The end of the year is here. We hope you were able to minimize any losses that might have occurred in 2010 and are putting together a sound strategy for 2011. By most predictions, next year should be a lot better for businesses than this year, as the economy continues on a slow but seemingly steady uptick. Let’s take a look at some of the facts and predictions that are in place, which should make doing business in 2011 less stressful than it was in 2010.
2011 Positive Outlook
- The WSJ Economist Survey predicts a 3% increase in GDP (sum of all goods and services produced within the United States) in 2011.
- The survey also indicates a reduced prediction that a double digit recession will occur to 15%; the number was at 22% in September.
- Economists polled in the survey also estimate Increases to be experienced especially by those businesses that operate in retail sales and manufacturing.
- 80% of CEO’s involved in the Business Roundtable predict sales increases in first half of 2011.
- 59% of CEO’s involved in the Business Roundtable expect to increase their spending on equipment (great for the manufacturing industry).
- A payroll tax cut pertinent to Social Security taxes will be granted to employees (employers will not experience a reduction in the amount that they match), which puts more disposable income in consumers’ hands, which should be immediately felt by the hospitality and retail industries
These predictions provide a basis for a lot of optimism for business people in 2011. The economy should be growing, which will present more opportunities and hopefully in the long run, more customers. To be fair there are some predictions for cost increases that will directly affect business owners.
Potential Cost Increases for 2011
- Materials- As the economy rebounds, basic supplies and resources are expected to become more costly. This could especially impact commodities, which include everything from oil to copper.
- Health care- While health care reform is still not set in stone, it would be unwise to not calculate a cost increase here.
- Labor- Hiring is expected to increase, so with it comes more salaries, payroll expenses, taxation matching, etc.
As you can see, economists and CEO’s alike seem to be predicting more good than bad on the horizon. While that is great news, 2011 will still require a steady hand and a carefully prepared plan for business owners. Two of the anticipated cost increases are pertinent to labor and health care. Both of those increases will directly affect your bottom line and will be financially measurable the first quarter that you start bringing on new people. There is no reason to be too pessimistic; after all bringing on additional staff means that you are growing and on your way to increased profits.
Taking a cautious approach to hiring will be the best way to grow while reigning in your company’s spending. Using temporary labor might be just the answer you are looking for. Think about the advantages of temps when you need to be cautious with spending.
- No money spent on recruiting-Save yourself from paying for job listings, paying to interview, and paying current staff to take time to perform both of those functions.
- Predetermined expenses- Temps come with a set fee and we take care of all of the extrinsic costs like payroll and taxation matching.
- Simple to terminate unnecessary employees- If your predictions are a bit optimistic and you decide that you don’t need that much staff, it is easy to reduce payroll costs by simply using fewer temps, as opposed to laying off a new hire.
We wish everyone the best in their financial endeavors in 2011. If you are looking for ways to save money and time while you grow, feel free to give us a call at 1-877-522-7797. We can tell you how to save on staffing throughout Arizona, from Phoenix to Flagstaff.
Every business is different, even those that compete in the same industry and go after the same customers. The nuances that exist make for a different set of processes and company culture. As each business is run differently, many managers think that their business is completely individual and that having practices that differ from standards will lead to success. While thinking outside of the box does make you an innovator, it does not mean that you must ignore standards that can and do work for many businesses.
When it comes to getting things done, you have many options. You can:
- staff your own employees
- outsource to an expert
- bring in temporary employees whom you can oversee to ensure quality, without requiring time to hande payroll or compliance issues
Many managers and business owners will use a combination of all three of these tactics in order to accomplish what they need to get done. Using a combination of methods can be a good way to get the job done while remaining cost effective and flexible. Achieving both of those traits will ensure that your business can please customers, continue to grow, and weather financial and situational storms.
Use Temporary Workers to Back up Skilled Staff
Temporary workers can be a valuable resource to any business. They are:
- Available immediately- Temps are a phone call away, so they can be dispatched almost as quickly as a problem in your business might arise.
- Cost effective- Temporary workers don’t require payroll expenses, benefits, or insurance costs, which means their total calculated cost can easily be less than that of a full-time worker.
It is understandable that every business would need a certain number of full-time employees who have knowledge of business processes, regular customers and the specific characteristics of the business as an entity. By all means, bring on full-time staff who can provide structure, especially for highly skilled positions. Do not discount the value of using temporary workers to staff your lesser skilled positions. Your skilled positions can be staffed by your full-time people, who are in turn supported by temporary workers. This way you have the peace of mind that full-time employees bring, along with the flexibility and financial benefits that temporary labor can easily provide.
