REDUCING THE RISK ASSOCIATED WITH PEO PAYROLL FRAUD: IDENTIFYING RED FLAGS, PROTECTING THE PEO, & WHAT TO DO IN CASE OF FRAUD

Alex Oprica Alex Oprica on March 31, 2022

This article presents excerpts from NAPEO’s 2019 paper, “Best Practices for Reducing the Risk Associated with PEO Payroll Fraud.” These days, it’s not unusual to read or hear stories in the news about fraud occurring within businesses. Many times, these businesses are victimized when an individual in a position of financial authority makes unauthorized withdrawals or disbursements from bank accounts or misdirects cash deposits. Generally, the response to these is to put controls in place to prevent and detect fraud relating to cash, but the possibility of payroll fraud is often overlooked. The PEO industry has a high risk for the potential of payroll fraud. We must be ever-vigilant about the various schemes that fraudsters put into play to cheat PEOs out of their hard-earned cash, including through automated clearing house (ACH) fraud, check fraud, and identity theft.

PRACTICAL CONSIDERATIONS: LICENSING & COMPLIANCE, STAFFING & OPS, ONGOING CLIENT SERVICE

Alex Oprica Alex Oprica on March 10, 2022

The success of any organization lies in its ability to adapt and grow profitably. Without being able to shift focus and direction, a company can lose its edge, then its market share. Ultimately, it will no longer be viable in the marketplace. Sears, Kmart, and Blockbuster will forever be remembered—not for their greatness for decades, but for their unwillingness to see the changes in the marketplace and adapt. 

MULTI-STATE LOGISTICS: EXPANDING THE EMPIRE

Alex Oprica Alex Oprica on March 10, 2022

Multi-state expansion for most PEOs can be planned or unplanned. This article will provide insight for small and middle market PEOs that are dealing with the operational aspects of multi-state expansion due to one-off employee hirings by clients in states where they are not currently licensed or registered.

SHIFTING FEDERAL REGULATION IN THE WORKPLACE

Alex Oprica Alex Oprica on December 15, 2021

As employers begin transitioning away from pandemic mode and toward management mode, they also are trying to navigate the changes to the legal landscape governing the workplace. The government has made this all the more difficult with its ever-shifting rules designed to both address the pandemic and reflect the changes in philosophy in transitioning from the Trump to the Biden administrations. Below are just a few of the recent changes that PEOs should be aware of to better service their clients.

RISK MANAGEMENT & INSURANCE ISSUES

Alex Oprica Alex Oprica on November 12, 2021

At the end of 2020, management consulting firm McKinsey & Company surveyed 899 C-suite executives about the impacts of the pandemic on business operations. One of their conclusions was that the pandemic had accelerated the adoption of digital processes by three to seven years, with B2B firms like those in the PEO space on the higher end of the spectrum.

MINIMIZING RISK FOR PEO INVESTORS

Alex Oprica Alex Oprica on November 12, 2021

Investors interested in the PEO industry commonly want an overview of the risks facing PEOs. While it is impossible to cover every material risk for every possible transaction in 1,000 words, we accept the challenge and will attempt to cover common risk themes as in-depth as possible.