Workers’ comp law is different in every state, and it’s downright complicated in many. So much so, that staffing companies may choose to avoid doing business in some states. California and New York are two examples of states that frankly discouraged employment through their challenging workers compensation laws. Staffing firms with multiple class codes also have to keep their ducks in a row to make sure their coverage is sufficient to cover different levels of risk associated with the different codes. Staffing companies may not realize, but they can get state and client “carve outs” through a professional employer organization (PEO) or employer of record (EOR) that Work Comp Staffing Solutions would be happy to refer you to.
To use one example, health care is a huge industry with numerous staffing needs. California is a health care mecca for people and, as such, has numerous prominent hospitals and health care facilities. But considering how Byzantine the laws can be, staffing companies, unless they’re already established there, want to steer clear of the state. It just so happens that if your company has a policy through a carrier or state fund in some states, you can carve out your coverage through a PEO in another more difficult state—like in California. This lets the PEO handle the compliance related to state-specific workers’ comp regulations, so you can focus on your business.
The same benefit is available to staffing companies individual clients—”client carve outs.” Many staffing firms provide staff for different industries and professions. In this case a PEO or EOR, will look at each of the staffing company’s clients, and provide workers’ comp coverage for a specific client. A client carve out will depend on whether the number of employees at that staffing companies client is sufficient to cover the risk and that client has a good work comp history. The client employees must also be distinct, that is a staffing agency can’t shift temporary employees from one class code to another at the same client or from one client to another. Staffing companies that employ different class codes (like white collar and blue collar workers) may have separate divisions for these 2 distinct types of workers.
For information on PEO’s and other creative workers’ compensation solutions. Please call us for a FREE workers’ compensation quote at 202-302-1212. Or visit us as www.StaffingCompSolutions.com.
All the best
David Schek
david@StaffingCompSolutions.com
President-Work Comp Staffing Solutions