Access to Health Care Options

PEOs offer affordable health care benefits due to large number of participants in their program. Benefits include health, dental, vision, FSA, HSA, 401K retirement. PEOs also handle benefits administration, claims management, and a host of other services, freeing up the client’s HR staff. Most importantly, the co-employment relationship ensures the client remains compliant with the Affordable Care Act (ACA), and Federal laws for coverage.

Lower State Unemployment Tax Rate

Switching to a PEO allows a company to reset a high SUTA rate, and pay taxes based on the PEO’s low SUTA rate. PEOs have a low SUTA rate due to size and buy down options. Clients with high SUTA rates save money with the PEO’s SUTA rate. Future employee terminations are also processed under the PEOs unemployment account.

Lower Experience Modifiers E-MODS

Workers Compensation claims drive up both the Experience Modifier and insurance costs, making companies ineligible to work in O&G and Construction projects. PEOs have internal resources to control their E-Mod. As a PEO client, the company can use the lower E-Mod to retain contracts. Workers compensation rates through the PEO’s master policy are also on the average 40% lower than manual rates from the open market.

Multi-state Payroll Tax

Multi-state employees require special consideration. Some states require payroll taxes to be withheld not only in the employee’s home state, but also in the state the work is being performed. Withholding is complicated when employees live in one state and work in another. Or perform services in more than one state.  PEOs can process multi-state payroll withhholdings with their sophisticated payroll processing software.

Multi-state Workers Compensation Insurance

Multi-state workers compensation insurance has the same complexity as multi-state payroll. Workers compensation policies follow both the employee domicile, and the state where the work is performed. Employers might assume they have coverage, whereas in reality there could be gaps in coverage for an injured employee. PEOs have multi-state policies which eliminate the need to write separate policies and pay multiple down payments. They are well versed in the intricacies of multi-state exposure.

Geofence Time Capture for Off-Site Employees

Employers with off-site and remote employees can confirm hours and location using the geofence clock in – out features. Hours are automatically uploaded to the payroll portal.

Multi-location Operations

Companies with multiple outlets can allocate labor costs to different locations and different companies with sophisticated time allocation tools. PEOs process payroll using their own Federal Tax ID, offering flexibility to employers with cost allocation and payroll reports.

Sexual Harassment and EPLI Claims

Employers who have experienced EPLI claims for sexual harassment, wage discrimination, wrongful termination, know first-hand the cost and disruption to their business. Due to the co-employment agreement, the PEO is an active participant in the defense of these claims. PEOs have robust HSE & employee handbook manuals. Their safety programs are tailored to satisfy ISNetworld, Avetta, and PEC requirements.

Legacy Payroll and HR Systems

Outdated legacy systems lack the sophisticated reporting and data analysis features a PEO can provide, to analyze and make informed decisions for human resource allocation. HR Management has grown to be one of the biggest challenges faced by inexperienced payroll managers, who inadvertently make a bad situation worse, by not following legal precedents when counselling and terminating employees. PEOs have the structure, employment attorneys, and HR expertise, to manage and document the process and follow established protocols to forestall legal complications.

Cash Flow Advantages With a PEO

PEOs have a pay as you go workers compensation program. Majority of clients are within the PEO’s master policy, benefitting from low negotiated comp rates. The premiums are collected as they are earned, hence avoiding both the large deposit associated with standalone policies, and the end of term audits.