Complete PEO Solutions
Providing Employee Management and Human Resources hassle-free
What Is a PEO Service?
“… reducing busy work on the employer’s end…”
A professional employer organization, or PEO service, allows employers to manage their employees without worrying about the fine details. Tasks like payroll, reporting and compliance are all handled by the PEO, reducing busy work on the employer’s end and ensuring the employer is compliant with all employment laws. In short, it’s like having an expert HR team without the expense that comes with having a team on staff.
How do PEO Services Work?
Co-employment
The important term when discussing PEOs is “co-employment.” This means that the PEO acts as the employer of record for their client’s employees. It’s much like leasing your employees back to yourself. The employer has a group of employees that they need to account for, and the PEO officially and legally employs them in order to properly manage them.
PEO Does Not Interfere
An important note: The PEO is the employer of record, but the company still directs the employees in their day to day tasks. The PEO does not interfere with the company’s daily operations in any capacity.
Benefits of PEOs
The concept of PEOs emerged in the late 60s, and by the 80s, there were hundreds of PEOs operating in the U.S. Many companies are just now understanding the benefits of bringing on a PEO as their services are a proven way to better manage a team of employees.
“No matter the number of employees they can always handle our payroll needs.”
– Vickie Matthews
Payroll
PEOs can manage every step of the payroll process, and are flexible enough to account for things like commissions or bonuses.
Workers Compensation
A PEO provides workers’ compensation to all of the employer’s workers, which is a critical layer of protection, especially if the employer doesn’t already have insurance.
Benefits Management and Tracking
ust like a PEO can offer and oversee workers’ compensation, the PEO can often provide an attractive benefits package and help employees manage it.
Personnel Management
Experienced PEOs often have personnel management software that makes it easy to track a variety of values.
Payroll
Ideally, a PEO should offer several payroll options, including check delivery, direct deposit (into an account the employee specifies) or offering debit cards instead. A PEO can also account for bonuses, commissions or other adjustments to an employee’s salary.
Employees can also update their payroll information (such as withholding changes) without going through their employer, instead notifying the PEO through their own online portal. As payroll is not just about paying employees, essential tax information will also be collected and delivered to the proper institutions.
A PEO also handles this for the employer, collecting and paying out withholding amounts, garnishments or other judgments. As major penalties can result from poor tax administration, a PEO offers peace of mind in this regard.
Workers Compensation
A PEO provides workers’ compensation to all of the employer’s workers, which is a critical layer of protection, especially if the employer doesn’t already have insurance. The PEO, again, is the employer of record for all of the client’s employees, so the PEO has a major incentive in protecting the employer from liability.
For example, a PEO can help develop materials (like handbooks or applications) that may counter grievance claims made by employees. Because the PEO has such a vested interest in this area, they may be willing to provide safety inspections and consult with the employer regarding safety regulations.
The PEO will use OSHA’s regulations as the template for developing safety procedures, and this, along with workers’ compensation, will shield the employer from liability. The PEO will also process any claims made against the company and ensure that employees have the help they need in obtaining workers’ compensation or other benefits.
Benefits management And Tracking
Just like a PEO can offer and oversee workers’ compensation, the PEO can often provide an attractive benefits package and help employees manage it. This is especially useful for small and medium sized businesses, as a PEO may provide benefits that the employer isn’t prepared to.
With a superior benefits package, it will be easier for the employer to attract highly skilled and talented workers. A PEO offers their clients, and their workers, tools to track benefits usage and details. For example, through the PEO’s online platform, an employee can view a summary of their benefits, make changes to them, add beneficiaries and keep track of all payroll deductions.
On the administrative side, the employer can set up a benefits package, put together incentive programs and create reports for further analysis, which will help improve benefits administration.
Personnel Management
A PEO can also perform the many tasks, large and small, that allow companies to get the most out of their employees. Experienced PEOs often have personnel management software that makes it easy to track a variety of values. For instance, the software will track attendance and time, using a simple punch in and punch out system.
It’s also cloud-based, so employees can log in their times from anywhere. PEOs design their software to be compatible with as many business models as possible, and companies can get real-time tracking of employee attendance. PEO software can also be used to monitor performance and set up performance goals using custom metrics.
Performance management software allows employees and companies to work with each other in developing performance goals and plans, strengthening the relationship between worker and employer. The employee is given a more proactive role in developing their skills and career, and their employer has tools to support and incentivize their workers.