What exactly is it?
A Professional Employer Organization (PEO) provides small and mid-sized employers with cost-effective outsourced human resource services by assuming certain employer duties and risks.
HOW IT WORKS
Managing your people is a critical part of your business, but it can take your focus away from growing it. When partnering with a PEO, you retain the day-to-day control of managing your employees, while the PEO handles your HR, payroll, and benefits administration, and provides support with risk and compliance complexities.
Major Advantages
One of the biggest advantages of working with a PEO is the access you get to affordable, high-quality employee benefits programs that give you a competitive edge when it comes to attracting and retaining top talent. With a PEO, you can compete with larger organizations in terms of your total rewards package.
The Nuts & Bolts
In its simplest form, a PEO is a co-employment agreement where the employer’s wages are reported under the PEO’s federal employer identification number and thus, employee liability shifts to the PEO.
The PEO bears the liability for workers’ compensation, unemployment insurance, and employment practices liability insurance. It also is responsible for ACA compliance and reporting, COBRA and HIPAA administration, and 5500 form filings.
Overall, a PEO can help you save time and money, reduce your employment risk, ensure compliance with regulations, and compete in the war for top talent. In short, you can get back to growing your business instead of just managing it.
