PEOs can improve a roofing company in many ways. A Professional employer organization can be especially beneficial to roofers for a number of reasons.
1. PEOs provide roofing companies access to affordable workers’ compensation insurance.
Many insurance providers will not take on risk from roofing companies because of the high rate of workers comp claims in the industry. The average insurance claim from a roofing company is also much more costly than the average claim in other industries. This leads to extremely strict risk assessment guidelines set by insurance carriers which makes it difficult for many roofers to obtain coverage. PEOs provide employees of it’s clients with workers comp insurance and absorb the risk associated with potential claims. The coverage is often offered at a discounted rate when compared with the state minimum rates. Roofers pay one of the highest rates of workers’ compensation insurance of any industry. Florida roofers pay over 18% of the employee’s payroll.
2. PEOs insure compliance with all state and federal employment regulations.
There are over 150 laws and regulations that roofing companies must comply with to operate legally. The Fair Labor Standards Act (FLSA), the Occupation Safety and Health Act (OSHA), and the Federal Employees’ Compensation Act (FECA), are the most noteworthy. Employers are required to remain in compliance with these regulations to avoid fines and penalties. A roofer who fails to comply with any of the federal or state regulation can lose their business. PEOs assist roofing companies and assume responsibility in some cases for compliance with these regulations.
3. PEOs handle all payroll and assume liability for payroll taxes.
Payroll can often be mundane and extremely labor intensive. The process can be extremely frustrating for many business owners with little accounting experience. Payroll taxes must be calculated correctly and paid on time. One mistake can cost thousands in back taxes, interest, and penalties. PEOs allieviate this liability. It becomes the legal responsibility of the PEO to calculate and pay the corresponding payroll taxes. The employer’s contribution to FICA, FUTA, SUTA, Medicare, and Social Security are all paid by the PEO. The PEO becomes responsible for the corresponding tax liability of the roofer’s reported payroll. This means that roofers can protect themselves from the consequences of an incidental mistake that leads to a costly fine.
PEOs can be extremely valuable to roofing companies. The rate of workers’ comp insurance for roofers is cost prohibitive for many smaller roofing companies. In Florida the rate is over 18% of the employee’s payroll. Georgia is even higher at over 30%. Depending on the size of the company and the amount in payroll they have roofing companies can receive up to a 30% discount on workers’ comp insurance. That can be a significant savings on coverage. Compliance with employment regulation and payroll taxes can save roofers thousands in penalty’s. Overall hiring a PEO is something every roofing company should consider.
