Buyers Guide for PEO - Professional Employer Organization Services

Signing up with a PEO

Once you have selected your vendor the PEO will assign an account representative that will work to assemble the proper paperwork to “make things official”. The sign-up may include I-9s (a governmental document for immigration status), W4 (for tax withholding), benefit plan enrollments, employee pay rate establishment, direct deposit information for employee payroll, and other necessary documents. Most PEOs can work to import your existing payroll data (from Quickbooks or other payroll software) directly into their HR/ payroll system. In addition, be advised that work comp coverage for an individual employee is not effective until the paperwork is completed for that person. PEOs will offer a cafeteria of cost reporting options based on your needs and preferences for check registers and costing reports. In addition, data feeds are available back to your general ledger programs. Also many PEOs can offer time-clock systems that feed time and attendance data directly to the PEOs payroll system. Some offer the ability for managers to access real-time attendance data. Part of the sign up also includes establishing your vacation and sick leave policy and setting any vacation account balances.

Your StaffMarket RFP captures your requirements and ensures responding PEOs know what you need.

PEO Billing

Each pay cycle (weekly, bi-weekly, monthly or semi-monthly) the PEO will present you with an invoice. For the most part, the PEO will not pay employees until your payment has cleared. PEOs work on thin margins and one bad account that stings them for a whole payroll is bad business for them. Most PEOs will accept wire transfers, ACH or direct debit arrangement for payment.

The on-going client-PEO relationship

A relationship with a PEO requires significant interaction. You will interact with them on a regular basis for payoll, HR subjects and insurance claims issues. Most PEOs will assign you an HR consultant and/or payroll rep that will be dedicated to your account. These persons are your support when things go wrong (and they will because payroll is involved!). Most PEOs work hard to deliver a high service level and want to keep you happy.

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Shopping for a PEO?
Caution: Avoid list sellers and spammers

Recently several websites have advertised the ability to "Request free PEO quotes" or offer "free advice" on the PEO industry. Be advised that although these web sites may look professional they simply attempt to get your contact information so they can sell it to as many people as possible. One of them sells everything from gift cards to copiers! The unfortunate result is sales calls from people that just bought your contact information, regardless of whether they have what you need or are even a legitimate PEO.

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