5 ms·

I’m confused. What’s to stop these orgs from shuttling all their lower paid employees into a distinct staffing solutions LLC and just use them to “hire” staff f

I’m confused. What’s to stop these orgs from shuttling all their lower paid employees into a distinct staffing solutions LLC and just use them to “hire” staff for a parent company comprised of executives? Other fields do this regularly - hospitals often organize their physicians into a distinct staffing org, for instance. It’s entirely legal. So is this anything other than a feel good law that will push some minor corporate restructuring?

arthurcolle 6y ago
Big bank I used to work for did exactly this.
baskire 6y ago
They can also give those in the Llc worse benefits as it’s a separate entity. FYI, this is already a common practice.
gentleman11 6y ago
Is the legal system really so inflexible that it can’t prohibit this using general statements? Do you really need a 10 page long comma separated list of every possible situation?
- arthurcolle 6y ago
  > Is the legal system really so inflexible that it can’t prohibit this using general statements? Yes. > Do you really need a 10 page long comma separated list of every possible situation? Yes.
  - Supermancho 6y ago
    > Is the legal system really so inflexible that it can’t prohibit this using general statements? > Yes. That's not correct, although it doesn't seem like it to everyone because there is so much abuse. Intent matters. Lots of cases have been brought against abuses to circumvent existing laws, which have been successfully litigated.
sjg007 6y ago
Any hospital that does that for doctors is probably a bad one.. no way the doctors would sign on to a bad deal like that. Nurses however always get a raw deal.
rmrfstar 6y ago
The way GAAP tackles shams like that is "consolidation". [1] For example, you report wholly owned subsidiaries as if they are part of the parent organization. Clearly, accountants and lawyers can engage in fuckery as they did at Enron. But the law is fully capable of calling out a sham, even it it has recently become reluctant to do so. [1] https://www.pwc.com/us/en/cfodirect/publications/accounting-guides/consolidation-framework-equity-method-accounting-vie-guide.html https://www.pwc.com/us/en/cfodirect/publications/accounting-...
- part1of2 6y ago
  GAAP isn’t a law though . So how does this law capable of handling this scenario?
CWuestefeld 6y ago
Other fields do this regularly - hospitals often organize their physicians into a distinct staffing org, for instance. Hospitals do this in the opposite direction. If you're in the suburbs a metro area (where cost indexes are higher, so Medicare reimburses at a higher rate), you try to make your own expenses look higher to convince CMS to include your hospital into the same cost index as the metro area itself. One tool to do this is to separate out unskilled workers (housekeeping and the like) into a separate corporation, thus moving the average pay rate higher. Source: wife managed Medicare and Budget at a large hospital just outside of the NYC area, and did exactly this.

arthurcolle 6y ago

Big bank I used to work for did exactly this.

baskire 6y ago

They can also give those in the Llc worse benefits as it’s a separate entity. FYI, this is already a common practice.

gentleman11 6y ago

Is the legal system really so inflexible that it can’t prohibit this using general statements? Do you really need a 10 page long comma separated list of every possible situation?

arthurcolle 6y ago
> Is the legal system really so inflexible that it can’t prohibit this using general statements? Yes. > Do you really need a 10 page long comma separated list of every possible situation? Yes.
- Supermancho 6y ago
  > Is the legal system really so inflexible that it can’t prohibit this using general statements? > Yes. That's not correct, although it doesn't seem like it to everyone because there is so much abuse. Intent matters. Lots of cases have been brought against abuses to circumvent existing laws, which have been successfully litigated.

sjg007 6y ago

Any hospital that does that for doctors is probably a bad one.. no way the doctors would sign on to a bad deal like that. Nurses however always get a raw deal.

rmrfstar 6y ago

The way GAAP tackles shams like that is "consolidation". [1] For example, you report wholly owned subsidiaries as if they are part of the parent organization. Clearly, accountants and lawyers can engage in fuckery as they did at Enron. But the law is fully capable of calling out a sham, even it it has recently become reluctant to do so. [1] https://www.pwc.com/us/en/cfodirect/publications/accounting-guides/consolidation-framework-equity-method-accounting-vie-guide.html https://www.pwc.com/us/en/cfodirect/publications/accounting-...

part1of2 6y ago
GAAP isn’t a law though . So how does this law capable of handling this scenario?

CWuestefeld 6y ago

Other fields do this regularly - hospitals often organize their physicians into a distinct staffing org, for instance. Hospitals do this in the opposite direction. If you're in the suburbs a metro area (where cost indexes are higher, so Medicare reimburses at a higher rate), you try to make your own expenses look higher to convince CMS to include your hospital into the same cost index as the metro area itself. One tool to do this is to separate out unskilled workers (housekeeping and the like) into a separate corporation, thus moving the average pay rate higher. Source: wife managed Medicare and Budget at a large hospital just outside of the NYC area, and did exactly this.