Written By:  Dino Miliotis, American Business Services, Inc

Is using a PEO a smart move for your moving company? This article provides a good introduction to PEOs and the advantages and disadvantages of using PEOs to hire workers.

Meeting your company’s human resource needs can be an overwhelming task. In addition to administrating your business’ payroll and benefits package, small business owners are also expected to remain current on the ever-changing complexities of payroll tax withholdings, workers’ compensation insurance, health insurance plans, and other benefits.

Some moving companies have opted to meet their human resource demands by enlisting the services of a PEO, or Professional Employer Organization. The primary reason PEO’s exist is to provide employee-related services for owners of small to medium businesses. This can be a valuable service for business owners, especially for the owners of small moving companies who struggle to find the time to adequately cover their companies’ human resource needs.

Instead of employing people directly, you and your employee become legal employees of the PEO. You retain all the functions an employer in terms of hiring employees, setting wages, etc. However the PEO handles everything else including payroll, benefits administration, workers’ compensation, health insurance, and retirement accounts. All you have to do is write lump sum checks to the PEO covering all your payroll expenses and an additional fee for the PEO itself.

PEO’s might be a smart move for your business. Then again, they might not. Here’s a quick rundown of the advantages of PEO’s so you can make an informed decision:

 Advantages

The advantages of PEO’s are somewhat obvious. You no longer have to deal with human resources issues directly. That means you can say goodbye to the days of maintaining payroll records, negotiating health insurance plans, and mediating workers’ compensation claims. This frees up time for you and your office staff to concentrate on growing your moving company – which is why you became a small business owner in the first place.

Another advantage of PEO’s is their size. Often, PEO’s are able to negotiate better deals for health insurance and other benefits because of the volume of business they offer.   This can be a huge cost savings for a moving company in the area of workers compensation premiums.  The PEO’S size also leads to economies of scale in human resource staffing. Your savings comes in the money you save by not having to staff human resources in-house.

To learn more about PEO’s, check with your general liability insurance agent or workers compensation insurance agent.  They often have a contact for a PEO in your area.  Otherwise check the internet for PEO’s.  Set up some interviews, do cost studies, and see if a PEO is the right choice for your moving company.

Paying Your employees under the Fair Labor Standards Act is an article written by Walter J Liszka, Esq and covers the laws regarding hourly employees and how to classify them into “exempt” and “non-exempt” categories (who the laws affect and who they don’t).  Since movers are usually hourly employees, they would be considered “non-exempt”.

The first area covered is when overtime is to be paid and what situations it can be traded for time off or comp time.  Then the subject of meal periods is covered and the 3 conditions that must be met if the meal time is not to be counted as worked hours.  Per the article this has been a confusing topic for employers like movers for years.

When and why an employee should be compensated for special preparation regarding work, like putting on special clothing is covered along with the determination on why an employee wouldn’t need to be compensated.   A large chunk of the article, however, covers “travel time” related to out of town and travel compensation on work related trips when an employees is required by the employer to spend time overnight for work.  Finally the topic of “on call” employees is covered including the different classifications and constraints puts on the employee in the on-call mode.

When it comes to the employer related law issues, Wessels Sherman Joerg Liszka Laverty Seneczko, PC is a law firm that has a vast library of articles to research.  Click here Fair Labor Standards Act (FLSA)-Paying Your Employees to read more on the above mentioned topic and search their site for other helpful information, whether you are a moving company, or another type of business, this information can come in handy.

Employee handbooks can often open a legal can of worms for employers. There are some tips, though, that can help the employer from making unnecessary promises.

Nancy Joerg, Esq of Wessels Sherman Joerg Liszka Laverty Seneczko, PC has written an article concerning employee handbooks and some of the do’s and don’ts associated with them.  Her perspective is that employees should keep the handbook “lean and mean” giving management the most flexibility in exercising its management prerogative.  Generally, employers are not legally required to cover most areas in a handbook except issues like th Family and Medical Leave Act. They can use their own discretion on the content of the manual. The article stresses that too much detail in an employee handbook can be constituted as promises that can come back later to bite the employer.  An example of an unnecessary promise is to promise that your company’s wages are competitive with others in the industry.  Another unnecessary promise is to promise to do everything possible to give notice of any changes in employee benefits.  Also, don’t have a detailed discipline policy.  Instead, give examples of unacceptable behavior that will lead to discipline, but then say the company will use it discretion to determine the severity of the discipline (up to and including termination).  The focus of a broader manual with fewer specific promises is what the article is trying to convey.  To read it in its entirety, go to Employee Handbooks: Delete unnecessary promises.

When a mover has a grossly deliquent storage customer how to remedy the situation is always complicated enough to make the mover ask:

“How Can I Get Rid Of A Storage Lot The Customer Isn’t Paying For?”

However, a warehousemen’s lien is a contractual lien. It is generally not possible to prove the existence of such a lien in the absence of a written storage contract. By the time a mover has to ask how to foreclose on its warehousemen’s lien, the relationship with the customer has broken down and it is no longer possible to obtain the customer’s signature on a storage contract.

