A PEO is designed to help your business with things like human resources, employee benefits, payroll, and workers' compensation. A PEO can be a vital resource for small and mid-size businesses. You started your business to provide a service and generate income doing what you do best. Then you quickly discovered the headaches associated with being an employer. Payroll, business insurances, governmental compliance issues and paperwork drive you deeper behind the desk and away from income-producing activities.
What Does a PEO Do For a Company?
A PEO can help your business with the day-to-day tasks of managing aspects of your employee's administrative needs and can also help your business save money on employee benefits and workers' compensation.
A PEO Can Help Your Business:
Stay compliant with employment laws
Help your business recruit and retain employees
Free up time so staff can focus on tasks directly related to business goals
What Does PEO Stand For?
A PEO is a Professional Employer Organization, which can also be known as an employee leasing company. By outsourcing HR and administrative type functions to a PEO, businesses can save time and money which gives you the freedom to focus on work that really matters. PEOs provide online payroll services, submittal of your quarterly and year-end tax reports, W2s, wage garnishments and much more.
Can A PEO Benefit My Business?
There are many benefits of outsourcing HR and administrative type functions to a PEO, businesses can save time and money. For example, you can also see savings of up to 40% on workers' compensation insurance with little to no-money down on a pay-as-you-go plan with no audits. Plus, you'll gain access to employee benefits at reduced rates, such as group healthcare, dental, vision, disability and life insurance - even 401(k) savings plans.
How PEO Works
Today, we outsource everything from food delivery and transportation services, to someone who will walk our dogs. We value our time more than ever. This is the PEO concept.
When choosing a PEO, it is important to do the research and select a reputable provider with a good track record. If you are considering using a PEO, this is where we can help. Our team of experts works with you to gather information about your business needs and asks plenty of questions to find the best options for you. We’ve interviewed and vetted hundreds of PEO companies from across the country so you don’t have to!
How does human resource outsourcing benefit me?
From hiring to termination, professional human resources from professional employer organizations have become increasingly invaluable to employers in maximizing their return on investment. Communicating employee expectations, pay rates and reviews, even unemployment claims and immigration documentation, are just a few of the dozens of HR service benefits provided.
Why does the Professional Employer Organization concept work?
Simple: PEOs allow you to concentrate on work that affects your bottom line. The small business administration (SBA) estimates that employers spend up to 40% of their time dealing with non-income producing administrative tasks. Consider what you could accomplish if all of your time, energy and focus evolved around ways to create more profits instead of dealing with the headaches of payroll systems and HR management.
We have a unique payroll system, can the company adapt?
Employee leasing organizations work with business owners who employ from 1 to more than 1,000 employees in different industries, states and professions. Not every organization is equipped to handle unique payroll systems, but we can help you access those who do.
Who is responsible for the employees' wages and employment taxes?
The leasing provider assumes responsibility and liability for payment of wages and compliance with the rules and regulations governing the reporting and payment of federal and state taxes on wages paid to employees.
How are these services recognized at the state and Federal levels?
PEOs operate in all 50 states, and many states provide some form of specific licensing, registration or regulation. These states statutorily recognize these companies as the employer or co-employer of worksite employees for many purposes, including workers' compensation and state unemployment insurance taxes. The IRS has accepted the right of a PEO to withhold and remit federal income and unemployment taxes for worksite employees.
Who is responsible for state unemployment taxes?
The PEO assumes responsibility and liability for payment of state unemployment taxes, and most states recognize these service providers as the responsible entity. In those states that require the professional employer organization to report unemployment tax liability under its clients' account numbers, the PEO still manages this responsibility.
What are the differences between Employee Leasing and Professional Employer Organizations?
Although many still view these two staffing arrangements as the same - they are in fact quite different. The term "employee leasing" means different things to different people and has been, and continues to be, used in many diverse contexts. The confusion surrounding this terminology is one reason the National Association of Professional Employer Organizations (NAPEO) has been active in defining and distinguishing the concept; however, many commentators, regulators and statutes use the terms interchangeably.
Through the use of a PEO relationship, client companies make a long-term investment in their workers because in most cases, the leasing service provides access to health insurance, retirement savings plans and other critical employee benefits for their worksite employees. In the event a PEO relationship is terminated, the co-employees will cease to work for the leasing organization but will continue as employees of the client.
How many Americans are employed in a co-employment PEO arrangement?
It is estimated that 2-3 million Americans are currently co-employed in a PEO arrangement. PEOs are operating in every state, and the industry grows about 20-30% each year. Today, there are approximately 2,000 organizations, responsible for more $18 billion in annual employee wages.