What is a PEO Service?
Managing a small or mid-sized business can be a challenging task. You may find yourself dealing with administrative duties more often than you’d like, including payroll administration, tax payment, and keeping up with changing legal requirements related to insurance and employment. These tasks can take up a significant amount of your time, leaving you with little time to focus on the growth and success of your business.
If you’re wondering what a Professional Employer Organization (PEO) is, it’s an organization that can help you manage these tasks so that you can concentrate on growing your business. By providing competitive benefits, PEOs can help your company attract and retain top talent.
How Does A Professional Employee Organization Work?
A Professional Employer Organization (PEO) is a company that small and medium-sized businesses (SMBs) can partner with to manage employment liability and provide better benefits to their employees. PEOs can also handle human resource services, including workers’ compensation, benefits, payroll administration, and employment taxes.
When a client company partners with a PEO, they enter into a co-employment contract called a client service agreement (CSA). The CSA establishes a relationship between the PEO and the client’s employees, and outlines the responsibilities, rights, and risks of both parties.
Under the CSA:
- The PEO handles administrative employer duties, while the business owner manages worksite employer responsibilities.
- The PEO manages employee benefits, wages, and with holdings and handles tax remittance under its own tax ID.
- The client retains complete control over the company and makes decisions regarding hiring, management, and firing.
- The client handles non-employee-related tasks, such as customer service, sales, and marketing.
- The PEO and the client may share some responsibilities, as specified in the CSA.
Using a PEO is beneficial because it allows a company to use economies of scale to provide better benefits and outsource administrative tasks. This is especially helpful for businesses that do not have an HR team or have a small HR team that is overwhelmed. By shifting administrative tasks to the PEO, the company can focus on growing the business. Additionally, a PEO can negotiate better health benefits for employees at a lower rate than a company could without a PEO.
What Does A PEO Do For You?
Payroll & Tax Management
A PEO can provide HR solutions that help you comply with labor and employment laws, and stay competitive. They offer consultation in areas such as employee relations, sexual harassment, hiring and firing practices, employment handbook development, background checks, drug testing, and more.
Worker Comp Insurance
A PEO is a partner that can help keep your business compliant and improve workplace safety. They offer you Workers’ Compensation insurance at a discounted group rate and handle all claims processing and management. By working with a PEO, you can reduce risks and quickly resolve any claims.
Health Care Benefits
By entering into a co-employment relationship with a PEO, a business can access better quality and more affordable health care coverage for its employees.
Human Resources
A PEO can provide HR solutions that help you comply with labor and employment laws, and stay competitive. They offer consultation in areas such as employee relations, sexual harassment, hiring and firing practices, employment handbook development, background checks, drug testing, and more.
Why Choose A PEO
By partnering with a PEO, you can enjoy many benefits for your company, including:
Employee Benefit Optimization
Small and medium-sized businesses often struggle to keep their best employees when they can’t offer competitive salaries or benefits. One solution is partnering with a PEO. This levels the playing field for recruitment and allows you to attract high-quality talent. For example, you can offer Fortune 500-level benefits and health insurance, which can help broaden your recruiting network and reduce employee turnover.
Profit Optimization
A Professional Employer Organization (PEO) can manage your company’s HR functions more affordably than hiring an in-house HR team. PEOs have HR specialists that use existing systems to efficiently perform administrative tasks. Since PEOs co-employ workers from multiple companies, they are able to negotiate better insurance rates. PEOs can help to reduce employment costs and increase your profits by providing economies of scale.
Amplify Business Impact
If you’re a business owner, you know that dealing with HR tasks can take up a lot of your time and distract you from your main responsibilities. This can slow down the growth of your business. However, if you work with a PEO, you can offload administrative duties and focus more on core business activities. Your PEO should provide you with experts in payroll, benefits, HR, and compliance, so you can rest assured that all your needs are met. This way, you have more time to focus on growing your business.
What CPA’s Say About PEO’s — https://www.peocompare.com/reasons-cpas-want-peos/
Minimize Uncertainty
As a small or medium-sized business, it can be tough to keep up with all the local, state, and federal compliance regulations related to taxes, benefits, hiring, and employee-related claims. It’s important to avoid any missteps, but it can be overwhelming to stay up-to-date.
A PEO can help you avoid costly fines that arise when regulations are misunderstood or overlooked. They have more resources to help your company stay compliant with the ever-changing laws. Additionally, employee liability shifts to the PEO, providing you with peace of mind.
What AB Personnel Can Do For You
AB Personnel is a professional employer organization (PEO) based in Riverside, California that specializes in providing comprehensive human resources solutions to small and midsize businesses. Our range of services includes payroll and payroll tax management, employee benefits, workers’ compensation, and compliance management. By partnering with AB Personnel, business owners can reduce administrative burdens and free up valuable time to focus on core business functions. Our experts have extensive knowledge and experience in the industry, and we are committed to delivering customized solutions tailored to meet the unique needs of each client. To learn more about how AB Personnel can help your business and employees thrive, feel free to get in touch with us today.