operational recognition and consumer protections to all 50 states to make it easier for business clients to use and enjoy the benefits of a PEO.

Q. Florida's current NAPEO Leadership Council representative is Craig Hill, president of Paychex Business Solutions, Inc., of St. Petersburg. What are some Florida-specific issues you and he will be addressing?

A. Craig and I work well together on many national and Florida-specific issues. In Florida, we currently are tackling high unemployment and corresponding unemployment tax rates and health-care reform issues. NAPEO will be working with our local members to provide education to our business clients in these critical areas. One of the values PEOs bring to their clients is education regarding the ever-changing world of employment law compliance. Florida's minimum wage is subject to review once a year. NAPEO works with its local members on these types of issues, helping each PEO alert its clients to changes in the federal and state minimum-wage laws. This summer, Florida's military affairs statute was amended to provide greater protections to National Guard members who seek to return to work after active duty. More recently, the National Defense Authorization Act was signed into law, expanding certain Family and Medical Leave Act rights for active duty members of the armed forces. PEO clients have been and will continue to be updated regarding such employment law changes.

Q. A directory of PEOs in Florida indicates all but a few are on the west coast or in the Panhandle. Why the clusters?

A. Funny you should ask. I have always said that Florida — and the Tampa area specifically — is the Silicon Valley of PEOs. As mentioned earlier, Florida was one of the first states to have a PEO statute, and this has created an environment where PEOs, our business clients, the public, and regulators work together to ensure strict adherence to best business practices. Several of the first PEOs in the state began on Florida's west coast — and the rest is history.

Special Reports /

Q&A With Marjorie &quot;Midge&quot; Seltzer of NAPEO

Related Stories

Recommended For You

Q&A With Marjorie "Midge" Seltzer of NAPEO