20.02.2024 line employer of record

What is a PEO (Professional Employer Organization)?

A Professional Employer Organization (PEO) is a form of comprehensive human resource outsourcing known as co-employment. In this setup, the PEO undertakes various tasks related to employee administration, including payroll and benefits administration, on behalf of a business. While some PEOs also offer strategic services, each one is unique, so it’s crucial to research providers and compare their offerings.

Why use a PEO?

With the expert, strategic guidance of a PEO, you may be able to grow your business while having peace of mind knowing you’re better protected. PEOs typically assist with:

  1. Payroll and tax filing

PEOs process payroll and, in some cases, handle local, state, and federal employment taxes. Many also integrate payroll with time and attendance systems to reduce duplicate data entry and errors.

2. Benefits administration

Co-employment arrangements often include access to high-quality, cost-effective health insurance, dental care, retirement benefits, and other employee perks. The PEO usually manages employee enrollment for these benefits and processes claims.

3. Compliance

PEOs typically employ compliance experts who can help protect your business from fines and penalties. Their expertise may cover areas such as payroll tax law, reporting requirements, unemployment insurance, workers’ compensation, hiring, and HR compliance.

4. Risk and safety

In addition to providing workers’ compensation insurance, PEOs may offer safety audits and training programs to help mitigate claims. They may also assist with Occupational Safety and Health Administration (OSHA) inspections.

5. Human resource suport

Many PEOs have HR professionals who provide HR services and support. If you already have an in-house HR team, the PEO can partner with them both strategically and administratively.

6. Talent management

Some PEOs offer comprehensive talent services, including recruiting and strategic hiring, employee training and engagement, and performance management.

PEO for small business

Small and mid-sized business owners frequently rely on PEOs for assistance with essential and strategic HR management, allowing them to concentrate on their core competencies. This includes activities such as creating, improving, and marketing the products and services that define their brands. Discover more about the advantages a PEO can offer to small businesses.

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