What is a PEO?

Very few small or medium sized business owners can afford a full time staff that consists of an accountant, an attorney, a human resource expert, a risk manager, a benefits manager, an information manager and a technology services expert. A Professional Employer Organization or more simply a "PEO", provides this expertise via an outsourced relationship, facilitated through a shared or co-employment agreement.

A PEO relieves a business owner of much of the daily burden of being an employer. They provide integrated services which more cost effectively manage non-core business processes including such complicated minutia as payroll, benefits, employer liability management, employment taxes, workers compensation, government compliance, personnel matters, hiring and firing, and more.

PEOs are the fastest growing segment of the alternative employment sector, formerly known as employee leasing companies. PEOs assume many of the legal and risk related responsibilities of a business which allows the business owner to concentrate on the profitability and growth of their business, without the worry of the distractions and challenges associated with the "business of employment".

How does a PEO work?

Shared responsibility is the key to understanding the relationship between a Professional Employer Organization (PEO) and a business owner client. A PEO assumes much of the liability of a business' employment by contractually becoming a "co-employer" of the workers (the employees) of the business owner client.

Under this co-employment agreement, employees of a company using a PEO have two employers:

1. The employer of record (the PEO) who administrates the "paperwork" side of the workers' employment including payroll (meaning proper withholding, remittance and recording of employees' FICA, FUTA, SUTA and other federal, state and local taxes), workers compensation, health insurance, unemployment insurance management and compliance with workplace rules and regulations imposed by federal, state and local governments. In addition, PEOs may provide consultation on the recruiting, hiring and termination of work site employees, and on other human resource related issues. These functions and services are offered to client companies at cost savings available through economies of scale. Many PEOs offer employee orientations, customized employee manuals and provide a full service internal customer service center to answer employee questions on pay, vacation, and health and insurance programs and claims.

2. The worksite employer (the business owner) who trains, assigns, directs, reviews performance and promotes employees. It's the worksite employer's business in which the employee is actually engaged as a worker. The work site employer sets the actual work routines and derives all the benefits of the employee's labor, while outsourcing the entire administrative and human resource function of its business to the PEO. This allows the work site employer to concentrate full attention on its core business activities. 

PEOs offer business owners professional relief from the burdens of complying with the many work place rules that federal and state governments require. The PEO industry is the small and medium sized business owner's answer to HR related headaches.

Curing your employment related headaches

Through Business Benefits Solutions Network's strategic partners, B² can facilitate a PEO services relationship that will let someone else assume those parts of the employer role that are non-productive, time consuming and risk adverse. You retain control of your business and continue to direct and supervise your workers, but you'll eliminate the headache that business owners complain about the most - that being - how to be the boss in the face of all the government red tape and non-revenue generating paperwork.

At Business Benefits Solutions Network, we can point you to the aspirin bottle. 

At Business Benefits Solutions Network we help you understand, manage and implement your business processes, and get the most value from them.  In short, we help you succeed. For more information on any of our services, please contact us or call 866-853-4040.