A PEO, or Professional Employer Organization, is a company that provides human resources (HR) and payroll services to small and medium-sized businesses (SMBs). PEOs take on the administrative responsibilities of HR, such as hiring, firing, benefits administration, and payroll, so that SMBs can focus on their core business activities.
Here are some of the common PEO services:
- Payroll: PEOs can handle your payroll administration, including calculating and issuing paychecks, withholding taxes, and submitting payroll reports.
- Benefits administration: PEOs can help you choose the right benefits for your employees and manage the administration of those benefits. This can include health insurance, dental insurance, vision insurance, life insurance, disability insurance, and retirement plans.
- Workers’ compensation: PEOs can help you comply with workers’ compensation laws and file claims if necessary.
- Healthcare compliance: PEOs can help you comply with healthcare laws, such as the Affordable Care Act.
- FMLA administration: PEOs can help you comply with the Family and Medical Leave Act (FMLA).
- Training and development: PEOs can help you develop training programs for your employees.
- Employee relations: PEOs can help you resolve employee relations issues, such as conflicts between employees or complaints about workplace harassment.
- Hiring and onboarding: PEOs can help you find qualified employees, onboard them to your company, and manage their paperwork.
- Risk management: PEOs can help you assess and manage your business risks, such as the risk of lawsuits or the risk of employee theft.
- Compliance: PEOs can help you stay compliant with all applicable laws and regulations, such as employment law, labor law, and tax law.
PEO services can benefit SMBs in a number of ways, including:
- Reduced HR costs: PEOs can save SMBs money on HR costs by negotiating lower group rates for benefits and by handling payroll administration.
- Improved HR compliance: PEOs ensure that SMBs are compliant with all applicable HR laws and regulations. This can help to protect the business from costly lawsuits.
- Increased employee productivity: PEOs can help SMBs improve employee productivity by providing HR services that free up managers’ time. This can allow managers to focus on running the business.
- Reduced risk: PEOs can help SMBs reduce their risk of HR-related lawsuits by providing expert advice and guidance.
If you are an SMB owner, you should consider whether PEO services are right for your business. There are many different PEOs available, so it is important to compare different providers before making a decision.
Here are some things to consider when choosing a PEO:
- The services offered: Make sure the PEO offers the services you need.
- The cost: Get quotes from different PEOs to compare the cost of their services.
- The reputation: Check the PEO’s reputation with other businesses.
- The level of service: Make sure the PEO will provide the level of service you need.
If you are considering using a PEO, it is important to do your research and compare different providers. You should also make sure that the PEO you choose is a good fit for your business and your employees.