A professional employer organization, or PEO, is used by many in the staffing industry for dealing with payroll, payroll issues, and other vital employee paperwork. A PEO can work with your company in providing comprehensive and affordable payroll, concerns regarding benefits, as well as human resource services through a business-to-business relationship.
Engaging in this type of co-employment relationship will allow a PEO to take on many of your employee-related employer responsibilities, while you continue to manage and run your business. Because PEOs have exposures and liabilities to consider in the duties they perform, they need peo insurance coverage to assist in any claims filed against the organization.
Specific duties of a PEO
As the co-employer, the PEO has the authority to process certain duties and perform functions such as payroll, benefits, tax remittance and related government filings. Because it acts as the employer of record for these purposes, the PEO can assume a greater amount of responsibility than would a payroll company operating in a similar capacity.
With PEO-sponsored benefit plans, your employees will be given access to a variety of benefits your company couldn’t obtain on its own. This includes medical, dental and vision coverage, a health care flexible spending account, a retirement plan, life insurance and personal accident insurance. In addition, they can provide short-term and long-term disability insurance, adoption assistance, commuter benefits and educational assistance.
As your payroll service provider, the PEO manages the regular compensation of your employees, along with payroll record maintenance and management, payroll compliance, online paystubs and W-2s, payroll management reports, garnishment and deduction administration and PTO accruals.
A PEO helps you manage your liabilities as an employer, providing employee handbooks, new hire onboarding, termination assistance, leave of absence requests, employee relations support, substance abuse prevention services, liability management training, employment verification, and much more.
The hiring of a PEO reduces your liability, and peo insurance will help reduce their own risks as well if certain business practices result in litigation.