Tag Archives | professional employer organization

Co-employment in a PEO Arrangement

See Also:
Defining a Professional Employer Organization (PEO)
Advantages if Professional Employer Organizations for the Business Owner
How to select a PEO
PEO Compared to Outsourcing Payroll
Professional Employer Organization FAQs

Co-employment in a PEO Agreement?

Legally, referred to as a “Joint Employerrelationship, co-employment is often used to describe the relationship among two or more employers when each has specific actual or potential legal responsibilities to the same worker or group of workers.

Professional Employer Organization (PEO)

The PEO relationship involves a contractual allocation and sharing of employer responsibilities between the PEO and the Business Owner. Call this shared employment relationship “co-employment”.

As provided by the Texas Staff Leasing Services Act, the Business Owner and the Professional Employer Organization (PEO) become “co-employers”. The Business Owner, the “work site employer”, retains workplace management and supervisory control of the “co-employees” and the Professional Employer Organization (PEO), the “employer of record”, becomes the ‘Off-Site” Payroll, Human Resources and Safety / Risk Management Groups for the “co-employees”.

Guided by the Texas Staff Leasing Services Act, the PEO assumes the responsibilities for Payroll and Human Resources Administration, Safety and Risk Management, Workers’ Compensation.

Evaluation Roles

When evaluating the employer’s role of either the PEO or the Business Owner, examine the facts and circumstances of each employer obligation separately, because neither party alone is responsible for performing all of the obligations of employment. Each party will be solely responsible for certain obligations of employment, while both parties will share responsibility for other obligations. When the facts and circumstances of a PEO arrangement are examined appropriately, both the PEO and the Business Owner will be found to be an employer for some purposes, but neither party will be found to be “the” employer for all purposes.

Both the PEO and the Business Owner establish a common law employment relationship with the “co- employees”. The PEO assist/advises/consults the Business Owner and “co-employees” in matters involving Human Resource Management and Compliance with Employment Laws.

The Business Owner directs and controls the “co- employees” in the responsibilities of acceptable Performance and Customer Service Standards.

Additionally, the Business Owner provides the “co-employees” with the tools, instruments, and place of work. The PEO can assist in ensuring that the “co-employees” are provided with a worksite that is safe, conducive to productivity and operated in compliance with employment laws and regulations. Additionally, the PEO provides the “co-employees” with workers’ compensation insurance, unemployment insurance and a broad range of employee benefits programs.

Determine which candidates are the right fit for your company using our 5 Guiding Principles For Recruiting a Star-Quality Team.

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Professional Employer Organization (PEO)

See Also:
Advantages of Professional Employer Organizations
How to Select a PEO
PEO Compared to Outsourcing Payroll
Professional Employer Organization FAQ’s
Service Department Costs

Professional Employer Organization | PEO Definition

The Professional Employer Organization or PEO definition is a vendor that assumes, via contract, a significant portion of the employer’s responsibilities and associated risk for either all or a portion of the Business Owner’s workforce.

Many mistakenly view he PEO Arrangement and Employee Leasing as one in the same. But there is actually quite a difference. The original employee leasing model transferred certain responsibilities from a client company to the employee leasing company. Thus, it created the original concept of “fire, hire, and lease back”, which does not occur in the PEO arrangement.

The PEO brings services to the Business Owner, including the management of Payroll and Payroll Taxes, Employee Benefits, Human Resources, and a Safety / Risk Plan. If a PEO relationship is terminated, the “co-employees” will cease to work for the PEO but will continue as employees of the “Work Site Employer”. By comparison, a leasing or staffing service supplies new workers on a temporary or project-specific basis. These leased employees return to the staffing service for reassignment after completion of their work with the client company. Define employee leasing as a supplemental, temporary employment arrangement where one or more workers are assigned to a customer for a fixed period of time.

Some state statutes governing PEOs still use the leasing terminology.

Evolution of the PEO Industry

The growth of the PEO industry gained momentum about 25 years ago when provisions in tax and pension laws made employee leasing very attractive to the owners of small and medium sized businesses. Subsequently changes in federal legislation basically eliminated those loophole provisions.

A second growth spurt in the mid-1980s was based on economies of scale in buying workers’ compensation and health insurance. They expanded coverage to larger numbers of employees. In addition, lessee companies reduced their costs through the bulk purchasing process. This phase eventually fell prey to imprudent risk management practices on the part of a number of staff leasing companies. It led to the failure of several of the companies and blemished the entire industry.