Temporary staff will be supervised by your full-time employees. This way the standards and practices that make your business successful will never be eliminated. They have the skill sets to guide work flow and ensure that your final product is what you intend it to be. They can also maintain customer and supplier relationships, as they will have more time now that they are being supported by temps. You need a chef to source food and design a menu, but a temporary worker can set tables, wash dishes and even prepare food. The same works in an office environment where your full-time account managers meet with customers, while temps file paperwork, schedule meetings with your clients’ assistants, and organize and deliver mail or internal communications.
This marriage of full-time staff and temporary labor can make for a very well organized and well budgeted business. It is obviously appealing to businesses that compete in seasonal industries but can become a seamless part of any organizational structure.
Running or managing a business can be a very rewarding experience, especially if you are the type of person who thrives on change. Management can provide opportunities to showcase your flexibility and ability to think on your feet. While overcoming obstacles can be very rewarding, sometimes business presents us with opportunities that are double-edged swords. Yes, they might be an opportunity to grow and develop, but they might also be coupled with hurdles that must be bested in order to take advantage of the opportunity.
In many cases staffing is a hurdle that must be jumped. Think about what can happen to your staffing situation, literally overnight, if:
- You suddenly gain a large customer or an existing customer suddenly places a huge order
- You are presented with a time sensitive opportunity
- A large number of staff defect to a competitor simultaneously
In any and all of these cases a reliable staffing agency is your best means of fixing the situation. They will allow you to remedy your staffing problem in a very short amount of time, usually the amount of time it takes to make a phone call. Staffing agencies pre-screen candidates and have a list of capable employees who can work on short notice. This is their whole business model. If they could not sufficiently supply this service then they would not be in business; it is as simple as that.
What to Look For in a Staffing Agency
It is understandable that you might be a little apprehensive about bringing in temporary workers for certain assignments. If you ask around, colleagues who have used temporary labor to their advantage will likely be able to tell you about the benefits and assuage your fears about trusting a temporary agency. Be sure to ask them to recommend a company that has:
- A solid history in the staffing industry
- A variety of temporary workers that will allow you a little more flexibility in choosing your new staff members
- The ability to send staff over the very next day if needed. Even if this isn’t what you need, it shows that you are choosing a company that has superior customer service and is prepared to fill any overnight gaps that might arise in the future
- Will allow you trade out workers hassle free if you feel that a different temp might be a better fit for you
- Enough reach to help you at all of your geographic locations. If you have offices in Phoenix and Scottsdale, it is beneficial to select a temporary service that can help you in both cities.
Tips for Using a Staffing Agency
Now that you are comfortable using a temporary service to fill your emergency staffing needs, take a couple of tips that will help you to effectively work with a staffing agency and use their services.
- Know what you are looking for. The staffing agency will be far more likely to set you up with the right workers if you can be specific about what you need from the standpoint of workload to be accomplished and skill set necessary to do the work.
- Build a relationship early. Emergencies develop very quickly and it will be helpful to have a relationship with an agency that you like. Maybe start out by using an agency to cover a vacation or to send over a couple of temps to help you decide whether hiring on full-timers is worthwhile.
- Expand your relationship. Talk to your representative at your staffing agency about your current and prospective needs. They will be able to help you to determine what it will take to cover your temporary staffing needs and get a better idea of which temps will work out best for you.
We understand that as an employer you care about the safety of your workers. Workplaces can present employees with danger on a regular basis if they are not prepared and planning for safety. While some work places present more dangers to workers than others–the construction industry accounts for more job related fatalities, 22%, than any other industry–every workplace needs to think about safety.
The Occupational Health and Safety Administration oversees on-the-job safety on a national level. Locally the Industrial Commission of Arizona is the governing body that actually inspects our businesses and enforces national and local laws. Arizona is the only state with an independent group that performs inspections and enforces regulation. While their main offices are in Phoenix and Tucson, we all know that they have a presence throughout the entire state. They are responsible for evaluating workplaces. You may have been subject to an inspection in the past. They concentrate inspections on businesses that operate in industries that are traditionally and statistically considered to be more dangerous than others. Outside of those industries they target businesses that they feel have a high number of workers’ compensation claims. Their inspection will ensure that you are in compliance and will help you get on the right track if need be. (This link will lead you to printable versions of safety posters that you need to display in your business–we must all focus on compliance)
How Do I Increase On-the-Job Safety?
