Top 5 misconceptions about PEO’s…
…and the truth to each:
- Loss of Control over the business and employees when using a PEO.
- In a PEO relationship, the client forms a co-employment relationship with the PEO in which the PEO becomes the administrative employer, or the employer of record, for tax and insurance purposes using their own FEIN, and the client remains the worksite employer. As the employer of record, the PEO is responsible for the payment of wages, management of workers’ compensation claims, regulatory paperwork, and compliance issues. The PEO is also responsible for a variety of other administrative duties involving the employees, and may provide the client and/or its worksite employees with additional insurance and benefit plans. The PEO may offer consulting on HR needs such as proper disciplinary actions and termination of employees, but the client remains responsible for directing and controlling the daily activities of the worksite employees. The client is also responsible for maintaining a safe work environment and keeping track of actual hours worked and reporting those hours to the PEO for payroll processing.
- PEOs only look after HR management.
- A PEO is a Professional Employer Organization to which companies outsource a majority of their HR functions, i.e. payroll, benefits, workers’ compensation, tax administration, etc. By outsourcing these needs to the PEO, companies are freeing up time to dedicate to the nuts and bolts of their business.
- The PEO becomes the Company’s new partner in the business.
- The PEO is legally a vendor. However, HR Strategies really goes above and beyond to take those extra steps to manage our client’s HR responsibilities. We work alongside our clients, rather than just doing the minimum of what is required to offer regulatory compliance, workers’ compensation administration, employee benefits, and payroll. Therefore, we act more as a partner to our clients, and because we are a smaller business, we are able to customize solutions for each individual client.
- A PEO will tell me how to handle MY employees.
- The PEO may offer consulting on HR needs such as proper disciplinary actions and termination of employees, but the client remains responsible for directing and controlling the daily activities of the worksite employees.
- Our employees will not embrace the new arrangement.
- The three main advantages to using a PEO are: efficiency, lower administrative costs, and improved employee benefit options. As a business these three advantages mean better productivity, morale, and increased revenue! When your employees are receiving better benefits and skilled professionals to assist them, morale increases, and therefore productivity increases!
Outsourcing your HR needs frees key personnel from the paperwork and complex issues of HR administration, therefore allowing your employees to focus on generating income. Businesses of every industry and any size can find HR Strategies helpful in allowing their company to run more smoothly. Contact us today for a free needs analysis! 770-339-0000.