What is a PEO?

What is a PEO?

by National Peo

A Professional Employer Organization, or PEO, is an effective approach to the management of certain human resources functions which would otherwise detract from the core business of small businesses. By establishing a contractual relationship, National PEO allows for our clients to transfer the burden and thereby eliminate the time and cost of non-productive, but essential processes.

The PEO industry came into being in response to the human resources challenges posed by the changes in the work place environment. Under the PEO contractual arrangement, clients transfer their payroll, benefits, worker’s compensation and human resources administration responsibilities to the PEO for the benefit of both organizations due to increased efficiencies.

Q. Why should you consider utilizing a PEO?

A. Truly successful organizations have discovered that they must focus on their own core competencies-doing what they know-and outsourcing the time consuming, non-revenue producing responsibilities. They seek strategic partners to achieve higher degrees of efficiently for their companies by letting a professional employer organization handle the non-revenue producing functions associated with being an employer.

Q. Specifically, what does National PEO handle for its clients?

A. National PEO “bundles together” and handles many back office functions which cost our clients valuable time and money. National PEO administrates for its clients, among others, the following essential services:

Payroll Processing, Payroll Tax Filing, Worker’s Compensation Insurance, Health Benefits (Group Medical and Dental Insurance), Employee Benefits Package (e.g. 401k, Retirement Plans, and Section 125 Cafeteria Plans), Human Resources issues, Employee Handbooks, E-Verify and Immigration I-9 requirements, Forms maintenance, Direct Deposit services, W-2 Preparation and Reporting, Unemployment Claims and Hearings, Worker Compensation Policy procurement, Premium payments, Claims and Audits, Wage Garnishments, compliance with government reporting and other specialized functions of a human resources Department.

Q. How does utilizing National PEO save money?

A. National PEO will cut operating costs by being more efficient in managing the expenses related to the non-core functions that small and mid-size companies find prohibitive in operating their businesses. These savings will be shared with the clients to the benefit of both organizations. Often times National PEO can also obtain superior employee insurance or Workers Compensation coverage for less cost to the employer and employees.

Q. Does utilizing a PEO impact the relationship with our employees?

A. The only impact on the existing employer-employee relationship is that the employer, may now be able to offer benefits that were not previously available to employees. We do not participate in the running of the client’s business or decision making in any way.  The client maintains the status of Common Law employer and the client retains responsibility for hiring, firing, supervision, compensation, etc.. National PEO assumes the role of Administrative Employer and reports client employees under our tax id numbers.  This is what allows us to offers certain benefits and act on your behalf with government agencies in employment matters.