Term?

To Terminate or Inactivate... That is the Question

When a client is flying through financial turbulence, do you simply put your tray table up, make sure your seat back is in its full/upright position and tighten your seat belt, or do you land and wait for clearer weather?

Obviously, there are a host of things to contemplate when making this decision, these are simply a few key data points to consider when working through your decision tree.

            Inactive:

    • Still an Active CSA  
    • Potential for liability from a WC, EPL, GL, W/H, & Unemployment perspectives
      • Does your CSA spell out the PEO is only responsible up to Minimum Wage in the event of a Wage Claim?
      • WC Claims – potential to be saddled with a claim that isn’t yours – at a minimum you may need to pay to defend your declination or the carrier may consider it a nuisance claim; either way this will impact your Mod down the road
    • If not on PAYGO program, you may be paying unnecessary premiums
    • Potential for healthcare premiums leakage  
    • Certain states would still consider you the “joint employer” i.e.: CA

            Terminated:

    • Removes you from the liability line of sight (EPL, WC, GL, W/H)
    • Ability to access current operations / price accordingly
    • Allows you to be a considerate partner to your insurers

 

We are not going to take the easy route and perpetuate overuse of the term “unprecedented times”, because the fact is, it’s a question PEOs ask themselves during normal business operations on a daily/weekly/monthly basis.   The only difference is the scale regarding the number of decisions you need to make now. 

Regardless of the decision you make, staying in regular contact with your client is critical.  You can still be a resource and part of their support system without being their Co-Employing partner.  In addition, it puts you in a position to quickly / easily pick up your relationship when they are ready.           

If you would like to talk through your specific situation(s), we are just a phone call away.