The current growth surge began in the early 1990s. Characterized by increased professionalism and less risky business practices, the industry has also seen increased regulation by the federal and state governments. PEOs now use the economies of scale in Payroll Processing, Employee Benefits, Human Resources Management, and Safety and Risk Management. An additionally advantage is the assumption by the PEO of administrative functions that have become increasingly complex because of employment regulations. PEOs offer a compelling business option for Business Owners.

Determine which candidates are the right fit for your company using our 5 Guiding Principles For Recruiting a Star-Quality Team.

professional employer organization (peo)

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Professional Employer Organization (PEO) FAQs

See Also;
What is a PEO?
Advantages of Professional Employer Organizations
How to Select a PEO
PEO Compared to Outsourcing Payroll
National Association of Professional Employer Organizations

Professional Employer Organization FAQs | PEO FAQs

Refer to the following Professional Employer Organization FAQs for more information about PEOs.

What Kind of a Business Uses a Professional Employer Organization (PEO)?

The PEO business arrangement will literally work for any type of business including both For-Profit and Not-for-Profit entities. Co-employment relationships range from professional offices to high technology to retailing to manufacturing. In terms of size, PEO customers include the two person professional office, as well as, the one to three hundred person manufacturing firm.

How will a PEO arrangement affect My Employees?

Your Employees maintain their eligibility for benefits, pay rate and job seniority that they have accumulated and in many cases find that they have access to better benefits through the PEO business arrangement.

How will a PEO arrangement affect control of My Employees?

Your Employees are under Your Direct Control and Supervision. The Business Owner determines wage rates, working hours, job responsibilities, job performance, compliance with rules and regulations, etc.

How will the change from my current system to a PEO arrangement take place?

The PEO will conduct an orientation for all of your Employees. This is the time to answer questions and explain the benefits of the Business Owner/PEO Management Model. Furthermore, employees always feel more comfortable when they know the who, what, when, where and why of the change.

Are PEOs recognized as employers at the state and federal levels?

Yes, PEOs operate in all 50 states. The State of Texas has legislated specific licensing, registration, and regulation for PEOs. Texas statutorily recognizes PEOs as the employer or “co-employer” of employees for many purposes, including workers’ compensation and state unemployment insurance taxes. In addition, the IRS has accepted the right of a PEO to withhold and remit federal income and unemployment taxes for employees. The IRS has also promulgated specific guidance confirming the authority of PEOs to provide retirement plans to workers.

How will a PEO arrangement help the Business Owner to control costs?

The PEO provides significant technology, service infrastructure and platforms to assure compliant delivery of contracted services. In addition, the PEO provides time-savings by handling routine and redundant tasks associated with the following:

Who is responsible for the payment of wages and employment taxes?

By contract, the PEO 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 its “co-employees”. PEOs have long established their role as reporting income and handling withholding, FICA, FUTA and SUTA. In 2002, the IRS issued guidance confirming the ability of PEOs to offer qualified retirement benefits.

Who is responsible for employment law and regulatory compliance?

As co-employers, both the Business Owner and the PEO have compliance obligations. The Customer Service Agreement (CSA) addresses specific co-employer responsibilities regarding employment laws and regulations, including the following:

  • Federal, state, and local discrimination laws
  • Title VII of the 1964 Civil Rights Act
  • Age Discrimination in Employment Act
  • ADA
  • FMLA
  • HIPAA
  • Equal Pay Act
  • COBRA

Is a PEO required to have in-force Current Workers’ Compensation Insurance?

The “Staff Leasing Services Act” does not require a Professional Employer Organization to maintain current Workers’ Compensation Insurance for its’ “co-employees”; however, private employers that contract with governmental entities are required to provide Workers’ Compensation coverage for each employee working on a public project.

If you want to determine which candidates are the right fit for your company, then use our 5 Guiding Principles For Recruiting a Star-Quality Team.

Professional Employer Organization FAQs, PEO FAQs

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Professional Employer Organization FAQs, PEO FAQs

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How to Select a PEO

See also:
Defining a Professional Employer Organization
Advantages of PEO Services for the Business Owner
PEO Compared to Outsourcing Payroll
Professional Employer Organization (PEO) FAQ’s
Service Department Costs

How to Select a PEO

Creating a successful partnership with a Professional Employer Organization (PEO), for the co-employment of your employees, requires that the Business Owner apply the same standards used when selecting a CPA, an Agent of Record, an Attorney or any other trusted partner/advisor/consultant. Now, let’s look how to select a PEO.

