The Growing Gig Economy and Workplace Risks
The gig economy has been on the rise in recent years, offering workers the flexibility to choose which jobs they want to take, when they want to work, and where they want to be located. While freelance or contract-based work can be a great option for many people, there are still workplace risks to keep in mind.
While there are many different types of jobs for freelancers and contracted workers, some common industries include high-risk jobs like construction and manufacturing. If you’re a gig worker, understanding workers’ comp solutions and how to remain covered is crucial.
Understanding Workers’ Comp for Freelancers and Contractors
Whether you’re a full-time employee or contracted worker, having workers’ comp coverage is imperative. Workers’ comp coverage helps protect workers financially in the event of an accident on the job. It can also help protect the company if someone gets injured onsite.
While mid-sized and large organizations typically have the ability to offer benefits packages to their employees, that may not be the case for small businesses or companies that hire independent contractors. Insurance companies typically require a large lump-sum premium each year. Small businesses, however, may not be able to afford that. Additionally, freelancers or contractors are hired on a project-by-project basis and won’t often need an entire year of coverage.
How PEOs Offer Workers’ Comp Solutions for Gig Workers
Professional employer organizations (PEOs) specialize in handling the administrative tasks for businesses—from payroll and workers’ compensation to safety programs and risk management. Let’s take a look at how they offer workers’ compensation solutions for gig workers.
1. Pay-As-You-Go Programs
Because freelancers typically work on a project-by-project basis, independent contractor protection can be challenging to navigate. Traditional insurance generally requires a lump-sum premium payment, and the type of coverage and duration of protection are usually standard across the board.
PEOs offer pay-as-you-go workers’ compensation programs that work seamlessly for freelancers and independent contractors. Pay-as-you-go solutions give workers the flexibility to have the amount of coverage they need, when they need it.
2. Safety Training Programs
Workplace injury can occur in any setting and in any industry. Creating a safe work environment by training each worker properly can make a massive difference on the volume of workers’ compensation claims.
PEOs often implement safety training programs for the workforce to help ensure everyone is up to date with current policies and protocol. This can be particularly helpful for gig workers who aren’t a permanent part of the team, and who may transition often between companies. Independent contractors will have their own employee dashboards where they can watch safety videos and educational content.
3. Automated Payroll
Automated payroll is especially beneficial for gig workers who may work varying hours or shifts each week. Workers will have access to an employee dashboard where they can track their time. Employers can utilize automated payroll systems to ensure each worker gets paid the correct amount and on time, without fail.
4. High-Risk Work Protection
In some cases, insurance companies don’t offer protection for high-risk workers. Great PEOs like PEOPayGo provide coverage no matter what your job is as an independent contractor or what industry you’re in.
5. Unique Coverage to Meet Your Needs
Each independent contractor and freelancer has their own specific needs when it comes to the type of coverage they need and the duration of time they need it. PEOs specialize in offering unique coverage that can meet the needs and timeline of each individual worker.
Additionally, PEO’s coverage options are typically reasonably priced. They’re able to group each of their clients in together in order to get the best pricing and packages possible from insurance companies.
Protecting Yourself with PEO-Backed Coverage
As a freelancer, independent contractor, or small business owner, you likely have a lot on your plate as it is. Workers’ compensation coverage should be easily accessible and hassle-free no matter what you do for work. When you work with a reputable PEO, gig workers are supported through pay-as-you-go workers’ comp programs, safety education, accurate and timely payroll, high-risk protection, and unique coverage to meet their specific needs.
If you’re a gig worker or small business owner, PEOPayGo is here to help. Our expert PEO solutions make it easy to meet your workers’ compensation requirements while staying focused on growing your business.
Contact us today to get the coverage and support you need!
The Impact of Payroll Errors on Businesses
Payroll errors can have a major impact on businesses. They can lead to increased employee turnover, decreased productivity, financial losses, tax penalties, and much more. Understanding payroll errors and the impact they can have on businesses is crucial for helping to avoid mistakes. If you’re a business owner or HR manager, it’s important to have a plan in place to help ensure payroll accuracy.
Let’s take a look at some of the common payroll mistakes and their consequences, as well as how PEOs can step in to offer compliance support and help businesses avoid costly errors.
Common Payroll Mistakes and Their Consequences
Paycheck mistakes can be costly for any organization. With a better understanding of what these errors are, however, it can be easier to avoid them.
1. Misclassifying Employees
Classifying employees correctly is essential when it comes to payroll processing. As an employer, it’s crucial to understand the difference between employees and contractors, and to know which is the accurate classification for your workers. There are certain rules and regulations when it comes to overtime pay and benefits that may apply to some workers while others may be exempt. Incorrectly classifying your employees can lead to legal repercussions, IRS audits, and a decrease in employee morale.
2. Incorrect or Incomplete Records
Managing payroll records manually can leave lots of room for error as well. As a business owner or HR manager, you likely have your hands full with work. Keeping track of spreadsheets and employee pay can be incredibly overwhelming. Incomplete payroll records can lead to underpaying employees as well as falling out of compliance with state and federal tax laws.
3. Miscalculating Wages and Overtime Pay
Miscalculating wages and overtime pay isn’t uncommon when it comes to manually processing payroll. It can be difficult to accurately track employee hours and overtime when you have so many other tasks on your plate. Underpaying employees can reflect poorly on the company. Overpaying them, however, can be just as detrimental to morale—as you’ll be expected to ask for that money back.
4. Missing Expenses
Whether it’s due to data entry errors or employees filing their expenses too late, these missing expenses can have an impact on your business and its compliance with state and federal laws. Overlooking reimbursable expenses not only leaves your employees feeling frustrated, but it also creates more work for you to do after the fact.
5. Submitting Taxes Incorrectly
Manually processing payroll leaves room for human error in tax submission. Whether an employee was incorrectly classified initially or wages were miscalculated, tax mistakes can result in issues with the IRS, penalties and fines, as well as time spent backtracking to fix these errors.
How PEOs Help Prevent Payroll Errors and Ensure Compliance
Professional employer organizations—PEOs—step in to handle the administrative tasks for your business. If you own a business, it’s likely that your focus will need to be in other areas, so having payroll experts to support you can be incredibly beneficial.
1. Streamlined Payroll Processing
Essentially everything a PEO offers can help to streamline payroll processing. PEOs are experts in the field, and they utilize specialized payroll software to help simplify the process and ensure accuracy. Time tracking, overtime pay, benefits, and paid time off can all be managed in one place, and then integrated together.
2. Expertise in Compliance
PEOs have made it their mission to know all about state and federal tax and labor laws. These rules and regulations can be incredibly complex and take time to fully understand. PEOs expertise in compliance can help you save money in the long run by avoiding potential fines and penalties.
3. Utilizing Automation for Accuracy and Efficiency
When you work with a PEO, employees will have their own portal to access and adjust their information. This eliminates the need for manual data entry on your part as an employer to help reduce human error. Automation also means employees will get paid on time every time.
Simplify Payroll with PEO Services
If you’re ready to eliminate payroll errors, ensure compliance, and boost employee satisfaction, PEOPayGo is here to help. Our trusted PEO services simplify payroll, deliver accurate paychecks, and give business owners and HR managers peace of mind.
Contact us today to streamline your payroll and keep your team happy!