Some common errors made by movers include:

(a) failure to obtain the customer’s signature on a storage contract;

(b) obtaining a signature from a third party (i.e. the relocation service which contactedthe mover or another warehouse) rather than from the customer. Unless it can be established that the third party had authority from the customer, the third party’s signature may not bind the customer; and

(c) obtaining a signature on the Bill of Lading, which governs storage in transit, but not obtaining a signature on a storage contract applicable after the period for SIT expires.

A mover should have a signed storage contract from the day the goods enter storage, separate and apart from the Bill of Lading, since it may not be practical to get a signature after the goods enter storage. Some customers simply refuse to sign, due either to confusion or the fact they have nothing to gain by signing a second document.

 When it comes to a mover’s liability in a damage claim situation, the customer often states:

“I Want Full Replacement Value For My Damaged Goods”

 The Bill of Lading is a contract between the mover and the customer which contains language limiting the mover’s liability in the event all or part of a shipment is lost or damaged.  The customer is asked to choose among several levels of liability protection which are available at corresponding rates.  The more liability the customer wants the mover to assume, the more the move is going to cost since such liability exposure is a cost of doing business.  To put it another way, the more protection a customer wants, the more he is going to have to pay for the move.

 Judges are typically unfamiliar with the contractual limitations on a mover=s liability which are found in the typical Bill of Lading, and may view such limitations with skepticism.  If a judge believes the customer was not aware of or did not understand the meaning of the language limiting the mover’s liability, he may refuse to enforce it.  Moreover, some judges will hold that such language limits a mover’s liability for breach of contract, but not for negligence.

 The most obvious way for a mover to protect itself it to insure that the customer has chosen a level of liability protection and signed to affirm his choice.  You might be surprised how many Bills of Lading have a signature at the bottom of the page but no signature in the section governing mover’s liability.  The uniform Bill of Lading contains a default provision for the mover’s liability in the absence of a signature.  However, a customer can argue, in the absence of a signature, that he was not aware there was a limitation on the mover’s liability. 

 One additional way to avoid such claims, and to defend them when they occur, is to have the customer sign another piece of paper which more clearly explains that:

 (a)        federal and state law allows a mover to limit its liability for loss and damage claims;

(b)        the customer agrees that the liability of the mover is limited as provided on the Bill of Lading regardless of whether the claim is for breach of contract or for negligence;

(c)        the customer understands the mover’s rates are based on the level of liability chosen by the customer, and a higher level of protection is available to the customer at higher rates; and

(d)       the customer has selected the level of liability protection he is willing to pay for.

 Remember: a mover’s ability to limit its liability is determined by federal and state law.  A mover cannot impose a limitation on its liability other than as set forth on the Uniform Bill of Lading or set forth in applicable regulations.  A mover cannot, for example, require that the customer waive all liability on the part of the mover.  In some states such as Illinois, a mover cannot offer replacement value protection to the customer.  However, a mover can document that the customer understands those provisions on the Bill of Lading which limits a mover’s liability, has freely chosen the level of liability protection he is willing to pay for, and agrees to be subject to such limitations.

It is worth remembering that most judges rarely deal with the regulations which govern the way a mover transacts business with its moving and storage customers. Like all lawyers, they learned about contracts and torts in law school. As judges, they deal with cases involving such claims on a daily basis. However, most judges will never have heard about federal or state moving regulations until the day you arrive in court. Under most circumstances, you will have a limited opportunity to explain moving regulations to the judge. Because of the press of other cases, the judge will have little if any time to research and learn about moving regulations. Instead, the judge will likely view your case from the more familiar perspective of contracts and torts.

Movers encounter this problem of “perspective” in a number of scenarios, including the following:

“The Moving Company Defrauded Me!

With increasing frequency, consumers are filing lawsuits alleging that the mover defrauded them by quoting one price before the move and charging a higher price on the day of the move. If a claim is made under the state’s Consumer Fraud statute, a successful plaintiff may be entitled to an award of attorney’s fees, in additional to actual and punitive damages. In other words, a $1,000 move may become a $15,000 liability exposure to the mover.

The best way to avoid such claims, and to defend them when they occur, is to carefully document the reason the price on the Bill of Lading was higher than the estimate. If the customer asked the mover do provide one set of services at the time of the estimate but on the day of the move asked the mover to provide additional services, the mover should have the customer sign a statement, prior to commencing the move, that:

(a) he has requested services which were not included in the estimate;

(b) he agrees to the higher amount shown on the Bill of Lading, which includes the additional services;

(c) he acknowledges the original estimate is now void; and

(d) the mover is willing to provide the services included in the original estimate at the quoted price, but that if the customer wants the mover do provide the additional services he will have to pay for them.

Common examples I have encountered are when: (a) the customer said at the time of the estimate he was going to do the packing, but on the day of the move says he wants the mover to do the packing; (b) the customer requests an estimate based on 4 rooms, but on the day of the move asks the mover to move a garage full of his mother’s goods which were not there on the day of the estimate; or (c) the mover gives an estimate based on a move from point A to point B,but on the day of the move the customer asks the mover to drop part of the shipment off at point C. In each instance, the cost of the move will increase, sometimes markedly, due to the additional services requested on move day. If you do not document that the customer changed the scope of requested services and has agreed to pay more than the original estimate, you may face a charge of fraud.