First, assess your business to determine your Payroll, Employee Benefits, Human Resources and Safety and Risk Management needs. Then, decide whether to build internal capacity or execute a Customer Service Agreement (CSA) with a Texas Licensed PEO for that capacity. After, confirm that the PEO Vendor is Licensed to conduct business in the State of Texas. Contact the Texas Department of Licensing and Regulation to confirm licensing. Reach them either by calling 800.803.9202 or visiting (www.license.state.tx.us). When you visit the website, (right side of page) CLICK on “Search Licensees by License Type”. Then CLICK “Inquire by License Type”. Then SELECT “Staff Leasing Services.” After that, SELECT “Inquire by Name”. Finally, type in the Company Name, and then CLICK “Search”.


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Select a Certified PEO Vendor

Confirm that the PEO Vendor is certified through the Employer Service Assurance Corporation (ESAC). In addition, they provide independent professional verification that a PEO has met the highest ethical, financial and operational industry standards through comprehensive certification and ongoing monitoring. For more information, visit www.esacorp.org then CLICK on “Verify” then type in “PEO Name” then type in “City” then SELECT “State” then CLICK “Submit”.

Verify that the PEO Vendor is certified through the Certification Institute. It provides an independent professional verification that a PEO’s risk management program is meeting proven insurance industry risk management best practices to control WC insurance losses. Certification provides WC insurance companies with ongoing assurance that a PEO is in fact implementing industry best practices in a consistent and effective manner. Visit (www.certificationinstitute.org) then “CLICK Go Workers’ Compensation Risk Management Certification” then CLICK (Top Tab) Certified Companies” then type in “PEO Name” then type in “City” then SELECT “State” then CLICK “Search”.

Verify Your PEO Vendor

First, verify the length of time that the PEO Vendor has been in business.

Then, verify that the PEO Vendor possess the Financial Strength to deliver the contracted services and meet the financial requirements. (Ask for a Copy the PEO’s Dun and Bradstreet Financial Rating). (Note: An ESAC Certified PEO is Audited Annually and is Financially Assured with a $1,000,000 Surety Bond plus an Excess Surety Bond of $5,000,000 for Key Services.)

When you have verified the above, verify that the PEO Vendor possess the Workers’ Compensation and General Liability Insurances (Copies of Certificate of Insurances) necessary fulfill the contractual obligations associated with a PEO Arrangement.

Verify how the PEO Vendor’s Employee Benefits Plan is tailored. Is the Employee Benefits Plan an all or nothing proposition? Or after a cost/benefit comparison has been completed? If the current plan is more cost effective to remain in force, then will the PEO accommodate such an arrangement? Will the Employee Benefits Plan fit the needs of Your employees?

Verify how the PEO Vendor funds Employee Benefits. Is the PEO fully-insured, self-funded, or partially self-funded? (Note: In the State of Texas it is unlawful for a PEO to self-fund or partially self-fund a Medical Health Plan) Who is the third-party administrator (TPA) or carrier? Finally, is their TPA or carrier authorized to do business in the State of Texas?

Then, verify how the PEO Vendor will Collect Premiums for Employee Benefits. Do they collect the premiums weekly (as-you-go) or monthly (in advance)?

Review PEO Customer Service Agreement

Review the PEO Customer Service Agreement (CSA) carefully. Construct the CSA to comply with the requirements of the Texas Staff Leasing Services Act. It is a “Service Agreement” titled “… / Client Leasing Agreement (Texas Employees). Are the respective parties’ responsibilities and liabilities clearly stated? What guarantees are provided? Also, what is the Contract Period and Extension(s)? What provision(s) permit cancellation or termination of the CSA?

Request a Personal Presentation by the PEO Vendor. Sales brochures and fancy proposals are easy to print; however, One-on-One contact reinforces credibility.

Key Words for the Business Owner’s Consideration

Look at the following key words for the business owner’s consideration:

“Responsible for…” – means that the PEO Vendor is the lead and assumes all cost and liability associated with the action.

“Assist with…” – means that the Business Owner is the lead and assumes all cost and liability associated with the action. The PEO Vendor’s role is to help and support the Business Owner in that action.

“Advise on…” – means that the Business Owner is the lead and assumes all cost and liability associated with the action. The PEO Vendor’s role is to recommend and suggest to the Business Owner regarding that action.

