Buyers Guide for PEO - Professional Employer Organization Services

Fundamental PEO Services

Now that you understand the PEO concept, let's review specific value added services commonly delivered by a PEO.

Safety and Risk Management

Depending on the type of work you do, workers’ compensation insurance coverage can be difficult to obtain and/or a significant expense. Since a PEO can cover your employees under their master work comp policy, they are motivated to keep work comp costs in check. For a PEO, lots of employee claims can cause a high insurance premium, which in turn causes them to have an uncompetitive marketplace offering. To keep costs in check a PEO will:

  • Assist your company with implementing or improving a safety program
  • Work to ensure that any claims are resolved quickly and effectively
  • Annually shop the insurance markets for the best coverage values

A PEO is a motivated partner in improving workplace safety and keeping claims in check.

Finding a PEO that can cover the worker’s compensation risks can sometimes be challenging since each PEO has some risk types they cannot allow. StaffMarket has profiled the allowable risk types for hundreds of PEOs and can focus your search on the PEOs that will accept your type of workers.

Payroll Processing and Tax Remittance

Payroll administration is a basic function of a PEO and the one most commonly associated with an employee leasing company. This includes variety of payment methods, including payroll check, direct deposit and, in some cases, debit card arrangements. Payroll input methods include phone, fax and the Internet. PEOs support hourly, salary, commissioned tipped and piece-work payment based employees. PEOs provide tax reporting and compliance and filing local, state and federal government paperwork (W2s, W4s, FICA, etc). PEOs also ensure that all court ordered payments and garnishments are collected and remitted to the appropriate authority. In addition a PEO will ensure that all payroll deductions for insurance or benefits will get the appropriate tax treatment (section 125 pretax) if eligible.

Employee Benefits and Plan Administration

PEO companies can offer employee benefits plans that cover the spectrum of coverage types. Plans are available for HMO and PPO health insurance plans. In addition plans are available for supplemental insurance like vision, long term disability, short term disability and life insurance. Also programs are available for 401K, Flexible Spending Accounts (FSA) and Health Savings Accounts (HSA). Using a PEO can quickly enable your company to get competitive pricing for health insurance and employee benefits.

Human Resources – HR Administration

A PEO will help ensure that your company is compliant with the myriad of rules and regulations related to Human Resources. HR Administration with a PEO ensures that basics like employee handbooks and labor-law posters are in place at your company. A PEO acts as your off-site HR department, offering consultation in the areas of sexual harassment, employment discrimination, FMLA (Family Medical Leave Act), hiring and firing practices and a number of other areas.

<<< Introduction to PEO Services | Kinds of PEO Clients >>>

Could a PEO benefit your company? Start your search now.