How to Find the Best PEO for Managing Employee Payroll

Payroll management doesn’t need to be stressful, For any enterprise, particularly small and medium-sized businesses, learning how to evaluate a PEO’s payroll management service can lead to streamlined, efficient, and personalized employee payroll solutions – giving you the strategic upper-hand.

So, what’s the true value of a PEO for payroll management, and how can you start the process of evaluating your options? Contact StaffMarket and we will help you navigate to the best solutions.

A PEO Does More than Just Process Paychecks

A PEO can offer a comprehensive suite of services designed to simplify payroll management. saving you time and resources that would otherwise be spent on the critical, and repetitive, task of employee payroll.

The benefits of partnering with a PEO extend beyond just handling the numbers. A PEO provides strategic support, leveraging its expertise to protect your bottom line and streamline your operations.

Partnering with a PEO Means Seasoned Expertise When You Need It

One of the most significant advantages of a PEO partnership is having a dedicated payroll specialist to offer support and guidance when you need it most.

Streamline Payroll Processes: By integrating advanced payroll software and processes, a PEO saves valuable administrative time and energy.

Greater Payroll Compliance: PEOs stay ahead of the constantly evolving web of wage laws, labor regulations, and tax regulations, even across different jurisdictions, which can help you avoid costly financial penalties.

Scale At Your Pace: As your business evolves, so do your employee payroll needs. A PEO provides scalable solutions that grow with your business, ensuring you have the support you need at every stage of your journey.

This level of personalized service simplifies your payroll operations, ensures compliance, and allows you to maximize productivity in other areas of your company.

How to Evaluate PEO Companies for Your Employee Payroll Needs

The ideal PEO should streamline your employee payroll processes and align with your business’s broader HR and growth strategies..Here’s how to ensure you choose the right PEO for your business: StaffMarket will match your needs with our database repository of PEO services.

Industry Experience

Every sector and business has unique challenges. You’ll want a PEO that is attuned to the specific nuances, regulations, and payroll intricacies you encounter regularly, such as employees who work in multiple states.

Many PEOs have experience with a wide range of industries. This gives them a wealth of knowledge to accurately answer your questions and predict future hurdles that you’ll need to clear on your path to growth, even as the regulatory landscape evolves.

Comprehensive Services

A PEO that offers a broad spectrum of services can provide more value than one focused solely on payroll. StaffMarket helps your company find the best fit PEOs that integrate payroll processing with HR management, benefits administration, workers’ compensation insurance, and risk management services. This approach simplifies administrative tasks and ensures a seamless integration of payroll with other critical business functions.

Forward-Thinking Technological Solutions

In today’s tech-driven economy, having access to user-friendly payroll software is important. A PEO will offer robust payroll software that streamlines end-to-end payroll processing, from employee administration to reporting.

Mobile access is another must-have for round-the-clock payroll management and processing. Access to software from your phone, tablet, or desktop means having the flexibility to manage payroll operations — and put out fires — anytime, anywhere.

Personalized Consulting with Responsive Customer Service

A one-size-fits-all approach rarely covers all bases, especially for small businesses with complex or unique requirements. We will help evaluate PEOs that work with you to understand your business and offers customized solutions tailored to your business needs. StaffMarket will facilitate that dynamic. The availability of personalized consultants, including payroll specialists and a responsive customer service team, will significantly enhance your experience.

A Track Record of Success

We will help you find a PEO that has been around for a significant amount of time with a proven history of success with businesses in a variety of industries, and provide client testimonials and case studies that back it up. A stellar track record of success will give you the confidence and peace of mind that comes with knowing your HR and payroll services are always in good hands.

Flexibility and Scalability

Your payroll needs today won’t be the same payroll needs you have a year, or even five years, from now. Choosing a PEO that can scale its services to match your growth trajectory means not having to re-evaluate your payroll management strategy every 6 months.

Whether you’re expanding your workforce or entering new markets, flexible and scalable payroll solutions can adapt to your changing requirements, ensuring uninterrupted service and support.

A PEO Can Be Your Employee Payroll Partner in Growth

The perfect PEO partner should understand your business’s unique requirements. Evaluate potential partners against your needs, and select a PEO that is a testament to excellence and personalized service.

