04 Dec 2016
What is a PEO?
What is a PEO and how does it help?
A PEO is an acronym for Professional Employer Organization.
The term PEO is also referred to as “employee leasing.” A PEO offers human resource services for their clients — paying wages, taxes and compliance help involving state & federal rules along with regulations. Clients effectively outsource the management of HR, employee benefits, payroll and work compensation insurance to a PEO.
In turn, Florida PEO clients focus their time on core competencies in order to grow their company.
Florida businesses that utilize a PEO include roofers, painters, mechanics, restaurants, retailers, plumbers, and many more.
How does a PEO work?
A PEO “co-employs” with a client’s worksite employees after the customer signs a client service agreement (CSA).
The “co-employment” relationship involves a sharing of responsibilities between the PEO and the client – the relationship is spelled out in the client service agreement (CSA). In other words, the PEO serves as a fiscal intermediary.
Remittance of wages and withholdings of worksite employees are done by the PEO. Then, the PEO collects, reports and deposits employment taxes with local, state and federal agencies.
A PEO submits Form W-2 for the wages paid by the PEO under the PEO’s Federal ID# (FEIN). The client retains total control. The client is responsible for all other aspects of their company — business operations, product development, sales, marketing, etc.
Benefits of working with a PEO
One of the primary benefits of using a PEO is workers compensation insurance.
High risk class codes, high mods or lapse in coverage. NO problem.
Florida work comp premium payments with PEOs are “pay as you go.”
PEOs Pay-As-You-Go program use real-time payroll data. The PEO then calculates the premium based on the actual payroll reported and the job class codes.