A Professional Employer Organization (PEO), enables clients to responsibly offload the management of human resources and other employment-related tasks including but not limited to employee administration, exit, and onboarding, workplace safety, state and federal compliance and labor laws, unemployment and workers compensation claims, risk management, benefits, payroll, payroll tax compliance and much more in a cost effective way.
Through this co-employment arrangement, the business owner (employer) and the PEO contractually share employer responsibilities and liabilities. The PEO is recognized as the Administrative Employer and the client or business is the Worksite Employer. PEO enable businesses the ability focus on their core competencies to maintain and grow their bottom line, while the PEO concentrates on what they do best.
The PEO delivers value to employers through the shared risk and liability; this model is referred to as a “co-employer” or “co-employment” relationship. The co-employer arrangement enables a company to transfer many of its key employer responsibilities to the PEO. A formal agreement specifies the division of responsibilities between the PEO and the business owner. There is no “loss of control” through this arrangement. Companies working with PEOs retain complete control over operations, workforce management (hiring & firing), building company culture and defining the employment brand. In this arrangement the PEO is able to offer the worksite employer discounts and efficiencies due to the economies of scale and their sophisticated HRIS system. Some of these include discounted workers comp that is administered pay as you go with no deposit and no annual audit, an employee portal with hosted W2s and pay stubs, ACA compliance and an employer portal with hundreds of reports and tracking.
Small to mid-sized businesses (1 to 500 employees) are best suited to the PEO model because the PEO’s economies of scale gives smaller companies the advantage of “larger company” look and feel. These upgrades in technology, insurance, benefits, HR and administration are normally only available to larger corporations as they are able to afford those resources. PEO services are able to free up the limited resources of the small business owner, allowing them to focus on more strategic initiatives and growing their business.
The term “ASO,” stands for Administrative Services Organization. The most important difference between an ASO and a PEO is the service provided through an ASO does not establish a co-employer relationship with the employees. No “risk” is involved.
An ASO oversees the day-to-day administrative aspects of managing a company’s human resource functions. While an ASO does not sponsor employee benefit programs or workers compensation coverage, the ASO is generally active in arranging coverage and assisting the client in securing coverage. The client company remains the sole sponsor when working with an ASO. Many companies leverage this solution because they can still be very hands-on without having to handle cumbersome administrative details on a daily basis and manage multiple vendor relationships.
An ASO will handle your company’s payroll and tax filing, the paperwork is filed under your federal employer’s identification number. An ASO can also offer assistance with legal questions on compliance although it remains the client company’s responsibility to act on these issues.
Any type and size of business can utilize an ASO.
An EOR, also known as Employer of Record, is a newer industry term for Staffing or Workforce Management. Through an EOR arrangement the EOR contractually assumes all of the employer liabilities for payroll, workers comp, tax filing and human resource support. In some circumstance the EOR will also support with recruitment, training and placement of temporary workforce for the worksite employer.
The EOR provides a value to the business by absorbing all of the risk related to the workforce. Additionally, the client is billed on a total burden rate or a set rate for every hour the employees work making it easy to manage costs and cash flow. The EOR is responsible for keeping up to date with state and local laws and maintaining compliance and all tax filings.
Companies that are growing or expanding into other states can benefit from and EOR. This affords them the ability to test a market before making a bigger commitment. Additionally, companies looking to offload some of their riskier work or jobs where workers are more injury prone which can drive up their cost of workers comp insurance.
HR is the division of a company that is focused on activities relating to employees. The Human Resources department is responsible for the flowing included but not limited to: recruiting, vetting, selecting, hiring, onboarding, training, promoting, disciplining, paying and firing employees and independent contractors. People in HR are often HR Generalists or can specialize in a particular area such as insurance or benefits depending the size of the organization.
Organizations can leverage a PEO for their HR support as the service is included in the administration fee the PEO charges. There are other organizations that provide on demand HR support via a subscription or membership where each client company is provided an HR hotline and dedicated certified HR professional to answer all of their HR related questions and concerns. Many of these organizations will create costume handbooks, polices and procedures as well as onsite trainings.
Any organization with five or more employees can benefit from the advice and direction of an HR professional.
Payroll Processing refers to the procedure of managing your organizations method of paying employee wages. When done in house, payroll processing can be very time consuming and complex. Payroll processing covers all tasks relating to tax compliance, new hire onboarding and departure, time reporting, labor laws, state and federal regulations, payroll related tax filings, W-2, 940&941 withholdings, and payroll processing software.
Organizations can leverage a PEO for payroll processing. Once you are onboarded into a program you will be given a web based payroll tool that your employees will have access to important forms and information related to their pay. From there payroll is simplified to submitting your employees hous and letting the PEO handle the rest. Have peace of mind in knowing that you will no longer have to worry about issues with payroll. You will no longer have to worry about late or missed payments, not filing your taxes, and any additional penalties associated with improper payroll documentation.
Anyone can utilize outsourced payroll processing services.
Workers compensation Coverage protects employees in the incident of a work related injury or death. It provides medical, death and disability, and rehabilitation for affected workers. Workers compensation policies also help employers reduce their risk, implement safety procedures, and advise on policies to prevent further industries.
Owning a risky business can severely stifle a company’s cash flow because of the astronomical costs associated with workers comp. High-risk workers comp class codes don’t have to injure your bottom line and extinguish your profits. AXIS Group’s wholesale access to PEOs helps business owners maximize their competitive advantage and increase revenue by capitalizing on alternative work comp markets that will help high risk industries reduce their risk through a variety of risk assessment procedures in policies. Do not underestimate the damage a claim can have on your business. Get the proper coverage so you can keep your doors open if an incident were to occur.
Anyone whom owns a business in a high risk industry.
Premium Only is a version of an ASO, Administrative Services Organization. In this arrangement the provider will administer the workers comp policy for the client company. It functions very similar to a traditional work comp policy and requires a program deposit, payroll cycle installment payments and comes with additional features such as risk management support. The client company can also bolt on other support services, should the elect to, such as EPLI and HR to complement the risk management support. Think of it as an a’ la carte style policy.
Each pay period the client will be required to submit a payroll register so work comp premium can be calculated. Once premium is calculated the client will have 48 hours to remit payment of the invoice. The program provider reserves the right to request quarterly 941s to confirm accuracy of payroll registers.
Companies on the state fund, have a mod rating over 1, gaps in coverage, start up businesses, and a variety of industries not limited to staffing, construction, amazon deliver, and hospitality.