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Business owners often wear many hats when it comes to administrative duties and daily operations. This can quickly lead to small and medium-sized business owners becoming overwhelmed and overworked.
Entering a co-employment relationship with a professional employer organization (PEO) can greatly help you reduce your administrative workload and offer many other benefits as well.
Continue reading as we explore some of the top benefits a co-employment arrangement can offer your business.
What is co-employment?
Co-employment is the relationship between a business/employer and a professional employer organization (PEO). This arrangement means that both the business owner and PEO share distinct employment obligations, such as liability and responsibility for employees.
In a typical co-employment relationship with a PEO, the PEO will assume responsibility for most payroll obligations and tax filings, making the PEO the “employer of record” for taxation and insurance purposes.
PEOs also typically offer additional services for your business, including health and retirement benefits, welfare, and all the associated administrative paperwork. In these situations, your team is employed by you under a contract that clearly defines the respective responsibilities and liabilities of you and your PEO. For example, business owners remain responsible for day-to-day operations, such as training, employee reviews, hiring and firing.
What are the benefits of a co-employment relationship?
When you enter a co-employment relationship with a PEO, your business will experience a wide array of benefits from being in this arrangement, including:
The co-employment nature of PEOs allows you as a business owner to harness the combined bargaining and buying power of all of the PEOs client businesses, providing you with access to high-quality insurance for your employees and families that include HMO, POS, and PPO plan options.
When a PEO takes over this responsibility, you have more time to focus on efforts that contribute to the success of your business. PEOs work with your business by setting up a comprehensive system for payroll processing, so you can avoid wage claims or expensive penalties
Workers’ compensation is a legal requirement in 49 states, including Florida. PEOs ensure your business has the proper insurance to deal with wage replacement and medical benefits for employees who are injured on the job.
Because of the co-employment relationship, PEOs also assume all administration of this required policy and will work directly with the carrier to minimize costly escalated claims while assisting in creating light duty work to get employees returning to work quickly.
Labor and employment laws can be complex for small business owners to keep up with. PEOs can help your business remain compliant in both state and federal employment laws. They can also keep you updated about any employment law changes as soon as they occur.
How do I determine the right PEO company to enter into a co-employment relationship with?
It’s important to do adequate research on a PEO before choosing to partner with them in a co-employment relationship.
When looking for the right PEO, ensure they are a certified professional employer organization (CPEO). CPEOs are certified by the IRS which allows them to provide benefits and handle HR functions such as payroll, tax remittance, and employment tax filings. If a PEO is not certified by the IRS and they fail to pay taxes on behalf of your business, you will be held responsible and can get penalized.
Is your business looking for a PEO in Orlando?
PER has provided outsourced HR services to small and medium-sized businesses across Central Florida and beyond for over 25 years. As a CPEO, we offer the extensive capabilities of a full-service PEO, while maintaining the personal connection of a small business.
PER can help your business by handling new hire eligibility and enrollment, qualified employee changes, and processing employee deductions and employer contributions. As part of our comprehensive services, we also offer payroll management, benefits administration, workers’ compensation, 401(k) retirement plans, and more.
Ready to partner with PER?
Contact us today to get started!
Ready to grow your business?