When businesses partner with a Professional Employer Organization (PEO), they gain the benefits of comprehensive HR resources to manage and mitigate risk, lower rates on workers’ compensation insurance, and relief from many of the administrative burdens of payroll and benefits administration. Employees enjoy convenient payroll options, mobile-friendly technology tools, and affordable benefits and discounts.
1. Deep HR Resources
Federal, state and local regulations related to HR are more voluminous and complex than ever. Most businesses don’t have the staff for the in-depth subject matter expertise needed to adequately navigate wage and hour regulations and ensure compliance with the full range of employment and tax laws. When small and mid-sized businesses work with a PEO, they get a team of compliance experts who stay current with all the rules and regulations that apply to employers.
A PEO also helps manage HR risk by helping clients:
- Create an employee handbook to include anti-discrimination and harassment policies
- Familiarize themselves with wage and hour laws
- Pay employees in accordance with the law
- Pay employees in a timely manner
2. Relief from Some Employer Responsibilities
A PEO’s payroll services include processing even the most complex payrolls such as certified, multi-state, and payrolls organized to track job costs. The payroll team takes care of wage garnishments, withholdings, and tax withholding and filing so all clients have to do is complete the employee application process and track and enter employee hours. Technology tools make it easy for employers to onboard new employees and facilitate the approval of paid time off.
PEOs save the time it would take to develop an employee benefits program by offering clients a variety of packages. Joining the PEO’s master health plan or adopting any other available package is fast and easy. PEOs can even administer plans business owners may already have in place.
3. Affordable Workers’ Compensation Insurance
PEOs help businesses secure competitive rates for workers’ compensation insurance. That can sometimes be challenging for start-up companies, companies with past losses or those with high-risk jobs. PEOs have flexible workers’ compensation programs with more affordable rates than stand-alone policies and staff who help manage the cost of claims, coordinate return-to-work programs and recommend safety training.
4. Convenient Payroll Options
PEOs make it easy to pay employees with pay options like checks, direct deposit and pay cards. Some businesses still prefer paper checks, so PEOs print checks for employers to distribute, or can facilitate onsite check printing. Direct deposit allows employers to pay employees quickly and eliminates the need to print, deliver or mail checks. PEOs also offer pay cards, an option for employees who don’t have bank accounts and/or don’t want to share banking information with their employers.
5. Mobile Technology Tools
PEOs provide clients with an online human resource information system (HRIS) for easy access to employee records, time entry interfaces, benefits open enrollment sessions and reporting tools. Employers or administrators can enter payroll hours in the HRIS each pay period or rely on common integrations with time clock systems.
Employers use the HRIS to:
- Approve PTO requests
- Create or edit employee records
- Hire or terminate employees
- Manage performance reviews and corrective action
- Access forms and resources
- Compile standard and advanced reports
Employees use the HRIS to:
- Manage personal information and direct deposit preferences
- View and print W-2s or pay stubs
- Request time off
- View benefits and discount programs
- View employer HR forms
6. Affordable Benefits
PEO clients are able to offer their employees a comprehensive employee benefits package that includes retirement savings options, which helps attract and retain employees. PEO master policies are able to extend an affordable, flexible benefits package with options from top carriers. Employers can offer retirement savings with no out-of-pocket costs or elect to match a portion of employee contributions.
PEOs administer benefit plans by enrolling and removing employees when necessary and answering any questions they might have. Benefits management includes taking care of life change updates like marriages or new family members, assisting with tax and regulatory reporting and ensuring the appropriate pre-tax deductions from employee paychecks.
To learn more about how a PEO can benefit both employers and employees, call 800-277-1620.