PEO Services for Small to Mid-Sized Businesses
If you’re a small to mid-sized business, you should be working with a Professional Employer Organization (PEO). As a business owner, you likely do not have the time or resources to effectively manage all the areas a PEO can. PEOs assist you with a variety of services, including payroll administration, employee benefits, worker’s compensation, HR, and Retirement.
A PEO will take care of the minutia so you can focus on growing your business and your employees reap the rewards as well. Your staff will have access to benefits that a business of your size does not have access to. Employees get access to high-quality health care plans at affordable rates. Helping you attract and retain the best talent.
What is a PEO and What does a PEO do?
A PEO is an acronym for a Professional Employer Organization. PEOs provide small to mid-sized businesses with peace of mind so you can focus on growing your business. Here are the services of a PEO.
How do you find the right PEO?
Figuring out which PEO to go with can be daunting as there are over 900 PEOs in the United States. Instead of taking the time to research each individual PEO to evaluate whether they offer the specific services you need, use a PEO broker. They will work with you to ensure you get matched with the right PEO for your needs.
A PEO broker compares different PEOs to evaluate how they meet your specifications and if they don’t, you won’t waste your time looking into their services.
PEO brokers will compare your total cost, your health insurance plans, your workers’ compensation, and so on. Brokers ensure the PEO and your company to be a good fit on services, price, and value. PEO brokers negotiate better pricing so you’re sure to get the best price possible. They are your advocate in the PEO arena. Finding a reliable PEO broker is the first step to finding the right PEO expert to fit your needs.
Certified Professional Employer Organization (CPEO)
In 2014, the IRS enacted the Tax Increase Prevention Act. It established a program for PEOs to become Certified Professional Employer Organization by going through their voluntary certification program. If they are certified, that means a certified PEO they have gone through thorough financial, background, and reporting requirements that were outlined by the IRS. Being certified guarantees tax benefits and financial protections to clients of a certified PEO.
What’s Co-Employment?
Co-Employment is the contractual agreement and sharing of certain employer responsibilities between the PEO and the client, as delineated in a contract typically called a client service agreement (CSA).
Under Co-Employment your company and the PEO share the responsibility of your staff. You control the day-to-day activities of your employees, and all hiring and firing.
PEO Payroll Services
If you decide to join a PEO for payroll services, the PEO takes on the responsibility of managing your employee taxes and payroll. The PEO uses their Tax Identification Number instead of yours. Using a PEO for your payroll provider helps you manage your time. You won’t have to worry about getting your employee’s information, sending out checks, or figuring out the required withholdings and taxes. The PEO handles that for you.
Professional Employer Organizations will take a lot off your plate. They will handle paying employee wages, issuing W-2s, and depositing taxes. They will send out payments to part- and full-time employees, as well as contractors and vendors when needed. The PEO is required to adhere to strict tax and financial reporting requirements and stick to industry best practices.
PEO Health Insurance
As a small business owner, it can be difficult to find affordable rates for health insurance. Working with Professional Employer Organizations will help give you better access to a wider variety of benefits at better rates. Your employees will be able to have the opportunity to get benefits that big businesses typically see.
A PEO provider can help you with the following PEO Services:
Ancillary Benefits - Dental, Vision, Disability, Life, and AD&D
HSA, FSA, and HRAs
Employee Assistance Plans
PEOs work with leading health insurance providers, including Blue Cross Blue Shield, Cigna, Aetna, and Kaiser Permanente. You will be able to access plans that are not normally available for smaller businesses. Being able to offer high-caliber insurance plans will retain and attract employees.
The PEO handles all of your administration, enrollments, COBRA, helping your staff pick plans, renewals, and your open enrollments.
PEO Workers’ Compensation
A PEO offers Workers’ Compensation insurance. They will address any employee complaints and has the right to hire or dismiss workers. When a PEO is a policyholder for workers’ compensation, it creates a safer work environment. They will conduct the following safe practices:
Drug tests
Safety procedures and programs
Injury claims
Complete claims management
Safety training and OSHA
Drug-free workplace programs
A lot of these safety practices can be new to small to medium-sized business owners, especially if they’ve just been established. A newly founded business doesn’t have the time or resources to properly address employee safety concerns. Everyone benefits from a safer workspace, especially when there are fewer injuries and complaints.
If there are any injured worker claims, a PEO will provide complete case management for the covered employee. They will monitor the treatment of the employee to ensure they are receiving proper care. A PEO will also administer a return-to-work program to ensure a returning employee comes back to a modified job that accommodates their injury. Effectively managing an injured employee’s requirements and claims will benefit the employee, client company, and the PEO.
PEO Human Resources
A PEO gives you access to SHRM Certified Human Resource guidance, support, and service. So you are compliant with State and Federal rules and regulations and you avoid any legal mistakes when managing, hiring, and firing your employees. The PEO takes a huge chunk of HR service work away from you and your employees so you can focus on your day-to-day operations instead of dealing with HR.
Your Handbooks, Employee Training, Recruiting and any employee-related questions or concerns are easily addressed by the PEO’s HR staff. You can use your PEO as a resource as much or as little as you would like - so if you happen to have an HR staff already, then you can use your HR and use the PEO for administrative tasks.
PEO Retirement
Offering your employees Retirement is vital in today’s work environment. PEOs enable you to offer 401-K and 403-B plans to your employees. The PEO handles all of your testing, 5500 reporting, deductions, and ensures you are compliant with State and Federal regulations.
The PEOs partner with providers like TransAmerica, Merrill Lynch, Lincoln and, many others so you have the experience of industry leaders without the burden of administrative tasks, and the cost.
What is the Difference Between a PEO and HR Outsourcing?
There are key differences between Human Resources Outsourcing (HRO) and a PEO:
PEO: The PEO works as a co-employer, making them responsible for payroll services, paying taxes, creating W2s, and managing tax liabilities.
In this setup, you will keep control over business decisions and day-to-day operations. With employee benefits, they help negotiate with carriers, provide legal notifications, help with employee enrollment, and control COBRA administration.
HRO: An HRO’s services are flexible since they don’t become co-employer. You can pick and choose what you want an HRO to handle, such as recruitment, benefits management, and/or payroll.
HROs are better suited for large companies that already have an HR department. They can outsource tasks while maintaining control over their entire systems. For a small business, PEOs are a better option as they give you access to benefits that you typically wouldn’t.
Let Dinsmore Steele Help Find Your PEO
Sifting through the countless PEOs on the market can take hours—much more time than you have to devote to this process. If you’re looking to find better benefits for your employees, outsource payroll processing, and have someone help you with workers’ compensation insurance, let Dinsmore Steele step in.
As the nation’s largest PEO broker, we will do all of the work for you, so you just choose which PEO makes the most sense for you. You can make an educated decision, and benefit from the services of a PEO.