A PEO will understand the unique challenges small and medium-sized businesses face in managing employee payroll and HR across a wide variety of industries. PEOs have provided comprehensive, tailored solutions for businesses across the country for decades.

A PEO will provide consultative services for your specific business challenges, and will ensure that your employee payroll management processes are accurate and complete.

A new study by Bassi and Associates (commissioned by NAPEO members) reveals the following:

PEO Industry Growth

• 907 PEOs are now operating in the USA.
• PEOs managed $176 billion in employment related wages for their 174,545 business clients. Those PEO clients represent 12% of all USA private sector employment for businesses with 10 to 99 workers and 2.4% of all civilian employment.
• The number of worksite employees covered by PEOs grew at a compounded annual rate of 8.3%

Why the Growth in Professional Employer Organizations?

The overall USA economy is on improved growth track and the awareness of the value of joining a PEO is growing among knowledgeable business owners and managers. With over 900 PEOs operating in America, quickly finding the right PEO for the right price can be a challenge. Let StaffMarket help make your company’s search easy.

Removing the Red Tape

If you want the bull to run, remove the red tape

“These nuisance fees created unnecessary red tape and placed an undue burden on businesses, while at the same time resulted in no significant revenues for the state,” Cuomo said in the announcement. “This action will eliminate unnecessary costs and paperwork, helping to allow these businesses to reinvest and grow in New York.”

New York PEO Fees being reduced

Included in the fees be reduced are two fees pertaining to PEOs operating in the state of New York

1. Professional Employer Organization Exemption Fee: A $250 annual fee to professional employer organizations that are already licensed in another state. The professional employer organization must have no office and less than 25 employees in New York to qualify for an exemption.
2. Professional Employer Organization Initial Registration and Renewal Fees: A $1,000 initial registration fee to professional employer organizations to allow the leasing of employees to businesses in New York. An additional $500 renewal fee is charged annually.

While the fee reductions may not be considered significant, it will provide more encouragement for PEOs with operations primarily in other states to enter the New York markets. Long known as one of the highest taxed states in the USA, New York appears to be making efforts to change its image as a red tape and taxation jungle.  That’s a good thing.

image courtesy of enkl22 @ flickr.

From Page 68 of the Department of the Treasury – Budget in Brief:

Address Impact of ACA Statutory Requirements +$67,206,000 / +483 FTE

“As the tax law changes, the IRS must implement programs to ensure that taxpayers understand the new laws, and that the IRS can address noncompliance. The new ACA tax provisions strengthen oversight of tax exempt hospital organizations and include new fees on manufacturers and importers of branded prescription drugs and health insurers. This initiative also expands the compliance coverage of tax-exempt hospital organizations by refining the community benefit reviews and by leveraging this data to conduct examinations; expands coverage of new provisions related to the premium tax credit, individual responsibility requirement, and large employer insurance; and addresses new audit requirements related to the shared employer responsibility payment. This initiative includes a $60.8 million initial investment in traditional revenue-producing activities that are expected to annually produce additional enforcement revenue of $181.7 million, once the new hires reach full potential in FY 2018, an ROI of $2.8 to $1, and an initial investment of $6.4 million in revenue-protecting activities that are expected to protect $88.7 million of revenue, a protected ROI of $12.2 to $1.”

The Congressional Budget Office (CBO) estimates that employer shared responsibility penalties will produce $8 billion in 2016 (relating to 2015 penalties). From 2016-2024, the CBO estimates that penalty payments will total $139 billion.

ACA Compliance and the shared responsibility payments for employers are here for employers who meet or exceed the employee count size thresholds. Navigating compliance with the ACA is a challenge for business owners and managers and Professional Employer Organizations are uniquely positioned help businesses ensure successful ACA compliance and the avoidance of audits and non-compliance penalties. StaffMarket is the national marketplace for the Professional Employer Organization industry and will help you find the right PEO for your company.

Hawaii – Legislation Regarding PEO Fees Moves through the Legislature
Senate Bill 2544 continues through the legislature in Hawaii. The bill will establish a sliding scale based on the number of covered employees (in HI) reported to the Department of Labor and Industrial Relations. As amended, the bill would increase the renewal fee due every two years from a $750 flat fee to a sliding scale:

• Less than 50 covered employees      $2,000
• 50 – 250 covered employees            $3,000
• 251 – 500 covered employees           $5,000
• 501 or more covered employees       $7,000

If enacted, the bill would become effective on July 1, 2091. – Seventy five years from now. That should be enough time for PEOs to financial plan for the expense!

