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Ending employee ‘Lease’ agreement? Timing can save money

by on
in HR Management,Human Resources

If you have signed up with a “professional employer organization” as a way to outsource your HR headaches but are thinking of ending the relationship, consider this: If you end the contract midyear, you may be liable for additional payments into the state unemployment insurance fund.
    To avoid the double payments, consult with an attorney about how to best sever the agreement. If you end it at year’s end, you may save yourself from paying additional money into the fund.
    Recent case: RobsonWoese, a New York corporation, entered into a contract with TriNet Employer Group, under which TriNet took over all RobsonWoese’s HR functions, including paying into the unemployment fund.
    Midyear, RobsonWoese terminated the contract and rehired the employees. When the Commissioner of Labor demanded the company again pay its assessment, the company balked. But on appeal, the court rejected the claim of double payment, reasoning that the law was clear. TriNet and RobsonWoese each were liable for the payments even if that meant RobsonWoese paid twice: once through TriNet and again when it rehired the employees after the contract was terminated. (In the Matter of RobsonWoese and Commissioner of Labor, No. 501480, Supreme Court of New York, Appellate Division, 2007)

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