The best way to maintain a safe work place and limit employee accidents is to plan to be safe. There are many factors that you should consider. Begin by focusing on:
- Employee training and education- It is vital to make your employees aware of the dangers that may be present in their work place. Every industry is different; however everyone can benefit from training.
- Fully train staff who use heavy equipment or even lighter duty equipment that may be able to cause injury.
- Don’t just focus on new staff. Have follow-up safety training sessions at least annually to stress how important it is.
- Stress the importance of safety equipment–whether it is eye protection on a construction site or cut gloves in a kitchen–to every employee and make safety equipment readily available.
- Workplace design- The physical layout of your business can have a lot to do with safety. Organize your work environment so that it accommodates safety and accommodates back-up plans in the event of an accident. OSHA mandates that any general industry employer incorporate:
- Hazard communication standards that inform employees of chemicals in the workplace. If you have dangerous chemicals around, you are required to have a written Hazard Communication program, among other compliance necessities.
- An emergency action plan that tells your employees what specific actions they must take in the event of a fire or other accident or emergency. You will communicate this to your staff during training sessions.
- A plan for exit routes. Decide upon the safest way for employees to file out of the building. Post the plan in writing and communicate it verbally.
- Safe walking/working surfaces. Slips and falls account for more on-the-job injuries than any other type of accident. Use non-slippery surfaces to cover floors and keep them clean, dry and clear of clutter that might cause a fall.
- Medical and first aid supplies and planning are a must. The extent of the supplies you must have on hand depends upon your specific industry, but everyone needs a general first aid kit and easy access to a telephone to alert emergency services. It might also be helpful to officially assign one or several employees the responsibility of contacting emergency services and helping injured staff until they arrive.
Hopefully you are accident free. Nothing bothers an employer more than knowing that their staff has been injured on the job. If you would like to bring on some staff who have already completed some general safety training, visit us online and find out more about what we can offer.
If you took a random poll on the street, many people would probably tell you that working in the hospitality industry is easy. They might think that the responsibility is low and that the tasks that must be completed are relatively simple. As a result of this, many people wrongly believe that all you need to staff the hospitality industry is a group of warm bodies. In practice, this could not be further from the truth. Quality hospitality employees have some characteristics that allow them to perform their jobs well. The truth is, not everyone is cut out for the hospitality industry, whether they are full time or temporary employees.
So what should a hiring manager be looking for? How do you identify good hospitality employees in an interview when candidates are putting their best foot forward?
- Communication-This is one of the first things that you should be on the lookout for. Many hospitality employees deal directly with your guests; without the ability to communicate effectively your guests will not receive proper customer service–crucial in this industry–and will likely be unhappy. Even back of house and support staff must be able to communicate well. Although they might not constantly deal with customers, they might at some point, not to mention that the hospitality industry is fast paced. Whether cooks need to get food prepared for a catered party of 100 or your maids need to turn over twelve rooms for waiting guests, an inability to communicate will surely lead to disaster.
- Look For: eye contact, well formed answers to interview questions and alert body language
- Multi-Tasking- Every position in the hospitality industry must be able to do several things simultaneously. This is where those unfamiliar with the industry seem to get confused. Although the tasks might be relatively simple, the ability to work on several things at once and get everything done correctly is a must. Servers must pay attention to multiple guests at the same time; hotel clerks must greet and answer telephones. Without multi-tasking, the job simply does not get done.
- Look For: examples from their past work that indicate an ability to multi-task; try asking two- or three-pronged questions that relate to slightly different topics.
- Attitude- Different personalities tend to excel at different jobs. While a higher strung, aggressive personality might perform exceptionally on the floor of the New York Stock Exchange, those traits will quickly become a problem in the hospitality industry. You need staff who are able to remain calm and deal with customers and potential problems in a straightforward yet relaxed manner. Without the right personality, your employees will not do well with your guests.
- Look For: a candidate who smiles, answers to questions that hint at optimism
- Flexibility- This is another crucial trait for quality hospitality workers. For a temporary agency, it is an absolute must, as our temps will be changing assignments frequently. In the hospitality industry in general, an employee must be open and adaptable to changes. While doing business, things can happen quickly and employees must be able to react to the changes in order to best serve customers. Without flexibility even the most confident and intelligent people will not be effective workers in the hospitality industry at any level.
