A professional employer organization (PEO) handles payrolls, onboarding and offboarding employees, benefits packages, 401 (k) plans, employee handbooks, workers compensation, and HR compliance across federal and state regulations. PEO services have many features, and they vary from company to company.
Generally, most PEOs offer the following services payroll processing, health insurance options, and support, HR regulation compliance, HR management and consulting support, recruiting and onboarding support, safety compliance and risk management, workers compensation insurance, tax processing, customer service, and legal agreement.
IMAGE: UNSPLASH
How Does A PEO Work?
Typically, PEO companies work with a small or medium-sized business with between 20 to 75 employees. Working with the PEO company frees up employer’s time because they are not concerning themselves with HR administration and can focus on the business’s daily operations.
A PEO company subcontracts your employees through a co-employment agreement. A co-employment deal is a contract that shares employer responsibilities between your business and the PEO company. By sharing responsibilities, your business can leverage the help and services that the PEO company provides. Some items that the PEO company can help with are payroll administration, tax filing, and HR support.
How To Choose A PEO Company
A PEO company offers business solutions for your office, including managing payroll, tax administration, taking over HR functions, immigration consulting, draft complaint employment contracts, onboarding employees, providing legal services, and recruiting top talent.
To be sure you are choosing the best PEO company to partner with, consider the following:
- Consider if the company is a member of the National Association of Professional Employer Organizations.
- Confirm they have the voluntary certification program for PEOs under the IRS or are looking to apply for the certification in the future.
- Validate that the companies financials are reviewed and approved by an objective auditor yearly.
Selecting a PEO company can be difficult, but services like the chamber of commerce can help you choose the best PEO options.
Here are five traits to consider when looking to choose the best PEO company:
1. Comprehensive Benefits For Employees
PEO organization’s job is to help provide your employees with access to cost-effective and full benefits without the overwhelming costs. The PEO can offer a wide variety of benefits to your employees through PEO-sponsored benefit plans, like medical, dental, and vision coverage. As a co-employer, the PEO handles the administrative tasks that include negotiating with insurance companies, enrolling employees, producing legal notice, and handling other administrative tasks. 3
2. Automating Payroll Services
A PEO organization can decrease your payroll-processing costs. The organization can automate the payroll process. You want to look for a PEO organization that can provide payroll services with a simple and straightforward fee.
3. Managing Your HR
The laws for employment are always changing and are complex to navigate. Not being up to date on employment laws, rules, and regulations can cost your business. A PEO company is up to date and guides to help avoid costly.
4. Providing Excellent Customer Service
You want to ensure that the PEO company you are working with has excellent customer service and is committed to helping you and your business reach your goals. If you can’t get ahold of your account manager when you have questions, then the PEO service is not beneficial to you.
5. Hiring Top Talent
Job positions open quickly and need a fast turnaround to find a qualified and knowledgeable employee. Most small or medium-sized businesses don’t necessarily have the tools, time, or budget to recruit strong candidates. A PEO should have additional services they can offer, that include assistance in recruitment, and the ability to provide access to professional recruiters who know your company’s employment needs.
6. Protecting Against Lawsuits
A PEO company shares the liability that is associated with specific employment-related claims, such as wrongful termination. Having a PEO as a resource, you can tap into the knowledge of multiple experts who can alleviate a costly settlement. A PEOs HR experience helps make sure agreements for terminations comply with all state laws.
Benefits Of Using A PEO Company
There are many benefits for using a PEO company, especially if you’re a small or midsized business that is growing and finding yourself spending valuable time of employee administration tasks, instead of focusing on the daily operations of your business. The following are some of the main benefits of using a PEO company:
- Cost Savings on Insurance – PEO companies save you money on insurance costs for your employees and business. By using a PEO company, you get to leverage their expanse pool of insurance to receive better rates on insurance for your business and employees.
- Less Paperwork – A PEO company uses its technology to help minimize the amount of paperwork your business has to manage.
- Compliance – A PEO company manages all of your business’s agreement regarding your employees. This helps keep your business compliant and legal when the PEO is handling it.
- Payroll Processing – With a PEO company, you can start making automatic deposits and get rid of paper checks.
- Recruiting – A PEO company, can help attract and hire top talent to your business by using some of the best recruiters.
- Legal – As mentioned with compliance, a PEO company will make sure you are filing and doing business in compliance with employee’s claims.
The Conclusion
Entering into a co-employment with a PEO company can be a massive benefit to your business. When selecting the best PEO company to partner with, it is essential to assess the needs of your business, and if the services the PEO company offer match your business needs.
A PEO company can provide your small or medium-sized business with various human resource services, including HR management, benefits administration, insurance plans, payroll administration, and processing, recruiting and outplacement support, government and tax compliance, and training and development.
A general thing to consider when choosing the best PEO company for your business is the structure of their organization. Look for a PEO company that has a dedicated team of experts who can handle your HR, payroll, risk management, and payroll needs. Working with a PEO company that offers many services that can help your business to make sure you are receiving the most out of your co-employment agreement.
If you are interested in even more business-related articles and information from us here at Bit Rebels, then we have a lot to choose from.
COMMENTS