Since 2000 StaffMarket has assisted over 5500 companies
obtain proposals and evaluate PEO and HR Outsourcing solutions.
Questions and Answers about Employee Leasing company - PEO companies
A Employee Leasing company can offer a relationship that works in the best interests of everyone.
How does a Employee Leasing arrangement work?
When a company engages a PEO, a co-employment relationship is
created between the company, PEO and the workers of the
company. The company and the Employee Leasing company contractually
allocate employment responsibilities and liabilities. The Employee Leasing company
assumes responsibility for obligations related to
human resources, workers' compensation, payroll, labor law compliance
and employment taxes. If the company wants to make employee benefits
available to the workers, thePEOwill offer the workers health
insurance, disability insurance and other expanded benefits under their
overall corporate plan.
Why would a company use a PEO?
It's simple. Using a Employee Leasing company allows business owners
and managers to focus on their core competencies... not worrying about the
non-revenue related activities of employment. Many businesses don't have
the internal expertise, capability or desire to handle regulatory compliance,
risk management, payroll, employee benefits administration and other
employment related activities.
Is this the same as temporary staffing?
No. PEOs normally do not recruit, train or provide staff to their client companies as do temporary staffing firms. APEOarrangement usually involves all or most of the employees of the client company in a long-term employment relationship.
In a Employee Leasing arrangement, do I lose control of my employees?
No. Employee Leasing client companies and the PEO become partners in the co-employment relationship of their workers. The client retains responsibility for the day-to-day management of the workers. Clients maintain all "hire and fire" authority, handle promotions and provide workplace supervision as required.
What responsibilities are generally assumed by the Employee Leasing company?
PEOs are responsible for maintaining compliance with all regulations regarding the
reporting and payment of federal, state and local taxes on wages paid to
the workers. The PEO is recognized by the Internal Revenue
Service as the "employer of record" for liability for federal income and
unemployment taxes and is responsible for these payments. Many states also
recognize the PEO as the employer for purposes of
providing workers' compensation coverage. In states that require workers' compensation
coverage, the PEO is responsible for providing the insurance.
The PEO is also responsible for compliance with the broad range of
employment laws and regulations including: COBRA, Title VII,
ADA, FMLA, HIPPA, Equal Pay Act, and Age Discrimination in Employment Act.
What will employees think?
Workers want the quality health benefits and the opportunities for
retirement savings that a PEO can offer. Through
a Employee Leasing company, Fortune 500 quality benefits can now be available to
small and medium size businesses.
What other services are offered by a Employee Leasing company?
Many PEOs have expanded their service offering to include
capabilities needed by more sophisticated companies. Offerings may include employee
background checking, applicant drug testing, supplemental employee benefits,
Employment Practices Liability Insurance, applicant tracking, employee
outplacement assistance, etc. These services may be priced individually or
offered as part of the overall services plan.
What about PEO billing and accounting?
One of the best features of using a PEO is the single payment made
to the Employee Leasing company. One payment (usually made with each payroll cycle) is
all that is required. The client company reports the amounts to be paid
to each employee and the PEO does the rest. Many PEOs offer the
ability to report detailed labor related costs to the client company in a
form that provides easy integration with internal accounting software.
What if a company already has an attractive health plan or workers' compensation plan?
Many Employee Leasing companiess now offer the ability to "unbundle" services and benefits for clients that already have these capabilities. The advantages of using a PEO remains an attractive solution for many of these companies.
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