What is a PEO?

PEOA Professional Employer Organization, or PEO, is an outsourcing solution that has become exponentially popular in the current economy. With this solution, a PEO partners with a client to provide HR (HR) services and implements a custom-made solution that addresses the client's HR needs such as employee payroll, workers' compensation, employee benefits, and compliance with employment law.

The partnered client may save money, gain a competitive advantage, and achieve additional time to focus on more important aspects of their business while an experienced and dedicated HR administrator, provided by the PEO, supplies and manages a vast assortment of employee benefits, workers' compensation and unemployment claims, while making sure the client is in full compliance with the America's ever-evolving healthcare reform and employment laws.

The Top Benefits of a PEO

The top benefits that a PEO offers to their clients fall into the categories of healthcare reform, workers' compensation, state unemployment rates, and employment law changes.

Healthcare Reform

  • Life
  • Health
  • Vision
  • 401K
  • Flexible Spending Accounts
  • Dental
  • Disability
  • Cobra

Allowing the partnered client to compete in the labor market, PEO's provide support of broad employee benefit packages, including but not limited to:

Workers' Compensation

A PEO's experience and expertise provides their client with assistance with payroll and billing services.

  • Payroll Deposits
  • Payroll Reports
  • Paycheck preparation
  • Payroll deduction administration
  • W-2 forms
  • State required new hire reports

Risk management and compliance improvement in the client leads to reduced liability

Personnel solutions are administrated by PEO professionals and trainers for current Employment Law.

  • Claims management
  • Employee safety training and evaluations
  • Avoidance of year-end audits
  • Ability to pay-as-you-go

Employment Law Changes

  • Equal Employment Opportunity Commission (EEOC) claims management
  • Policy development and training
  • Employment law education and compliance solutions
  • Employee orientation and handbooks
  • Disciplinary policy development
  • Termination support
  • Unemployment claims management

Communication Between PEO & Client Is Key

As with any partnership, communication is crucial when it comes to a successful union of PEO and client. Both entities must work together, cooperating to make the arrangement a success. The client will always retain ownership, and ultimately accountability, of all decisions that are made operationally while the PEO will retain responsibility and liability of employee benefits, workers' compensation, payroll, and payroll taxes. However the PEO should make the details of the partnership flexible so their solution is a good fit for the client. In general, this is how the individual responsibilities fall:

PEO Responsibilities

  • Benefits Administration
  • Employee Files
  • Employment Law Reports
  • Payroll
  • Tax Reports
  • Worker's Compensation

Shared Responsibilities

  • State and Federal Compliance Issues
  • Employment Law
  • Policy Administration
  • Workplace Safety

Client Responsibilities

  • Employee Hire and Orientation
  • Enforcing Policies
  • Employment, payroll, and workplace injury reports

The PEO Partnership

A PEO, like any outsourced solution, must fit their partnering client. The partnering entity can ensure a good fit takes place by knowing their own strengths and weaknesses before implementing a solution, and a good PEO will assist in this evaluation. The client should assess their healthcare, workers' compensation, unemployment rates and employment law practices, and then talk with their PEO about the solutions they can provide and the benefits they may gain.

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