THOUGHT LEADER 81 Many of the claims arising from the workplace are resolved on a localised level by administrative agencies and administrative law, such as state labour boards, tax boards and divisions of the Occupational Safety and Health Administration (OSHA). Similarly, the workers' compensation system is also governed at the state level, as each state has its own labour code, as well as statutes and regulations related to workers' compensation. In short, some of the states’ laws are more ‘employee-friendly’ and thus generally prone to a greater risk of liability to the employer (and PEO). Conversely, other states vary to fewer workplace regulations, more barriers or defences to claims, and limitations on the recovery exposure. These variations between states impact the cost and liability for PEOs in providing coverage and ultimately affect the premiums that the client companies pay as a result. What are the most common incidents that can result in a PEO being held liable for workers’ compensation? As a PEO’s liability is essentially a function of its client company’s liability for an injury claim, a PEO would not necessarily have any particularly different incidents of liability than ordinary. On a general basis, PEOs can be held liable for workers' compensation claims when workers sustain injuries performing their usual and customary job duties. This can include injuries resulting from accidents, falls, negligent equipment operation, or transportation-related incidences. Issues of causation and apportionment of liability are of course subject to adequacy. Therefore, it is crucial for PEOs and their clients to consult with legal and insurance professionals to fully understand their respective obligations and coverage. How much does a PEO’s liability vary from state to state? The liability of a PEO can indeed vary from state to state. There are certain federal laws that apply to all state as overarching measures in the workplace as a threshold minimum of employee rights; however, beyond that, each state varies in what protections it affords its employees. Whether it is disability laws, wage laws, or laws regarding discrimination and protected classes, there are endless variables for PEOs to navigate on stateby-state basis.
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