Under a Professional Employer Organization (PEO) arrangement, your company enters into a co-employment relationship with your chosen PEO. This relationship allows your PEO to act as the “Employer of Record” for your employees, facilitating shared liability with your PEO on matters associated with being an employer and giving your PEO full authority to perform administrative and other tasks on your behalf and process all employee-related taxes under its federal tax ID number.
Your PEO is then able to leverage the buying power it garners as the “Employer of Record” for your employees and the employees of its other clients in order to acquire workers’ compensation insurance, group health insurance and other benefits and services and provide them at a much lower rate than you could access on your own. In addition to delivering discounted benefit rates, your PEO will also handle the administration of tasks and procedures associated with HR compliance, payroll administration, employee benefits and workplace safety.
When you outsource HR to a PEO, you don’t just get another vendor – you gain an entire team of HR professionals. With decades of combined HR expertise and know-how, you’ll have access to a wide variety of specialists across the HR industry.
Not only will you be connected to a wealth of human resources knowledge, you’ll also be connected to technology and software that can be tailored to your business’ needs. Time and attendance software, online benefits management and e-learning programs just scratch the surface of the applications an outsourcing company can provide.
If providing workers’ compensation, health care, unemployment costs and other HR needs is becoming increasingly difficult for your company, a PEO may be the answer for you.
The cost of HR and benefits is increasing every year, and companies can find it favorable to use a co-employer approach because it allows them to provide better benefits at a price they can afford. With the ever-changing state and federal regulations being passed, companies are finding that they don’t have the resources to keep up with those changes. Hiring a PEO that is an expert in dealing with these changes and is designed to help keep your business compliant is increasingly attractive to business owners.
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