“Consulting…” – means that the Business Owner is the lead and assumes all cost and liability associated with the action. The PEO Vendor’s role is to provide expert advice or information to the Business Owner regarding that action.

Costing Methods

Identifying the Business Owner’s Hard Dollar Cost

For purposes of this Guide, the Business Owner’s Hard Dollar Costs are defined as fully allocated costs for an activity(s) that include the following:

  • All direct and indirect personnel
  • Payroll (Federal Insurance Contributions Act Social Security and Medicare (FICA)
  • Federal Unemployment Tax Act (FUTA) and State Unemployment Tax Act (SUTA))
  • Insurance (Workers’ Compensation (WC) Premium and Annual Audit)
  • Materials and supplies
  • Equipment
  • Software
  • Capital depreciation
  • Rent
  • Maintenance and repairs
  • Utilities
  • Travel
  • General / administrative overhead

Pricing Formula for PEO Services

The Cost Elements typical to PEO Service Pricing includes the following formula:

FICA + FUTA + SUTA + WC Premium (Pay-As-You-Go) + Administrative Fee = Billing Rate.

Variables That Affect PEO Pricing

The Variables that affect PEO Pricing are: (1) the Annual Amount of Payroll as a Ratio to the Number of Employees, (2) the NCCI Experience Modifier Rate, (3) the Risk associated with the Business Type, and (4) the SUTA Rate based on the Annual Employee Turnover and Unemployment Claims Paid.

Therefore, PEO pricing is usually related to gross payroll, and is a “Billing Rate” stated as a cost per $100 of gross payroll. Most PEO’s combine all employee related costs (Bundled Price) into a factor for each workers’ compensation class code, to allow for a single payment, which is simple and predicable for the Business Owner.

Once the “Billing Rate” has been established, the cost per $100 of payroll remains fixed, excluding any statutory increase in the minimum wage, employees taxes, sales tax or workers’ compensation rates. Keep in mind, a PEO Vendor may or may not charge a one-time “Set-Up Fee”.

In addition, a PEO Vendor may or may not require a one-time (one pay period) payroll, payroll taxes, workers’ compensation, and employee benefits premium Deposit, prior to the processing of the First Payroll.

Note: A PEO Vendor may or may not charge for Pre-Employment Services such as: Background Checks, Drug Screens, and Credit Checks.

Employee Benefits – Health – Welfare – Retirement

The information in this chapter has been written to provide the basic information about Group Health Insurance Plans, Welfare Plans (Ancillary Products), 401(k) Retirement Plans, and how they are typically implemented in a Co-Employer Arrangement.

Additionally, to minimize any risk to the Business Owner, offering benefits to Your Employees must be done correctly and in compliance with IRS/DOL/ERISA regulatory guidelines.

PEO Vendors bring to the table a selection of plans that will have different requirements for participation, different underwriting and enrollment procedures, and different premium payment timelines.

Caution

With no consideration of a cost/benefit comparison of the current Benefit Plan(s) in-force and available to Your Employees; PEO Vendors whom require that their Group Health Insurance Plan, and/or their Welfare Plans (Ancillary Products), and/or their 401(k) Retirement Plans be adopted as the only option(s) available to the Your Employees; are generally more interested in establishing an “Exit Barrier” to the PEO Arrangement.

Group Health Insurance Plan – Requirements for Participation

Health Carriers will set a specific minimum percentage of the monthly premium, for Employee Only, to be paid by the “Work Site” Employer (Business Owner), with the balance of the monthly premium as the responsibility of the employee.

Additionally, a minimum percentage of eligible employees must participate in the plan. Typically, these percentages will be 50% of the monthly premium, for Employee Only, to be paid by the “Work Site” Employer (Business Owner) with 75% of the eligible employees participating.

Note: The 75% participation requirement does not include employees who already participating in a group or personal health plan. For example, they are covered on their spouse’s medical plan. Also non-eligible are employees or employee dependents that are on a Social Security disability.

Group Health Insurance Plan – Underwriting and Enrollment Procedures

Medical Election Form

First, the PEO Vendor should provide the Business Owner with a Medical Election Form. The form acts as documentation of the desire to enroll the Your Employees in a Group Health Insurance Plan. It also provides acknowledgement, by the Business Owner, of the participation and eligibility requirements of the Group Health Insurance Plan being offered.

Medical Consensus Form

Then, all the employees who will be participating in the plan must complete a Medical Census Form. Then, they review these forms to provide a quote of monthly premiums for a Group Health Insurance Plan. The PEO quotes these premiums based on rates associated with the type of coverage (80/60, 90/70, etc.), the optional yearly deductible, the geographic region, and the type of prescription drug coverage selected.

