Businesses would want use a PEO to focus on their main affairs (i.e. revenue and administration) rather than employment. Tragically, most enterprises lack adequate human resource training, payroll and accounting skills, knowledge of regulatory compliance, backgrounds in risk management, insurance, and employee benefit programs. PEOs give small-scale markets access to many benefits and employment amenities such as 401(k) plans; health, dental, life, and other insurance; dependent care; and other benefits.

How many businesses use a PEO?

How many businesses use a PEO?

The professional employer organization enables parton companies to lower costs and increase savings. This is expedited by providing critical assistance with employer compliance, which helps protect the client against liability, and handling other redundant tasks. Moreover, PEOs handles taxes, employment laws and regulations.

Approximately 180,000 small and mid-size businesses use PEOs.

A PEO share employer responsibilities with their clients, meaning they contractually assume certain responsibilities and risks associated with managing employees. This gives them “skin in the game” and makes them as invested in your compliance, profitability and success as you are.

A PEO can alleviate the encumbrances associated with employment while giving patrons a competitive lead. This is especially true when recruiting top employees, mitigating risk, and enhancing business efficiency. The likes of which can drive growth and improve profits.

With over 600 PEO companies in the United States, it is important to choose your PEO partner wisely. It is imperative to look for the following:

• A proven track record
• Reliable expertise
• Excellent customer service:
• Security and stability

A co-employment relationship is one that a PEO and patron company share responsibilities. The employer maintains control of the business and is in charge of all business matters—supervision and staffing. The PEO handles the time-consuming administrative tasks associated with the employment relationship.

PEOs working on a co-employment share responsibilities with patron companies. These responsibilities reduce legal risks and financial exposure for clients. Human Resources Outsourcing (HRO) companies are not employers, and therefore, leave patrons open to increased legal risk and financial exposure.

The Professional Employer Organization (PEO), as the primary administrator, can assist with many facets such as regulation, expert guidance, payroll, medical compliances and disclosures, determination of company size under ACA parameters, etc.

PEO/co-employment facilitates for employees to be included in insurance plans like group workers’ compensation insurance. Interestingly enough, a small- or medium-sized business can spread risk over a larger pool. This is due to said sized PEOs lacking the economic power to access cost-effective workers’ compensation insurance without an effective managed larger group.

A PEO/co-employment permits employees to be included in a Large Group Employment Practices Liability Insurance Policy. This policy protects patrons from worksite employee lawsuits. These can include ant not limited to: discrimination, wrongful termination, and or harassment. The HRO model is far more expensive for patrons because they must obtain their own coverage as a small business which policy premium costs and deductibles.

Employee leasing are advantageous to business owners who want to focus their attention on enterprise ventures not on tedious employment tasks like payroll, benefits, HR issues, risk management, et cetera. Employee leasing is most beneficial to small- and medium-sized companies that do not have separate departments to handle said functions independently of administration.