Nevada –Implementation of Assembly Bill 389
The Nevada Department of Employment, Training and Rehabilitation (DETR) announced that the U.S. Department of Labor (DOL) has approved its plan to issue credits on 2015 4th quarter SUTA overpayments and will provide affected employers with a newly developed “Statement to Correct” form to be completed and returned to DETR in order to process the appropriate future account credits for the 4th quarter of 2015. As we have previously reported, DETR informed NAPEO that it would implement AB 389 as of the law’s effective date of October 1, 2015. DETR also stated that it would issue credits in the amount of those 4th quarter SUTA payments after receiving approval from the U.S. Department of Labor (DOL) of its plan to issue credits. Any PEO operating in Nevada should contact the DETR for instructions about applying for the credit.

New Jersey –Paid Sick Leave for workers – Bill moves though Legislature
Legislation that would require employers in New Jersey to provide employees with paid sick leave benefits is progressing through the New Jersey Senate. Senate Bill 799, will require employers to grant workers one hour of paid sick leave for every 30 hours worked (or about nine days a year. Last week, the bill was amended to provide that an employer would be in compliance with the bill in circumstances where such employer offers paid time off. Workers at businesses with fewer than 10 employees would be able to accrue up to 40 hours of sick time that could be carried over from one year to the next. Employers with 10 or more workers would be required to allow them to accrue and carry over up to 72 hours of sick leave.

New Orleans, Louisiana – requires stand alone work comp policies  
On March 15, 2016 NAPEOs Mid-South Leadership Council Forum (LCF) was held at the Hotel Monteleone in New Orleans, Louisiana. Attendees were able to discuss a recent letter from the Louisiana State Licensing Board for Contractors (LSLBC) and its refusal to allow PEOs to provide evidence of workers’ compensation coverage on behalf of its clients. Those in attendance also heard presentations on the political environment in Louisiana and recent employment law developments. Additionally, there was a discussion on the issues affecting PEOs within the Mid-South Region including: introducing the NAPEO Model Act in Mississippi in 2017 and forming a Louisiana working group to update the state’s PEO statute. PEOs operating in Louisiana should be advised.

West Virginia – PEO Bill Passes House and Senate in West Virginia
On Saturday, March 12, 2016, Senate Bill 465 passed the West Virginia House and moved to the Governor’s desk, having passed the Senate last month. The bill allows PEOs operating in West Virginia to sponsor health benefit plans as a single employer plan with all covered employees considered employees of the PEO. In addition, if a PEO wants to self-insure for purposes of health, the bill would allow this through a captive insurance company. The House version passed with the inclusion of an amendment that would authorize the insurance commissioner to promulgate and adopt rules with respect to WV PEOs sponsoring health benefit plans.

View the story here.

Progressive handles payroll, workers’ compensation, employee benefits and human resource services for a variety of businesses, mostly companies with five to 25 employees. The firm had $74 million in revenues in 2013, up 8.8% from 2012, when it had $68 million.

Burgess says the firm’s clients are “blue collar and gray collar, with a smattering of white collar.” That covers construction, hospitality and service sectors. Progressive’s geographic targets stretch from Florida to the Carolinas to Texas, and most of the states in between. The firm, in total, oversees around 40,000 worksite employees — a figure Burgess would like to see hit 75,000 by 2019.

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Small Businesses Using a PEO Are Growing

While the overall environment for small businesses remains challenging, a new study commissioned by the National Association of Professional Employer Organizations (NAPEO) shows that small businesses using a PEO are growing. The increasingly burdensome tasks of meeting tax and regulatory compliance may be a factor hindering small business growth. But, this study shows that businesses who outsource those non-revenue producing compliance tasks to a PEO have reduced both their costs and risks. Those businesses are growing.

Highlights from the September 2013 NAPEO Study

Key stats in the study show that PEO clients:

• Have grown 9 percent faster than small businesses in general since 2010
• Save at least 21% on HR administration costs
• With 10 to 50 employees are over twice as likely to have workers in a retirement plan
• With less than 10 employees are over three times as likely to have workers in a retirement plan


View the study demonstrating that joining a PEO improves business survival rates.

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