Group Health Insurance Plan Application

Then, the employees then fill out the Group Health Insurance Plan Application, which includes the employee, spouse and dependents information. Those employees not participating will fill out the portion of the application where they decline coverage.

Cafeteria 125 Plan

Finally, upon completion of the application, employees may be given, depending upon the PEO Vendor, an opportunity to enroll in a Cafeteria 125 Plan. They can select or decline this option but they must sign documentation verifying their decision.

As the “Work Site” Employer (Business Owner) offering benefits to Your Employees, there is an absolute obligation to meet Internal Revenue Service (IRS), U.S. Department of Labor (DOL) and Employee Retirement Income Security Act (ERISA) compliance requirements in presenting and offering these benefits.

Group Health Insurance Plan – Premium Payment Timelines

Typical to the PEO marketplace are two (2) ways of payment for insurance product premiums: Payment (1) is referred to as “Pay As You Go” which is payment by pay period for effective coverage only for the next pay period, and Payment (2) is referred to as “Monthly Pay In Advance” which is payment for effective coverage for the month following the last pay period.

Because Payment (1) “Pay As You Go” does not provide for coverage beyond one pay period, this method for collecting premium payment is often used, by a PEO Vendor, as an “Exit Barrier” Strategy. Meaning, with a Payment (1) premium schedule, terminating the CSA may have an immediate impact on the continuation of Your Employees’ insurance coverage.

However, Payment (2) “Monthly Pay In Advance” does provide for coverage until the end of the month for which premiums have been paid.

Welfare Plan (Ancillary Products) – Requirements for Participation

Welfare Plans (Ancillary Products) generally including: Dental Plan, Vision Plan, Short-Term Disability Insurance, Long-Term Disability Insurance, Life Insurance, Accident Insurance, Cancer Insurance, Critical Illness Insurance, Hospital Confinement Insurance, Term Life Insurance.

Offerings for a Welfare Plan are individual purchases with no “Work Site” Employer (Business Owner) premium payment requirements.

Underwriting and Enrollment Procedures

The Insurance Representatives generally conduct Underwriting and Enrollment for Ancillary Products on-site (and not the PEO Vendor).

Insurance Representatives use Applications/Enrollment documents to create a data file on each policyholder. They use this data to print individual insurance cards, provider listings and to provide a mailing address for sending the employee a copy of the policy.

Welfare Plan (Ancillary Products) – Premium Payment Timelines

Normally, premium payments are “Monthly Pay In Advance” which is payment for effective coverage for the month following the last pay period.

401(k) Plan Overview

Through the PEO Vendor, the Business Owner, as the co-employer, may choose to offer a 401(k) Plan to Your Employees. This type of retirement vehicle is a single multiple plan designed by legal experts to conform to IRS regulations that address plans in a PEO/Client relationship/contract. Essentially, the plan is set as a single plan with the PEO Vendor as the fiduciary and with provisions for multiple participating co-employers. Furthermore as the co-employer, the Business Owner adopts the plan through an adoption agreement to make it available for their employees to participate. The PEO Vendor’s Third Party Administrator (TPA)’s responsibility includes the following:

  • All non-discrimination testing
  • Government filings
  • Other administrative actions

Eligibility

During the adoption process, the Business Owner has the option to choose to provide or not provide some level of employer “matching” contribution. Likewise, the Business Owner determines what the eligibility criteria will be.

Payment Requirements

The following includes information about payment requirements.

Payment of Employment Taxes and Wages

In addition to FICA, FUTA, SUTA, and WC Premium. by contract, the PEO Vendor assumes the responsibilities for payment of wages, salary, or other compensation made on a recurring basis to Your Employees.

The provisions or the Texas Staff Leasing Services Act guides the entire process.

Payment for PEO Services

Prior to the “Pay Date” the PEO Vendor will Invoice the Business Owner at the contracted “Billing Rate” per $100 of Processed Payroll plus Insurance Premiums, plus 401(k) Contributions, plus Miscellaneous Deductions, and any additional charges for such services as Pre-Employment Background Checks, etc.

Prior to Payroll Processing, the Business Owner reconciles and approves the Invoice Amount.

Then before the actual payroll processing begins, the Business Owner will simultaneously transmit approval and payment of the Invoice Amount to the PEO Vendor.

