Topic Outsourcing HR / PEO

6 Major Employment Responsibilities of a PEO

6 Major Employment Responsibilities of a PEO

Finding and retaining top talent is the biggest challenge facing companies today.  

To stay competitive, businesses must focus their energy on core operations rather than administrative HR tasks. This is where partnering with a professional employer organization (PEO) can provide game-changing support.  

A PEO becomes the employer of record for tax purposes and handles payroll, benefits, compliance, hiring, performance management, and offboarding. Leaning on a PEO lifts a huge burden off a company’s shoulders, empowering leaders to drive growth.  

This is made possible by the employment responsibilities that a PEO takes on for a client. Some major responsibilities include

1. Payroll Management

When partnering with a PEO, you hand the reins of payroll management over to a team of experts. The PEO’s HR professionals efficiently handle payroll processing, including calculating wages, withholdings, and net pay as well as printing and delivering pay statements.  

They also take care of tax filings and deposits by gathering W-4s, submitting payroll taxes, and issuing W-2s at year-end. 

Recordkeeping is a pivotal role the PEO plays by maintaining files on pay rates, garnishments, bonuses, and more for each employee. For convenience, they can set up direct deposit so your team is paid on time without fail.  

The PEO also completes payroll reporting and reconciliation to provide useful data insights while ensuring accuracy. This liberates you from the grueling biweekly grind of payroll reconciliation.  

With assured W-2 preparation and time tracking, you can trust your team is paid punctually and according to the latest compliance standards.  

2. Benefits Administration

Providing quality, affordable benefits is essential for attracting and retaining top talent. A PEO has the expertise to select competitive health insurance, dental, vision, disability, life insurance, and retirement savings plans that meet your team's needs and budget. They handle the demanding work of benefits enrollment, including guiding each employee through selecting plans and coverage levels.  

Your PEO makes changes to enroll new hires, handle life events like marriages and births, and process terminations. Employees inevitably have questions about benefits, which the PEO resolves to prevent you getting bogged down in administrative details. 

Professional employer organizations administer supplemental benefits like health savings accounts (HSAs), flexible spending accounts (FSAs), and health reimbursement arrangements (HRAs) to provide employees maximum flexibility in savings and spending accounts. With Consolidated Omnibus Budget Reconciliation Act (COBRA) benefits administration, employees can continue insurance after separation at their own cost. 

For convenience and compliance, the PEO files benefits-related taxes and reports to keep your company running smoothly. With a PEO overseeing tasks like 401k administration and employee surveys to gauge benefits satisfaction, you can optimize your benefits plans to boost employee satisfaction and productivity

3. HR Compliance

Staying compliant with employment laws is crucial yet complex for any business. PEOs specialize in legal and regulatory requirements so your company stays out of hot water. They monitor federal, state, and local laws, then translate how these rules and changes impact your policies, employee handbooks, and day-to-day operations. 

Required workplace posters are a prime example. PEOs provide and update labor law postings so you don't scramble when laws change. For handbooks, a PEO reviews your current version for compliance, then adds new required policies on topics like leave management, Americans with Disabilities Act (ADA), Family and Medical Leave Act (FMLA,) and more. 

I-9s for new hires and E-Verify systems can be a compliance minefield. PEOs store employee records and confirm every form and step is by the book.  

When workplace injuries happen, PEOs provide expertise on navigating workers' compensation claims and regulations. If an employee files for unemployment, the PEO has your back throughout the claims process. 

In today's world, health and safety requirements seem to multiply daily. PEOs track OSHA, CDC, and other rules so you can focus on growing your business, not reading regulations. With HR compliance handled, you can rest assured your company meets requirements. Now let’s look at how PEOs support hiring and onboarding

4. Onboarding

PEOs leverage their HR expertise to make hiring and onboarding seamless. 

For recruiting, PEOs post openings, screen resumes, conduct interviews, and check references to present you with qualified candidates. They steer your company clear of discriminatory practices in reviewing applications. 

Once you select new hires, the PEO handles critical onboarding tasks. They provide updated employee handbooks and review key policies to set clear expectations. PEOs also coordinate tax paperwork like W-4s to keep your recordkeeping compliant. 

Orientation is another opportunity to engage new hires in your company's culture and vision. PEOs conduct interactive orientations and arrange additional training on technical skills, workplace conduct, and more. With the PEO managing essential hiring and onboarding steps, you can focus on getting new team members quickly up to speed. 

5. Performance Management

Performance management is key for employee growth and aligning your team with company goals. PEOs implement structured systems to set expectations and provide feedback. 

They consult on setting up performance reviews based on job functions, then provide templates for managers to evaluate employees. PEOs also guide managers on giving constructive feedback and documenting performance issues. This ensures you build strong cases for promotions, raises, and discipline. 

For goal setting, PEOs help managers and employees collaboratively set SMART (Specific, Measurable, Achievable, Relevant, Time-Bound) development goals. They also provide training for managers on coaching techniques to motivate team members. 

To boost retention and satisfaction, PEOs can implement peer recognition programs and help arrange employee awards. With their expertise in performance management, PEOs enable you to get peak productivity from top talent. 

6. Offboarding

Employee departures, whether planned or unexpected, require thoughtful offboarding processes. PEOs manage terminations, resignations, retirements, and layoffs with care and compliance. 

They provide termination notices and paperwork in line with employment laws. For transparency, PEOs can conduct exit interviews to gather insights on the employee experience. 

Final pay can be a source of disputes without proper documentation. PEOs ensure employees receive all owed compensation like unpaid wages and unused PTO. If offering severance packages, PEOs administer payments per company guidelines. 

PEOs also oversee benefits transitions, including COBRA administration so departing employees can continue health insurance. If unemployment claims arise, PEOs provide records and respond on the company's behalf. 

With their offboarding expertise, PEOs help you separate respectfully while controlling risks. This lets you focus forward on serving current team members. 

PEOs Take Responsibilities so You Can Focus on Core HR Operations 

Partnering with a professional employer organization can transform your HR operations. PEOs lift major administrative burdens in payroll, benefits, compliance, hiring, performance management, and offboarding. This allows you to focus your precious time and energy on growing your business, not paperwork. 

With PEOs handling essential tasks like payroll processing, 401k administration, and COBRA notifications, you can rest assured critical duties are handled timely and accurately. Compliance becomes a strength rather than a stressor with PEO expertise in labor regulations, safety requirements, and keeping policies current. 

By leveraging PEO recruiting resources, new hire reporting, and onboarding programs, you’ll bring top talent into your organization. Ongoing support with performance management, goal setting, and recognition programs enables you to maximize productivity. 

When workforce changes occur, PEOs manage terminations, exit interviews, unemployment claims, and benefits transitions with empathy and compliance. Across the employee lifecycle, PEOs have you covered. 

In today’s complex regulatory environment, PEOs provide invaluable capabilities for scaling your most valuable asset – your workforce. With the right PEO partnership, you can build a thriving organization. 

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