Archive for the ‘SMB, small- and medium-size business, PEO, Professional Employer Organization, employment regulations, workers’ comp, 1099s, W-2s, payroll administration, tax filing, disability insurance, PRO admin’ Category

PEOs Can Be Advantageous

May 6, 2018

In today’s world of regulations, administering employees has become an often onerous task.

More importantly, employee administration has become a legal trap for many smaller businesses.

Leaders like you of small- and medium-sized businesses have a vision, build and inspire a team, want to make money, and/or do something meaningful.

You want to run a business while insuring that your employees are paid, receive the best benefits and all employment regulations are met.

Just look at some of the key responsibilities of employee administration:  workers’ comp, 1099s, W-2s, payroll administration and related tax filings, disability insurance, PRO administration, etc.

They all take time away from focusing on other critical aspects that makes your business successful.

An outsource alternative exists: PEO (Professional Employer Organization).  PEOs provide services to between nearly 180,000 SMBs, with 2 to 200+ workers, employing an estimated 3.4 million people.

A PEO can help your business get the benefit cost savings and perks of a large company along with employment related compliance; plus streamline your payroll, HR and other back office functions.

Here are some of key advantages to PEOs:

Co-Employment:  PEOs can take on such responsibilities because of a practice called co-employment.

With this contract, a PEO will handle payroll administration, and related tax filings, plus provide HR support and access to benefits.

Your company will retain responsibility for daily operations and management of employees.

This sharing of responsibilities allows you to focus more on your employees and running your business.

 

Save Money:  PEOs have collective bargaining power; they are able to get better rates for benefits such as health insurance, retirement plans, workers’ compensation, commuting, gym memberships, and more.  Because the PEO is negotiating for a large pool of employees, they can get your small- or medium-size business access to better benefits at lower rates.

 

Free Up Time:  Small- or medium-size businesses take a lot of time to run.  It always seems there is more to do than hours in the day.  With a PEO handling the employment-related administrative work, you get multiple hours back every day or week to focus on other matters.

 

Be Compliant, Avoid Fines:  Each year more than 33% of small businesses get fined for making payroll mistakes.  PEOs are experts in employment-related compliance; they can help you with your payroll and filings, and in most cases file it for you.

 

PEOs offer many similar services, but they are not all the same.  Each PEO has different service providers, benefit packages and HR tools unique to their company.  Here are a few things you will want to look out for in a high-quality PEO that helps your business:

Access to Quality Benefits: health (medical, dental, vision, HSAs/FSAs), short- and long-term disability, life insurance, accidental death and dismemberment insurance, on-demand primary care services, commuter benefits, bike shares, gym memberships, among others.

Payroll Processing and Tax Filing:  automatic direct deposit payroll, pay vendors and contractors, and direct deposits; plus integrate with the existing software you are using.  In addition file tax documents such as W-2s, 1099s, 940s, and 941s on your behalf.  Provide compliance support: new hire reporting, Workers’ compensation, W-2 and 1099 filing, employment practices liability insurance, unemployment filings, ACA filings (1094-C and 1095-C), employer payroll filings (940 and (941), and statutory disability insurance.

Customer Service:  allow you to access customer support through a variety of means (telephone, Slack, chat, email, text).  Other services: HR Consulting to help you address complex HR questions; a Resources Center to see if you are up-to-date on the many labor and employment laws; and HRIS (human resources information services) Tools to manage paid time-off, onboard new employees, store important documents, access HR templates, etc.

In 2017, the IRS approved the first certified PEOs (CPEOs).  They are subject to ongoing bonding, audits, and IRS reporting, so you can be confident that the CPEO you select is being held to the highest operational standards.  That leaves you time to focus on other aspects to grow your business.

While adding to employee administration overhead (PEOs charge either a flat per-employee, per-period charge or as a percentage of total payroll), a PEO solution can be a path to greater success.

 

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