March 1, 2023 | By Questco Companies
Stress and worry can disrupt the functioning of a business, whether it's an executive, middle manager, or employee. Professional employer organizations (PEOs) can ease that stress in many ways.
PEOs provide the peace of mind of having a team of experienced HR and employment experts to help you comply with government regulations that can be confusing and financially risky if you get them wrong.
PEOs can also help you take care of employees by enabling you to offer Fortune 500-level benefits at an affordable cost and providing access to experienced HR employee relations experts.
Moreover, when you partner with a best-in-class PEO, you're always only a phone call away from expert assistance. Here's everything you need to know about the benefits of a PEO partnership and how they can bring you more peace of mind.
What is a PEO?
First, let's address the question on everybody's mind: what is a PEO, and what do they do? Professional employer organizations are outsourcing firms that your company can partner with in a 'co-employment' relationship to alleviate the burden of administrative HR tasks. In addition to being your all-in-one HR outsourcing solution, your business gains access to exclusive HR technologies that streamline processes to increase efficiency and reduce the likelihood of error.
Services a PEO can provide include:
How PEOs Bring Peace of Mind to Employers
Different industries require a variety of skills, talent, and expertise. Nonetheless, every business needs an effective and efficient HR department to keep running smoothly and successfully. This is where outsourcing to a PEO can give you peace of mind while also allowing you to focus on driving revenue rather than paperwork.
No more payroll errors
The Internal Revenue Service (IRS) puts the penalty amount for payroll mistakes at around $7 million yearly. One-third of employers contribute to the penalty amount in any given year. To reduce your risks of being a part of the unlucky 'one-third,' PEOs can take over payroll processing.
This way, you don't have to worry about preparing and distributing relevant forms — such as W-2s, W-9s, 1099s, etc. — to your employees before their deadlines. Moreover, fewer errors are made because PEOs have the undivided attention, time, and expertise payroll needs to ensure the processing goes smoothly and without issues.
Handle the complexities of tax withholding
Calculating withholdings can be a significant headache for those who aren't familiar with all of its ins and outs. Fortunately, a PEO can pay your employment taxes on your behalf (with your funds), so you don't have to stress about it anymore. Thanks to your co-employment relationship with a PEO, they can file your employment tax returns under their name and Federal Employer Identification Number (FEIN).
Stays up-to-date on changes in local, state, and federal rules and regulations
Local, state, and federal rules and regulations are constantly changing. A PEO has the time and resources to stay up-to-date on the latest so your company remains compliant and avoids penalties. This means no more worrying about OSHA, the Department of Labor, or the Internal Revenue Service knocking at your door for an unknown reason. It also means not worrying about major consequences for non-compliance, like thousands of dollars in fines, prison time, damage to your reputation, and more.
With a PEO, you will also experience a reduction of liability since you'll no longer be named fiduciary on retirement plans. Since fiduciaries must follow specific rules set out under ERISA — i.e., the Duty to Follow Plan Terms, Prudent Expert Rule, Exclusive Benefit Rule, and Diversification rules — passing the liability over to a PEO can take the stress off you.
Handle yearly audits (e.g., workers comp audit, Form 5500 audit, etc.)
Are you already stressing about the many audits coming up within the year? It seems like as soon as one is completed, another is right around the corner. The stress of ensuring your company meets every standard can keep you from focusing on important business matters. A PEO can handle all these yearly audits for you and take measures to ensure your business is prepared for them.
Represents you in unemployment claims hearings
If you weren't convinced that a PEO would provide you with more peace of mind than you have now, then maybe this will help: PEOs can represent employers in unemployment claims hearings, so they don't have to be bothered by the claims of ex-employees. Hours of your time and money could be wasted on ex-employees' claims. With a PEO, you can save your precious time and rely on the fact that they'll get you the best possible results.
How PEOs Bring Peace of Mind to Employers
With a PEO, you'll find peace of mind in the following ways:
For Total Peace of Mind, Go with a CPEO
Looking for even more peace of mind? If a regular PEO makes a payroll mistake, you can be held partially responsible. However, that will not happen with an IRS-certified PEO, otherwise known as a CPEO. A CPEO takes 100% responsibility for late or erroneous payments as long as you pay them eventually. This way, you can focus on the business areas that matter most to you without fear of consequences out of your hand.