In today's competitive economy, businesses are looking at ways to gain a competitive edge. Outsourcing non-revenue activities is something that most businesses are taking a close look at. Human Resource Administration and Payroll hold the "honor" of being non-revenue producing and a risky element of the business.
A PEO serves as an extension of your business, assisting in HR administration, compliance, payroll and risk management. The PEO will partner with clients to manage the risks, compliance issues and costs associated with human resources activities so that the client organization can avoid unnecessary risks and focus their attention on their core business activities.
Many people think that a PEO is an employee leasing company, temp firm or staffing agency. PEO's are NOT any of these types of agencies. The arrangement with a PEO is based on mutually beneficial Co-Employer Agreement. The client maintains the day-to-day management of their employees while the PEO handles compliance, payroll, HR administration and risk management.
In a co-employment contract, the PEO becomes the employer of record for tax and insurance purposes, filing paperwork under its own identification numbers. The client company continues to direct the employees’ day-to-day activities. The value proposition to client companies is that the use of a PEO saves time and staff that would be used to prepare payroll and administer benefits plans, and may reduce legal liabilities or obligations to employees that it would otherwise have.
As of 2010, there are over 700 PEO organizations covering between 2 and 3 million employees(1).
(1) Industrial News, NAPEO, www.napeo.org
A PEO serves as an extension of your business, assisting in HR administration, compliance, payroll and risk management. The PEO will partner with clients to manage the risks, compliance issues and costs associated with human resources activities so that the client organization can avoid unnecessary risks and focus their attention on their core business activities.
Many people think that a PEO is an employee leasing company, temp firm or staffing agency. PEO's are NOT any of these types of agencies. The arrangement with a PEO is based on mutually beneficial Co-Employer Agreement. The client maintains the day-to-day management of their employees while the PEO handles compliance, payroll, HR administration and risk management.
In a co-employment contract, the PEO becomes the employer of record for tax and insurance purposes, filing paperwork under its own identification numbers. The client company continues to direct the employees’ day-to-day activities. The value proposition to client companies is that the use of a PEO saves time and staff that would be used to prepare payroll and administer benefits plans, and may reduce legal liabilities or obligations to employees that it would otherwise have.
As of 2010, there are over 700 PEO organizations covering between 2 and 3 million employees(1).
(1) Industrial News, NAPEO, www.napeo.org
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