Changes to PEO Act Offer New Options for North Carolina Workers’ Compensation Providers
On September 15th, Governor Perdue signed amendments to the North Carolina Professional Employer Organization Act intended to aid businesses who use PEOs to handle their North Carolina workers’ compensation and other benefits.
The NC Senate and House passed SB 1029 unanimously. The bill’s passage may hold implications for businesses associated with the state’s more than 143 professional employee organizations (PEOs), which function (ideally) to free up employer resources, expand opportunities, and improve both the quality and cost efficiency of benefits packages.
How might the legislation impact day to day North Carolina workers’ compensation claims? At this moment, it’s too early to predict. On the one hand, if the bill helps employers reduce costs and improve/expand benefits, obviously workers stand to gain. In addition, theoretically, the more that small and medium sized business owners outsource their administrative and other work relating to North Carolina workers’ compensation to PEOs, the more uniform the state’s standards will be; this uniformity, too, should benefit workers.
On the other hand, as with any piece of legislation, hidden problems may lurk. For instance, the expanded power of PEOs may disincentivize some employers from obtaining higher caliber private North Carolina workers’ compensation benefits packages. Also, if PEOs gain too much power, argue some, than they can make self-interested decisions that could have less than ideal downstream consequences for workers.
All that said, given the general enthusiasm for the bill — advocates for employers and advocates for workers who might need North Carolina workers’ compensation alike seem relatively pleased by the legislation — industry watchers seem cautiously optimistic that it could succeed in reducing costs, cutting red tape, and generally improving benefits.
Reuters, North Carolina Passes Professional Employer Organization Act, September 15, 2009
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