- Look For: open-minded candidates who can explain to you why flexibility is important
Quality hospitality employees often make the difference between success and failure in the industry. If a business traveler gets superior service at a hotel while meeting with clients in Phoenix, he is likely to remember that and book a room at the same hotel next time he’s in town. He might even tell co-workers about that chain when gets back home to Scottsdale. Realistically your customers don’t know whether they received that great service from a temporary worker or a permanent staffer; they just remember that they would spend money with you again.
It’s that time of year again: the holidays are officially upon us. With the holidays comes a rush of requests for vacation time. It seems like a large portion of your staff wants to take time off, and coincidentally they all need roughly the same days. Along with the requests come stories of already purchase airplane tickets and spending time with aging family.
This time of year can be very difficult for a manager. You have to remember that your staff is comprised of people with personal lives and plans, but at the same time you need them to understand that business does not stop just because it is the holidays. Lost productivity now can easily lead to lost clients or customers after the New Year is officially rung in and everyone is ready to come back to work. Some estimates put the losses associated with planned absences such as holidays at 26.6% of base payroll. If you do not grant requests, you are likely to harm morale and in some cases even lose employees. If you do grant the requests, then the business itself might suffer. Finding balance can be very difficult.
There is a compromise available that will help your employees get most of their time off, while making sure that your business is staffed around the holidays. You can easily cover employee vacation time using temporary staff. You will need to make an internal plan that ensures that you have someone in every department at all times. Then you can fill in the gaps with temporary staff. Think about all of the functions that a temporary worker can cover for you:
- Answering phones and communicating with your customers
- Handling mail and ingoing/outgoing packages
- Data entry
Those functions are aimed at managers who work in an office environment. The hospitality industry also experiences the same problem. In their case, however, the holidays generally mean an increase in sales. While you will want to keep as many key people on as you can, some will need time off. You can replace these employees in their absence with temps as well. Clerks, food servers and even cooks can all take time off to spend with friends and have their shifts covered by temporary workers. Hotels, parking services, caterers, you name it–temporary staff can be a great solution to employee absence around the holidays.
In any industry additional staff might be needed to compensate for members of management to be away. While it is difficult to lose a manager for a vacation, we all know that they need and deserve it from time to time. One strategy to help make sure that everything is covered when a manager is absent is to increase the amount of staff that you have on hand that work directly on operations and not management. A call to a reliable temporary agency is the easiest way to make bring in temporary labor that is prepared to work right away. You will not have issues with the temps showing up, because they all are asking for work, regardless of the time of year.
One of the most flexible options that any staffing agency can ever offer their clients is the option to try out an employee on a temporary basis and then decide whether or not they would like to hire the employee on full time. This is a great option for both the employer and the employee, as it fuses the best aspects of both temporary employees and direct hire services.
There are many reasons that an employer benefits from finding new staff in this manner. Let’s begin with the benefits that are borrowed from temporary staffing and direct placement as separate entities.
- Save money up front by not having to fund the hiring process or costs associated with payroll and benefits.
- Save time by locating a capable employee with a phone call as opposed to the interview process.
- You can immediately replace an employee who leaves unexpectedly.
- You can retain peace of mind knowing that your new staff member is coming from a trusted source.
While those advantages exist for temporary staff and direct placement, temp-to-hire offers its own advantages due to its flexibility.
- You can make sure that your company really needs a new staff member. We have all been there: we identify a gap in our operations and automatically assume that we need a new hire to fill it. Sometimes we regret the new hire because we realize that if we changed some internal processes or simply outsourced something, we could have bridged the gap more effectively and at a lower cost.
- You can make sure that the new hire meshes from a company culture and personality standpoint. It might take a while to truly gauge new person’s personality and work ethic. The temporary aspect of temp-to-hire gives you this trial period.
- We handle your probationary period for you. Temp-to-hire employees come in knowing that the job might not last. In spite of probationary periods, regular hires do not usually take this into consideration. This can make termination considerably more difficult and uncomfortable for the employer.
- You have the ability to easily replace the employee in the event that you decide that you do in fact want another staff member, but feel that the original employee that you located might not work out. It just takes a hassle-free phone call to replace the temp with someone who is a better fit for your needs, which may change slightly after the original employee comes on.
While temp-to-hire is a great option, it may not be for everyone. Some employers know for certain that they need a permanent staff member, while others know in advance that their staffing issue is a temporary situation. If your situation does dictate that you need flexibility you will likely be very happy with the temp-to-hire option. We arrange everything so that you only have to focus on your bottom line.
