Professional Employer Organization (PEO) MACE. WHAT IS A PEO? Businesses across America have discovered the incredible value of PEOs because they provide:
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WHAT IS A PEO?
Businesses across America have discovered the incredible value of PEOs because they provide:
Relief from the burden of employment administration.
A wide range of personnel management solutions through a team of professionals.
Improved employment practices, compliance and risk management to reduce liabilities.
Access to a comprehensive employee benefits package, allowing clients to be competitive in the labor market.
Assistance to improve productivity and profitability.
WHAT IS A PEO?
700 TO 900 PEO’S Average client size 20 employees Small business receives Fortune
500 Benefits Employment growth among PEO
employers is 9% greater Better & Safer Workplace
Benefits & Insurance
State/Fed Payroll Filing
Payroll Taxes & Audits
Human Resource Compliance
Workers Compensation
Selecting a PEO
1.Assess your workplace to determine your human resource and risk management needs.
2.Make sure the PEO is capable of meeting your goals. 3.Ask for client and professional references.
4.Does the PEO have a demonstrated history of adherence to the industry's professional performance practices, including responsible financial management of its business? Check to determine if the PEO’s financial statements are independently audited by a CPA.
5. Is the company is a member of NAPEO.
6.Investigate the company's administrative and management expertise and competence.
7.Understand how the employee benefits are funded. Is the PEO fully insured or partially self-funded? Who is the third-party administrator (TPA) or carrier? Is their TPA or carrier authorized to do business in your state?
8.Understand how the employee benefits are tailored.
9.Review the service agreement carefully. What provisions permit you or the PEO to cancel the terms of the contract?
10.Make sure that the company you are considering meets all state requirements.
WHAT IS THE TYPICAL COST PER EMPLOYEE ?
According to the US Department of Labor and the Chamber of Commerce study, if a company has between 10 and 24 employees, it should cost a typical company between 4 and 8 percent of their gross-payroll to perform all the non-revenue producing tasks related to running the business.
What’s It Cost Now
~U.S. Dept. of Labor & U.S. Chamber of Commerce~
# Of Employees 1-9 10-24 25-49 50+Administrative Cost 8-12% 4-8% 3-6% 2-5%
~Small Business Administration Says~Cost Per Employee for firms with:
All Firms <20 EE’s 20-499 EE’sType of RegulationAll Fed Regulations $5,633 $7,647 $5,411Economic $2,567 $2,127 $2,372Workplace $ 922 $ 920 $1,051Environmental $1,249 $3,296 $1,040Tax Compliance $ 894 $1,304 $ 948
It Costs $5,400 per Employee
The Burden of Employment Law There are 96 Federal labor laws
and regulations facing employers today.
PEO’s offer support and understanding of what these laws mean and how they can effect their clients business.
In many cases the PEO absorbs some of these law burdens from the client.
The Current Setup
In most cases the current corporate setup has the “On-Site Employer” attached to each employee directly with no buffer in between.
The “On-Site Employer” has 100% direction and control of the employees and maintains 100% of the liability.
Potential PEO Issues:Potential Issues Administration Fee based
on % of payroll
Some PEO’s will continue charging for FUTA & SUTA after limits
Limited to insurance companies & plans offered
Co-Employment causes a contractual allocation & sharing or ER Responsibilities
Treated as Large Employer for Health Benefits
Potential Results Could incur higher
expenses for the same level of service
Huge overpayments
Lack of flexibility
Employee confusion
Misnomer – The on site employer size would be the determining factor
The Current Setup
100% liability In the area’s that the PEO’s expert staff and professionals specialize in:
Human Resources
Unemployment
Workers Comp
Safety/Risk Management
Commercial Insurance
Employee Benefits
Payroll
Co-Employment
The liability of having employees will be greatly reduced through a legal employment arrangement called: Co-Employment
In a Co-Employment arrangement, the On Site Employer still has the same relationship with the employees, but now the PEO assists in a way that drastically relieves a large portion of your back-office workload.
Co-Employment
The PEO takes over these non-revenue producing tasks:
Human Resources
Unemployment
Workers Comp
Safety/Risk Management
Insurance
Employee Benefits
Payroll
Co-Employment
The On Site Employer still maintains direction and control of the employees-whether in the office or out at a jobsite.
But instead of having to bear the administrative load and liability of the back-office duties, the liability will be transferred to the PEO.
How Is This Cost Effective?
PEO’s stabilize their clients cash flow by eliminating down payments and costly premium deposits.
The Workers Comp is paid with each week’s payroll based on the actual payroll so the insurance cost is always commensurate with the size of the clients body of employees.
PEO is processing the payroll each week, there is no need for annual audits.
PEO’s are able to ensure that their clients unemployment taxes are insulated in a large group, managed by a team of experts.
PEO’s allow their key employees to focus on revenue producing tasks
Multiple Venders Vs. PEO Attorney
Payroll Company
Workers Comp Carrier
Safety Consultant
HR
Employee Benefits
Life/Health
401K
PEO: One source brings the solution to many issues.
Benefits of The Product1. Transfers some of the substantial liability that
business owners have.2. Improves Cash Flow and allows for a more
accurate budget forecast.3. Human Resources Solutions. 4. Insulation for the client companies state
unemployment tax rate. (In many states)5. Customized employee handbooks.6. Competitive Workers Compensation Rates.7. Enhancement of clients current safety
program.8. Employer Practices Liability Insurance.9. Full suite of employee benefit programs.10. Flexible payroll processing and tax
remittance.
OUR BUSINESS MODEL Daneker & Dean pre-screens it’s Professional
Employer Organizations (PEO’S)
We find the best PEO’s that have long term stability
Best Practices and proof of tax remittance.
Several PEO’s to chose from.
The PEO that fits the clients needs.
Eliminate the yearly renewal process related to workers compensation placement.
REVENUE SHARE INCENTIVE PROGRAM
Why Daneker & Dean 100%
Independent Industry
Watchdog Trusted Experts Client Advocacy
THANK YOU
Jerry McGinn
215-350-7304
jerrym@danekerdean.com
www.danekerdean.com
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