Frequently Asked Questions

 

Do I lose control of my business?

Is a PEO like a temporary Staffing Service?

Is my company too small or too large to benefit from a PEO?

Why would a small business use a PEO?

Who is responsible for the employee's wages and unemployment taxes ?

Who is responsible for workers' compensation?

How does the PEO concept work?

 

Do I lose control of my business?

No. The client retains ownership of the company and control over its operations. As co-employers, the PEO and client will contractually share or allocate employer responsibilities and liabilities. The PEO will generally only assume responsibilities and liabilities associated with a "general" employer for purposes of employee administration, payroll, taxes and benefits. The client usually retains those rights and responsibilities associated with "special" employers related to actual business operations. As such, the client will continue to have responsibility for worksite safety and compliance. The PEO will be responsible for payroll and employment taxes, will maintain employee files, employee handbooks and health benefits. Because the Professional Employer Organization may also be responsible for workers' compensation, the PEO will also focus on improving safety manuals and compliance. In general terms, the PEO will focus on employment-related issues and the client will be responsible for the actual business operations.

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Is a PEO like a temporary Staffing Service?

Like employee leasing, a temporary staffing service recruits employees and assigns them to clients to support or supplement the client's workforce in special work situations, such as employee absences, temporary skill shortages, or seasonal workloads. These workers are traditionally only a small portion of the client's workforce. Professional Employer Organization services, contractually assumes and manages employee administration for all or a majority of a client's workforce. Industry ratios identify the PEO arrangement as a long-term relationship with nearly 90% of our clients and worksite employees remaining with the PEO for a year or longer. Worksite employees participate in the PEO's full range of employee benefits including, health benefits, dental, and life insurance, vision care, and retirement savings plans.

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Is my company too small or too large to benefit from a PEO?

The average client customer of a PEO is a small business with 16 worksite employees, though larger businesses also find value in a PEO arrangement. These small business customers include every single type of business from accountants to small manufacturers and every profession in between including doctors, retailers, mechanics and more. Other forms of HR Outsourcing include the ASO and BPO model's which are designed to handle larger companies'

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Why would a small business use a PEO?

Small business owners want to focus their time and energy on the "business of their business" and not on the "business of employment." As businesses grow, most small business owners don't have the necessary human resource training; payroll and accounting skills; knowledge of regulatory compliance; or backgrounds in risk management, insurance and employee benefit programs to meet the demands of being an employer. Human Resource Outsourcing takes over the employee administration for the business owner allowing them to grow their business.

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Who is responsible for the employee's wages and unemployment taxes ?

The PEO assumes responsibility and liability for payment of wages and compliance with all rules and regulations governing the reporting and payment of federal and state taxes on wages paid to its employees. PEO's have long established their role as reporting income and handling withholding, FICA and FUTA. In 2002, the IRS issued guidance confirming the ability of human resource outsourcing entities (including PEO services) to offer qualified retirement benefits.

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Who is responsible for workers' compensation?

Many states recognize the PEO as the employer of worksite employees for purposes of providing workers' compensation coverage.

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How does the PEO concept work?

  Once a client company contracts with a PEO, the PEO will then co-employ the client's worksite employees. In the relationship among a Professional Employer Organization, a worksite employee, and a client company, there exists a co-employment relationship in which both the PEO and client company have an employment relationship with the worker. The PEO assumes responsibility and liability for the employee administration such as risk management or workers compensation, personnel management, employee files, labor compliance and payroll tax filings. The client company retains responsibility for and manages product development and production, business operations, marketing, sales, and service. The PEO and the client share certain responsibilities for employment law compliance. As a co-employer, the PEO will often provide employee administration, labor compliance, workers compensation, employee handbooks and health benefits for the worksite employees.

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Please call us today for more answers to your questions:

 

JR & Associates, Inc.
1900 Glades Road Suite 102
Boca Raton , FL 33431
 561-312-0919
888-343-8813