There are many benefits of using a staffing agency. While some people feel that only well-established companies or firms that operate in particular industries have enough “extra resources” to properly use temporary labor or direct placement services, this is simply untrue. In all reality, a staffing company itself is an “extra resource,” especially for a smaller business that is growing.
When your business grows, owners and managers find themselves with a lot more on their plates, often in a short amount of time. Partnering with a staffing agency can take some of those responsibilities off of your plate and give you more time and money to focus on the factors that will really drive and organize your company’s growth.
Think about what a staffing company can do for you
- Save Time- As you are growing, you will need to devote time to welcoming new clients while making sure that your existing ones are still serviced. This means you might not have time to go through the hiring process. Staffing agencies go through the hiring process as part of their business model, so why not save the time and call in reinforcements that can be there on short notice?
- Save Money- Hiring staff costs money. Once you calculate in your (or your hiring manager’s) time, along with the money involved in listing job ads and increased insurance and payroll costs once you find your staff, you likely have a large figure. Some HR managers have estimated that the figure can be as high as $2,000.00. It doesn’t take much math to realize that a phone call to a trusted staffing partner costs less.
- Put You at Ease- Staffing companies evaluate and hire every single day. They know how to spot good candidates and determine whether an applicant would be good fit for the positions you need filled. When you hire someone, you never know how the person will work out. A staffing company can send employees who have proven their value by working for previous clients of the staffing agency and already shown that they can work out. You also have the ability to try out a temporary worker, so if you choose to let them go, it is an easier process than firing an internal hire. You can also replace them with a phone call, so that you always have the level of staff that you need on hand.
- Give you Flexibility- Perhaps this should have been first on the list for benefits to a growing company. As you grow, you do not need to be hampered by anything, especially the staff that is helping you expand. Staffing agencies make growing and downsizing your staff easy. You do not have to worry about difficult terminations as temporary workers know from the start that they are not permanent. If you originally want temps, but later decide you want to keep them full time, a staffing agency allows your business to be nimble.
As your business expands, you have a lot of things to worry about. Staffing should be an important thing but not a costly and time consuming one. The economy is gradually starting to improve, not just in Phoenix or Flagstaff, but all over the country. Think about the solutions that temporary labor can provide for your growing company.
Running a business requires a dedication to the industry and the ability to compete within it. Once a business begins to grow, it starts to require more attention to details outside the core competency or function of the business. One of the things that has become an issue is human resources. While your staff literally is a group of human resources, most business owners know far more about what their business does, than about what a hiring process is or how to make sure that they are in compliance with regulations as they pertain to employing people.
For many business owners and managers, the requirements that human resource management places on them tend to add unneeded stress and take time away from their core functions. If they choose to hire employees to handle HR matters, then they must foot the bill for additional payroll, benefits, and sometimes even space to accommodate those employees.
One way to avoid this stress or the necessity of hiring a large HR department is to outsource some of the HR functions to a staffing agency. It makes sense if you think about it. A staffing agency exists to perform HR functions. They hire, stay on top of insurance and regulation and perform other HR functions, not as a required part of their business but as the business itself. They have the dedication to the staffing industry that many people in other businesses do not. This dedication allows them to perform most HR functions better than individual Human Resources departments.
Take the hiring process for instance. Individual HR managers take time to list jobs, audit resumes and applications, and bring people in for interviews. Hiring is an occasional part of their job, whereas it is a huge part of a staffing company’s job. They have more time to focus on coming up with the best interview questions and have more experience actually interviewing people, which often makes them better judges of candidates. Hiring is their business so it doesn’t have to be yours.
The biggest issue that HR departments have to deal with is compliance. To have employees in Arizona an HR manager must consider:
- Keeping payroll and related expenses within budget
- Workers’ compensation, the laws associated with it and making sure that their company has the right coverage at the best price
- Occupational safety and health standards that dictate what a workplace must have and how it must operate (although you’ll need at least passing knowledge of this regardless of how you source your staff)
- Youth employment laws
- The vast and specific employment laws
Not only do these issues take a sound knowledge base, but they also take time and money. If you choose to let someone else handle these issues for you, it can really help out. Staffing agencies that can provide you with temporary or even permanent staff have their operations set up around these issues. They can focus on them and streamline processes like hiring or constantly keeping up with changes in employment law. The ability to streamline means they can usually address these issues at less cost than businesses that focus on other things.
