Why Do Contractors Use a PEO?
Contractors want to focus their time and energy on running their business- and not on the "business of employment". Most don’t have human resource training, payroll and accounting skills, knowledge of regulatory compliance, or backgrounds in risk management, insurance and employee benefit programs.
So without the skills associated with HR management, benefits, payroll and the associated software systems, these tasks are unmanageable. PEO companies handle these tasks easily with a team of payroll and HR experts.
Advantages of using a PEO include:
- Reduced rates on contractor workers' comp insurance, with no audits or deposits on a pay-as-you-go plan
- Accurate payroll services that give you more time. Free check stock, direct deposit, pay cards, tax deposits, quarterly and year-end reports, W-2s, wage garnishments and more
- Access to comprehensive employee benefit plans
- Human resources assistance to unload governmental compliance headaches, garnishments, claims and more
- Professional assistance with employment related problems
- Improved worksite safety
- Regulatory compliance and statutory protection
Advantages of Using a PEO for Contractor Workers' Compensation Insurance
For many contractors, workers' compensation insurance is one of the most expensive parts of running their business. That's where a PEO really helps contractors. These services can save employers up to 40% off their state rates. There are no down payments or fees, and never any year end audits. The PEO provides any certificates of insurance that are needed.
PEOs also improve your cash flow by eliminating down payments that are often required when purchasing work comp. Also, PEOs can provide workers' compensation insurance on a pay-as-you-go basis.
Employers with a high experience modification factor (E-mod) because of claims can achieve much lower rates with a PEO provider because the employer takes on the E-mod of the PEO.
Contractor PEO Services Cost
PEO companies that specialize in contractors either charge a fixed percentage of your total payroll, or a flat fee per employee. All professional employment organizations charge different rates. Your rate charged will also depend on the amount and type of administrative services needed.
Save Money by Using a PEO for Your Contracting Business
Working with an PEO will also save your contracting business money. Administrative costs when using a professional employer organization range between 2%-4% of your annual payroll. This amount is much less than the average 8%-15% (evaluated by the Small Business Administration) when managing similar tasks in-house.
How Does ELQ Help?
Get the knowledge, power and leverage of ELQ to access a contractor PEO service that can deliver these results to you. Call for quotes and to get your questions answered, or fill out our easy quote request form and we'll call you. It's an easy way to save thousands, we guarantee it.