Upon receipt of payment, the PEO Vendor processes payroll and directs payment to the individual “co-employees”.

What PEO Vendors Need to Know

To assist a PEO Vendor to properly prepare a Request for Service Proposal, the following information is necessary:

1. Identify if a PEO Arrangement is currently in effect.

2. Please provide the Company Name of the current PEO.

3. Please provide the current “employer of record’s” Federal ID #.

4. Please provide the current “employer of record’s” SUTA Rate.

5. Please provide a copy of the most recent Payroll Report.

6. Please provide the number of Full-Time and Part-Time employees.

7. Identify the current Payroll Frequency.

8. Please provide the current Workers’ Compensation Wage information: WC Class Code, Number of Employees in that Code and the Annual Wages Paid in that Code.

9. Please provide a copy of the Workers’ Compensation Policy Declaration Page.

10. Please provide a copy of the current “employer of record’s” Workers’ Compensation Loss Runs for the Previous Three (3) Years.

11. Please provide a copy of the OSHA Logs for the previous 3 years.

12. Please provide a copy of the General Liability Declaration Page.

13. Please provide a copy of the Schedule of Benefits for the current Health Care Plan.

14. Identify the name of the current “employer of record’s” current Health Plan Provider.

15. Provide the employee census (DO NOT include NAMES or ANY PERSONAL IDENTIFIERS) for the current “employer of record’s” current Health Care Plan.

What Questions to Ask the PEO Vendor

If you want to assure a low risk factor for the Business Owner and to evaluate a Request for Service Proposal, then request each PEO Vendor to provide the following information:

  • State and address any and all “Set-Up Fees”.
  • State and address any and all services included in the “Billing Rate”.
  • The Staff Transition Process.
  • Their Communication Method(s) used when interacting with Your and Your “co-employees”.
  • The Customer Service Model.
  • Description of theirPayroll Services. (Input Methods, Payment Methods and Reporting) and (Responsible for…, Assist with…).
  • Description of their Employee Benefits Plans. (Health, Welfare and Retirement).
  • How they fund Employee Benefits.
  • How they pay Employee Benefits. (“Pay As You Go” or “Monthly Pay In Advance”).
  • Describe their Human Resources Services. (Responsible for…, Assist with…, Advise on…, and Consulting…).
  • Describe their Safety and Risk Services. (Responsible for…, Assist with…, Advise on…, and Consulting…).
  • Provide copies of their Certificate of Insurance for both Workers’ Compensation and General Liability.
  • Describe their Background and History. (Length of Time in the PEO Business).
  • Describe their Qualifications. (License, NAPEO, ESAC, Certification Institute, Principles and Key Staff).
  • At the Personal Presentation, Request that the PEO Vendor provide a Sample copy of their “… / Client Leasing Agreement (Texas Employees)

Beyond PEO

If you want to determine which candidates are the right fit for your company, then download and access your free white paper, 5 Guiding Principles For Recruiting a Star-Quality Team.

How to select a peo

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Advantages of PEO Services

See also:
How to Select a PEO
PEO Compared to Outsourcing Payroll
Professional Employer Organization FAQ’s
Step Method Allocation
Direct Method Allocation

Advantages of PEO Services

Some of the advantages of PEO Services include that the Business Owner will continue to face obstacles in Employee Benefits, Human Resources Management, Employment Practices, and Regulatory Compliance. In addition, a lack of expertise and training in these critical areas can make it difficult for consistent and timely regulatory compliance with Federal Laws, State Laws and Employment Law Court Rulings.

PEO Arrangement

The PEO arrangement is the opportunity for a Business Owner to consolidate vendors, to secure a one-stop source for payroll services, employee benefits and workers’ compensation insurance, to obtain a level of expertise often not found in-house, and to leverage the economy of scale purchasing inherent in the PEO business model.

Because a PEO does not normally require on-site workspace, while some work must take place on the company property; technological advances make communications easy and efficient which may decrease the Business Owner’s overhead expense.

Additionally, the PEO will maintain their own equipment and supplies, reducing the need for peripheral capital expenditures.

This is a time that employees are more benefit conscious. This is because Employee Benefit costs continue to rise. In addition, competitive benefit plans are becoming more difficult to find. The Business Owner and the “co-employees” will have the option to take advantage of a stable low-cost comprehensive Employee Health and Welfare Plans.

If you want to determine which candidates are the right fit for your company, then download and access your free white paper, 5 Guiding Principles For Recruiting a Star-Quality Team.

advantages of PEO services

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