Less cost for them often means their customers save money when they use their employees. The can also buy larger insurance policies which can sometimes bring their costs down as well–yet another way they can afford to provide you with employees at reasonable prices. There is nothing wrong with not being able to outperform a well-run staffing agency; after all it is what they do.
Especially right now, as the economy seems it might be taking a slight upturn, why not save time and possibly even money by using a staffing agency? You can go about your business while they send over workers who have already passed a screening process. Using temporary labor is a great option because it allows you to see if your recent successes will last and allow you to bring on full-time staff. If you bypass temps and hire people on full time you might have to fire them in a few months. If they have worked for you long enough they may even qualify for unemployment benefits which can cost you in raised premiums.
Yet another example of the finer points of human resource management getting in the way of running your business. HR functions must be addressed, just not necessarily by you.
One of the finer points of being an employer is workers’ compensation. According to Arizona State law, any business that has employees is legally required to carry workers’ compensation insurance. It does not matter what kind of business you are registered as, be it a corporation, LLC or proprietorship; if you employ people, you must carry coverage.
Managing workers’ compensation can be time consuming and expensive. While it is a part of doing business and a safety net that makes employees more comfortable, the fact is it would be easier to have someone else handle it for you. Let’s go over your options for carrying workers’ compensation insurance in Arizona.
- A State Licensed Provider- Arguably the easiest way to approach workers’ compensation insurance (aside from having us handle the detail for you of course) is to purchase a plan through an approved provider. Many companies are licensed to provide this coverage to business owners in Arizona. If you would like to find out more about individual companies who are licensed, contact the Arizona Department of Insurance. These companies will price out a plan for your business based upon several factors including:
- Your total number of employees
- How risky they asses your industry to be
- How your business stacks up against competitors in your industry from a risk standpoint ( this is called Experience Modification or E-Mod)
- Do it Yourself- If you are the detail-oriented type, and can show the state that you are capable, you can apply to provide your own workers’ compensation coverage in Arizona. Aside from the obvious extra work that this route requires, you must also give your employees the legal right to reject your coverage.
Now that you have spent the time to set up workers’ compensation–and consequently spent less time on your core business functions–you will need to think about the future. Your insurance will be responsible for paying out almost every time an employee is injured or falls ill due to a work-related cause. Arizona is a “no fault state,” meaning that even if the injury or sickness is directly caused by the employee, your insurance will pay out so long as the employee didn’t intentionally injure himself. In the event of an injury, you can expect to devote more time to workers’ compensation. If a staff member is injured on the job:
- You must provide them information about your insurance carrier and then contact your carrier to notify them.
- You can refer them to your preferred medical provider for an initial check-up, but after that employees have the right to seek medical care from their preferred providers.
- You can expect to have your premium increase as your insurance coverage will likely be paying for both medical care and up to 2/3 of your employees’ wages for any time that they are not available to work due to the injury.
- Be sure to keep in touch with the employees’ medical care providers so you know the extent of their injuries, how long they should be out if work, and what to expect your insurance provider to report back to you.
- Keep up with injured employees to make sure that they are being diligent in focusing on treatment and healing; if they are not, you will end up paying for a lot more medical bills.
Keep in mind that you will need to stay on top of workers’ compensation coverage. Aside from taking the time to cut a check every month, you should be actively in contact with your insurance provider. Remember, if you choose to incur the cost, it is your responsibility to manage it and keep it reasonable.
- Make sure that your provider is updated if you have any changes to your business, whether that be to the number of staff or the types of operations you are involved in due to expansion or discontinuing particular operations.
- Make sure your provider closes claims on time so that you do not have extra costs on your books.
If you choose to have employees, you will want to stay on top of workers’ compensation. If you are found to be out of compliance by the state you can expect:
- Fines for not having coverage: The fines start at $1,000 and go up to $10,000 in a 5 year period if you do not comply.
- To have your business shut down by the Industrial Commission of Arizona (the government entity that oversees workers’ compensation) until you are in compliance.
- To be sued by an injured or under-informed employee. If you do not have coverage, or fail to inform an employee about their rights involved in self coverage, you can expect to be hit with a civil lawsuit. If you lose the suit you might have to pay medical costs, lost wages, legal fees (yours and the employees), pain and suffering or any other costs that the courts deem necessary. Remember it is a class 6 felony to not carry workers’ compensation insurance in Arizona.