What is a PEO

PEO stands for Professional Employer Organization.  PEOs work with businesses to help them manage Human Resources functions that may otherwise take up too many resources in headcount, hours, or payroll.  Some of these benefits can include payroll and payroll taxes, employee benefits, and compliance support.

What are the benefits of using a PEO?

PEOs can be exceedingly beneficial for startups to midsize companies.  PEOs allow business owners to focus on the day-to-day of running and growing their business versus spending time on administrative tasks.  Successful business owners know that it can be easy to miss a revenue-generating opportunity when consumed with paperwork.  In fact, according to NAPEO, businesses with a PEO arrangement actually grow seven to nine percent faster and are 50 percent less likely to go out of business (NAPEO).

 

As an added benefit, PEOs allow small businesses to offer benefits and employee perks that originally seemed financially out of reach. By offering similar benefits packages, smaller companies can compete for the best talent with larger corporations, leveling the playing field.  Most PEOs can assist in offering your employees:

  • Health insurance, including dental and vision insurance

  • Health care flexible spending accounts

  • Disability insurance

  • 401k

Additionally, PEOs can reduce the risk companies acquire when hiring employees.  Many new business owners underestimate the amount of paperwork that is required for each individual employee, and PEOs can help with everything from onboarding to taxes to Equal Employment Opportunity laws and regulations. PEOs are responsible for staying up to date on constantly-shifting employment law so your business can keep their focus where it should be. 

How do I join a PEO?

Once you select a PEO that meets your needs, you will sign a Client Service Agreement outlining what liabilities will be shifted to the PEO.

When you join the PEO, you will enter into a co-employment relationship, in which your employees will be employed by both your company and the PEO.

PEOs will help to manage your company’s administrative tasks and risks, however, you will always maintain control of decision making and business operations. 

How do I Pick a PEO?

There is no doubt that joining a PEO is a surefire way to eliminate the strain many business owners feel due to overwhelming administrative tasks.  But, with almost 1,000 different PEOs to choose from in the US alone, the choice can be overwhelming in and of itself. 

To make sure your PEO is the best fit for you, speak with multiple PEOs to ensure the company you select can meet your needs, and grow with your business. Make sure the PEO you select is IRS certified and a member of the NAPEO.  Last but not least, review all agreements very carefully – what guarantees are provided and how can you exit the contract?

EPS may offer a solution to your PEO needs 

EPS offers value-added functionality and a high level of client satisfaction.  From payroll to insurance, our comprehensive platform can significantly expand the options available to your employees.  EPS offers unbeatable support backed by an unparalleled team of experienced specialists to assist with your PEO needs.  If you are unsatisfied with your current provider or are looking for a PEO for the first time, give us a call today.