To our legal clients, our PEO partners, our HCM partners, and our followers via our Weekly Legal Brief, social media posts, and free website of forms, FAQ’s, etc. at www.myhrcounselcompliance.com – you no doubt have seen our warnings about the many non-legal “compliance” solutions in the market claiming that “claim” to provide employers with equivalent legal information and protection for HR/employment “compliance” issues.
I have heard from HR experts and C-level executives at conferences, on demos, and even in published articles, that these services are “better than nothing” or “good enough” Wrong! There are unlimited number of examples of why relying on information deemed to enhance your businesses “compliance” leads to more risk not less to your business. When you have the choice to receive “legal” advice, ondemand, for an unlimited basis from actual attorneys, there is no comparison for the protection for your business!
The practice of law – giving advice on specific facts that concern the law – comes with many critical protections, but two game changers are 1) the attorney client privilege, and 2) insurance protection for “malpractice”. Neither of these protections can be had with the “non-legal” solutions. Even errors and omissions insurance these companies carry does not cover legal advice, as they cannot get legal malpractice insurance without a legal license.
HR experts, and certified SHRM or HRCI experts in PEO’s and consulting firms are high trained and highly qualified, and this in no way is an article about their ability or claims to say lawyers are better than HR advisors, but instead to say, legal advice can only be given by lawyers in a law firm, and not by lawyers in a corporation or PEO. This is not opinion, this is how the national and state bar associations have written their rules, and thus how the state laws related to the practice of law work.
What Legal Advice is:
Advice from friends or family does not constitute legal advice. True legal advice forms an agreement between an attorney and his or her client based on a particular legal matter the client is experiencing.
In a nutshell, legal advice has the following characteristics:
• Requires legal knowledge, skill, education and judgment
• Applies specific law to a particular set of circumstances
• Affects someone's legal rights or responsibilities
• Creates rights and responsibilities in the advice-giver
Unlike legal information - such as information posted on a street sign - legal advice proposes a specific course of action a client should take. For instance, it's the difference between telling someone what to do (legal advice) as opposed to how to do it (legal information).
• Selecting, drafting, or completing legal documents or agreements that affect the legal rights of a person
• Representing a person before a court or other governing body
• Negotiating legal rights or responsibilities on behalf of a person
• Speculating an outcome
• Selecting or filling out specific forms on behalf of a client
Specific legal advice questions may include:
• Should I file for bankruptcy?
• Does my disability qualify for federal assistance?
• What kind of recovery can I receive for my accident?
So why does this matter to a PEO.
As mentioned, only lawyers can provide this information or prepare the documents above for an employers’ specific situation in order for the employer to be “protected”. Protection specifically means being able to seek recourse against the drafter or advisor of that legal information.
And as a PEO, you know that you can only protect your clients with Employers Practice Liability Insurance (EPLI). This insurance is beneficial in that it covers losses (that exceed a substantial deductible) in a lawsuit for claims specific to harassment, discrimination and wrongful termination, and sometimes wage and hour claims depending on the insurance company.
But EPLI insurance along does not cover the many other areas of employment law, and doesn’t provide a proactive and responsive outlet to actual attorneys for advice to your clients. Providing a legally drafted handbook, FMLA & ADA legal questions (which happen frequently), questions about background checks (what can be used, what waiver must be signed, what an employer has to provide if they find something in the check) – and the list goes on.
Of course, going to an hourly law firm costs thousands, so proactively bringing employers into legal compliance cannot be provided on a PEPM basis through a PEO – which is often why the “good enough” solution of “non-legal” solutions were accepted.
But now with myHRcounsel’s new model, PEO’s can add a few dollars PEPM to their clients and provide full, ondemand, unlimited legal advice on a flat PEPM fee basis!
Finally – just to drive the point home, why “good enough” really isn’t, here are real examples of the small print regarding the terms of the non-legal HR advisors below. As noted, each of them disclaim their advice or forms (and have to by law), and do not guarantee the accuracy. But they do advise you and your clients correctly to seek legal counsel before acting on the advice or forms. Here are just a few examples:
Well-known HR/Employer’s Association
Association provides content as a service to its readers and members. It does not offer legal advice, and cannot guarantee the accuracy or suitability of its content for a particular purpose.
HR services company (serves payroll service bureaus)
“Nothing in the Services, information provided in handbooks or guides, and any other comments, opinions, recommendations, answers, analysis, references, referrals, content or information, should be relied upon or construed as legal advice. Under no circumstance creates an attorney-client relationship."
HR advice and learning management systems company (services brokers and insurance)
“Company is not engaged in rendering legal, accounting, or other professional advice or service in any form or matter. The specific application of any law, regulation, or policy to any particular fact, situation, or problem occurring with any employer should always first be reviewed with legal counsel or other consultants who practice in these particular areas and are knowledgeable about applicable federal and state law and regulations and their interpretation. Although every effort has been made to ensure the accuracy and completeness of this information, Company cannot be responsible for any errors or omissions or the change in any courts or agencies’ interpretation or application of any laws or regulations described in these materials.”
Payroll Software and Services provider
Services Do Not Constitute Legal or Other Advice. CLIENT ACKNOWLEDGES AND AGREES THAT THE SERVICES PROVIDED HEREUNDER (INCLUDING, BUT NOT LIMITED TO, ANY AND ALL INFORMATION, MATERIALS, FORMS AND SERVICE CENTER ACCESS) ARE NOT INTENDED TO BE AND WILL NOT BE RELIED UPON BY CLIENT AS EITHER LEGAL, FINANCIAL, INSURANCE OR TAX ADVICE. TO THE EXTENT CLIENT REQUIRES ANY SUCH ADVICE, CLIENT REPRESENTS THAT IT WILL SEEK SUCH ADVICE FROM QUALIFIED LEGAL, FINANCIAL, INSURANCE, ACCOUNTING OR OTHER PROFESSIONALS. CLIENT SHOULD REVIEW APPLICABLE LAW IN ALL JURISDICTIONS WHERE CLIENT OPERATES AND HAS EMPLOYEES AND CONSULT EXPERIENCED COUNSEL FOR LEGAL ADVICE.