All small and mid-sized companies have administrative tasks to complete. Some of this work requires expert-level analysis and training to ensure compliance. Any violations, even innocent mistakes, can lead to costly and embarrassing fines.
Besides helping you avoid fines, a Professional Employer Organization (PEO) can also help your internal team focus on your core business needs. Your PEO takes over certain HR administrative duties to complement, not replace, your existing team. Below is a list of 15 items that a PEO handles for you.
1. Compute Pay
Payroll is complex and ripe for mistakes. Overtime laws can be confusing and not all platforms automatically calculate overtime or deductions. It is too much pressure to leave this role to one person. With a PEO, you get access to a team of payroll experts so you never have to worry about your payroll being inaccurate.
2. Compute Federal, State, and Local Taxes
The law requires tax remittance for every business, large and small. But getting this right can be tough. Besides helping you with your payroll, your PEO will also assist you in your tax filings in a timely and effective manner so you will not have to worry.
3. Apply Tax Lien and Garnishments
These deductions can be confusing, even for experienced payroll professionals. Tax liens, garnishments, and other required deductions require a keen eye for detail and strict adherence to laws and regulations. A PEO ensures absolute accuracy by keeping up to date on laws and ensuring any employee deductions are accurate and allowed.
4. Track Benefits
Employers have to keep detailed records regarding employee benefits, benefits eligibility requirements, and applicable probationary periods. Trusting this to one employee on your team places a mountain of pressure on them to ensure accuracy. They also need to track child support payments and ensure each payment is made in the correct amount and the employee is not overcharged. PEOs are built to handle these kinds of tasks.
5. File Employee Taxes
Employee taxes are deducted from every paycheck. Depending on federal, state, and local tax law, these deductions might also change over time. An expert payroll professional at a PEO will be in the best position to stay on top of these changes and on top of your employee's taxes.
6. Risk Management Programs
Risks are inevitable in business. But you can take steps to minimize risk. Looking at risks throughout your organization helps your planning and decision-making for your business. Outsourced HR risk management programs will make sure your employees are correctly trained and classified.
7. OSHA Compliance
The Occupational Safety and Health Administration (OSHA) governs workplace safety. Part of OSHA compliance is making sure that your employees have a safe working environment and are properly trained on how to use tools and equipment. Your PEO can conduct regular audits to ensure your business is compliant and help you get compliant if your business is lacking in any area.
8. Workers' Compensation Insurance
Getting workers' comp insurance can be challenging for small businesses and companies in certain industries, like construction. With a PEO, you gain access to their workers' comp plan which might have a lower experience modifier rate than what you could get on your own. This can create massive cost savings.
9. 401(k) Administration
Administering any benefit can be challenging, even more so when financial rules are involved. 401(k) administration requires intense focus to ensure the retirement plan follows the rules and properly credits each employee's plan.
10. COBRA and ERISA Compliance
The Consolidated Omnibus Budget Reconciliation Act (COBRA) requires employers to provide former employees with health benefit options. COBRA mandates that employees who previously had healthcare through their employer must be given the opportunity to continue coverage, at their expense, for a limited period. The Employee Retirement Security Act (ERISA) governs retirement plans. ERISA requires employers to provide retirement plan participants with information about funding, vesting, and benefit accrual.
11. New Hire Process
Hiring new employees is a great sign of your company's success. Hiring a new employee also requires a company to follow strict guidelines. You must complete an I-9, verification of the employee's ability to work. You must collect a W-4, verifying the employee's legal information. You must also ensure that the employee was hired through legal means. All of this is part of a new hire process that your PEO can build for you, creating a road map for you to follow each time.
12. Unemployment Claims management
Unemployment claims require swift action by employers. If a claim is filed and you do not respond in time or accurately, you risk missing your opportunity to object to the claim. Your PEO has processes set up to receive and respond to unemployment claims quickly and accurately, ensuring only legitimate claims receive approval.
13. Job Interviews
Job interviews can be a trap for inexperienced employers. They may ask inappropriate or even illegal questions. This can result in a lawsuit that could cost your company dearly. Your PEO will train employees interviewing candidates to ask only appropriate and legal questions.
14. Safety Training
The importance of a safety training program cannot be understated. Training new employees and re-training employees annually will help to keep your employees safe. These programs can also lower your workers' compensation costs because of fewer on-the-job accidents.
15. Return to Work Program
There will always be employees who suffer work-related injuries. Having a return to work program in place helps those employees get back to work, even if they are working a modified schedule or altered position. Your PEO will help you set up a return to work program or, if you already have one, help administer it.
PEOs Take on Your Administrative Burdens
The above barely scratches the surface of what a trusted PEO partner can provide to your company. Taking on HR administrative burdens like these will help your company grow faster and reduce overhead costs while staying compliant with employment laws.
PEOs provide benefits that go well beyond HR administration duties. To learn more about how a PEO can help your company, download "How PEO co-employment Reduces Risk and Rewards Employers."