If you are a small business, you may be in dire need of a professional employer organization!
A professional employer organization, otherwise known as a PEO, is a company that partners with small and medium-sized businesses as a co-employer. PEOs help these businesses manage administrative functions like worker’s compensation, payroll, human resources services, management of benefits, and more. Because small to medium-sized businesses often do not have the manpower, experience, or resources to manage these functions by themselves the way that large corporations do, partnering with PEOs is usually a heaven-sent.
To prove to you how beneficial partnering with a professional employer organization can be on your business, we are giving you details about all the ways PEOs can provide you with economies of scale.
Get ready to have the best worker’s compensation and other insurance/benefits administrations of a company your size!
Professional Employer Organization Service #1: Benefits Administration
There are many components to deal with when administering benefits to employees. You must first figure out what major insurance benefits you can afford. The major insurance benefits employees expect from their employer include health insurance, dental insurance, vision insurance, and more.
Usually when you are a small to medium-sized business, the costs of administering all these benefits are too great for your company to handle. Thus, small to medium-sized companies often do not supply their employees with one or more of these major insurance coverages.
Even if small to medium-sized businesses do offer all these insurance benefits, they usually cannot afford to offer them with good coverage at affordable premiums. Managing aspects of benefits administration such as benefits onboarding, claims, and excessive paperwork can also be hard for small to medium-sized businesses to handle.
A professional employer organization (PEO) can help your small to medium-sized business manage benefits administration functions by retrieving quality medical, dental, vision, and other forms of benefits insurance for your employees at affordable rates. PEOs can do this by combining all their clients’ company employees together under one employer identification number. In doing this, all the companies that the PEOs service can access benefits usually only reserved for larger corporations.
On top of administering quality benefits insurance packages, PEOs can help your business manage benefits related administrative tasks. For example, PEOs can enroll employees for benefits and provide legal benefits notifications. PEOs can also deal with benefits claims, negotiate with carriers, and file all necessary benefits-related paperwork for your business.
PEO Service #2: Payroll Administration
Payroll is the dealing of paying employees their due wages. Payroll can get complicated when you have to simultaneously deal with direct deposits, one-off payments, payroll logs and paperwork, complying with payroll laws for employees in other states, payroll processing fees, and more.
To help your small to medium-sized business manage everything payroll related, partner with a professional employer organization. To make dealing with payroll even easier on your business, partner with a PEO with straight-forward payroll service fees rather than separate payroll service fees.
PEO Service #3: Compliance Support
There are many laws and regulations that you must comply with as a business. These laws and regulations deal with everything from worker’s compensation, to payroll, to federal and state taxes, and more.
If you do not comply with all these laws and regulations, you can get charged with massive fees or get sued. To ensure that your small to medium-sized business does not receive unnecessary charges or lawsuits, PEOs will provide you with an HR professional team that specializes in corporate compliance.
PEO Service #4: Worker’s Compensation Administration
Dealing with worker’s compensation as an employer is time-consuming and costly. As a co-employer, a professional employer organization can relieve these stresses by providing its own worker’s compensation insurance program to your business’s employees.
PEOs can also help your business manage its worker’s compensation by handling all the worker’s comp. paperwork, certifications, audits, and compliance regulations. To help minimize risk, many PEOs also provide its clients with a team of worker’s compensation specialists.
Worker’s compensation Florida is mandatory for all the state’s employers. To immune employers of injury lawsuits, Florida’s worker’s compensation is given to all state employees that suffer from occupational injuries, regardless of fault.
PEO Service #5: Recruiting and Hiring
To save your small to medium-sized business employees even more time and money, a professional employer organization can recruit and hire for you. That means that the PEO company will interview candidates, perform background checks, and conduct any other recruiting and hiring tasks. That way your business’s HR team can focus its energy on other day to day HR tasks.
PEO Service #6: Employment Practices Liability Insurance
Employment Practices Liability Insurance (EPLI) provides coverage for claims that former and current employees may make of discrimination, wrongful termination, harassment, and other issues. Contract-based claims and claims of bodily injury and property damage are not covered by Employment Practices Liability Insurance. Other claims not covered by EPLI include that of the Fair Labor Standards Act (FLSA), National Labors Relations Act (NLRA), Worker Adjustment and Retraining Notification Act (WARN), Occupational Safety and Health Act (OSHA), Consolidated Omnibus Budget Reconciliation Act (COBRA), state unemployment insurance, and worker’s compensation statutes.
PEO Service #7: Unemployment Insurance
Unemployment insurance is separated into two categories, federal and state. State Unemployment Insurance protects terminated employees and subsidizes the employees’ income while they find another job.
Federal unemployment insurance benefits are withheld under the Federal Unemployment Tax Act (FUTA). State Unemployment Insurance is required at both the federal and state level as a business grows.
Because federal and state unemployment insurance adds up, having a PEO company to help manage unemployment insurance filings is beneficial to any business.
PEO Service #8: Retirement and Wellness Packages
Some PEO companies provide their clients’ employees with 401(k) plans. These PEO companies will even manage 401(k) administrative and regulatory tasks for their clients.
For example, some PEO companies will manage 401(k) compliance testing, distribution processing, and required notices. These PEO companies will even provide your employees with retirement education materials and services.
Some PEO companies will even provide their clients’ employees with wellness packages that include things like gym memberships.
PEO Service #9: Drug Testing Programs
Many employers administer drug testing to new employees to ensure that they are drug-free and employable. If your small to medium-sized business needs help managing new employee drug testing, some PEOs even provide drug testing programs as one of their services.
PEO Service #10: Family and Medical Leave Act Administration
The Family and Medical Leave Act (FMLA) allows employees to take unpaid, job-protected leave from work for family and medical reasons. Employees of companies that have FMLA coverage can take family and medical leave from work with their regular continued group health insurance coverage. Some PEO companies provide FMLA administration to its clients’ employees.
Certified Professional Employer Organizations
If you want to ensure that your PEO has top quality services, partner with a PEO that is a certified professional employer organization (CPEO). CPEOs are PEOs that provide the IRS with audited financial statements and meet the IRS’s strict standards to be a CPEO.
Partnering with a CPEO allows you to retain specified tax credits while the CPEO solely pays for all federal employment taxes on wages paid to worksite employees. CPEOs also provide a multitude of other services on top of the standard ones that regular PEOs provide.
To learn more about how CPEOs can help better manage worker’s compensation, contact us here.