What Does PEO Stand For?

What is a PEO? Understanding Professional Employer Organizations

HR is an essential to running a business. However, if human resources are not your core business, then you could be better served by partnering with a PEO. So, what does PEO stand for? PEOs, or Professional Employer Organizations, are becoming increasingly popular with small businesses, saving time and money by taking on many of the HR tasks that would otherwise fall to business owners or office managers. Because of all the rules and regulations around employment, payroll, taxes, and more, the risk and compliance of taking responsibility without being an expert in HR can be overwhelming.

Partnering with a PEO shifts the responsibility and accountability for HR tasks. These include payroll, benefits, federal and state labor law compliance, workers’ compensation, and even employee training. Taking these HR activities off your plate leaves you free to focus on running your business.

Find out more about PEOs, who should use them, why, and how to select the right PEO for your business. 

What Does PEO Stand For?

A professional employer organization or PEO is a human resources service that is a  business process outsourcing and risk-sharing arrangement related to having employees. A PEO is in a partnership with clients, usually small businesses, for the purpose of providing human resource functions. The professional employer organization industry has been around for decades. Today, there are almost 500 PEOs in the United States alone according to the National Association of Professional Employer Organization (NAPEO).

PEOs provide services to their client’s employees across their organization, often across states. By aggregating employees across clients, a PEO employs thousands of people, which creates leverage for negotiating benefits, HR information systems (HRIS), learning management systems (LMS), and other HR services. In the United States, PEOs assist 173,000 small and medium-sized enterprises. Today, the PEO sector employs more than 7 million people globally.

When a company partners with a PEO, both share the responsibility of having employees. The client will l maintain control of hiring, managing, motivating, and  termination. The PEO takes on the remaining responsibilities of having employees that usually are out-of-reach for a payroll service or an HR administrator. Working with a PEO is a key step to building an effective and unique way of managing your most critical asset: your employees.

A PEO is much more than a payroll service or HR administrator. While payroll service providers may offer some elements of your HR, a PEO will take responsibility for the core functions and daily activities of managing employee-related tasks from HR support, negotiation with insurance providers, benefits administration, employee payroll services including tax payments, guidance, and advice on regulatory compliance and risk management, employee self-service technology, and more. Essentially, having a PEO for your business allows you to focus on your core business knowing that you have a team of HR experts to handle the operational activities associated with having employees. 

How a PEO Works

Businesses often have questions about how a PEO works. In most cases, both the PEO and the client share discrete employment responsibilities when they enter into a PEO partnership. In such agreements, the professional employer organization will handle payroll taxes, benefits administration, HR compliance, technology, and maintaining workers’ compensation coverage. 

The PEO leaves you the responsibility and time to manage your business operations like products, services, and customers by handling human resource functions. The PEO also assists you with employee performance management, including hiring, promoting, and terminating decisions. A great PEO will help you respond favorably in a dynamic and unstable labor market.

What A PEO Can and Can’t Do for Your Company

Many people are concerned that working with a professional employer organization will result in losing control of their business. The fear is that leaving the HR-related functions to an outsourced party will compromise the hiring process and the employee relationships. However, the reality is that partnering with an expert organization to manage your HR-related tasks and provide human resources advice is one of the best things you can do for your business.

When partnering with a professional employer organization, you essentially formalize and standardize your hiring and recruitment processes, offload your repetitive HR tasks, and have access to HR expertise. Your PEO possesses the skills, knowledge, and market expertise to take care of your human resources activities so you can focus on growing your business. 

Tapping into the HR functions of business process outsourcing helps you to focus on the bottom line with peace of mind that you have HR experts providing support and services for your employees.

What A PEO Does

  • Comprehensive HR-related tasks. A professional employer organization handles complex HR-related tasks such as HR procedures and policies, payroll management, employee benefits administration, risk management, HR compliance, learning management, and time management.
  • Reduce liability. Outsourcing HR services reduces liability for payroll taxes, wage payments, federal and state labor laws compliance, and state unemployment taxes, especially with a certified PEO (CPEO).
  • Turnover. A professional employer organization reduces employee turnover by providing better benefits, employee support, and employee onboarding.
  • Employer attractiveness. With better negotiating power to provide employee benefits and services, a PEO can make working for your business a more attractive proposition for new employees and help to retain current employees.
  • Time-saving. A professional employer organization saves you time to focus on the growth and day-to-day operations of your enterprise. If you already have HR resources, a PEO allows your HR team members to focus on higher-value activities and leadership. 

A PEO assists you with problems and issues in human capital planning that may otherwise feel overwhelming. HR outsourcing through a PEO helps you more effectively manage your HR functions, streamlining processes and building effective employee support.

What A PEO Doesn’t Do

  • Does not take control of your business. A professional employer organization is not interested in your business affairs. A PEO provides human resources support and services to employees. There’s no need to worry about losing control of your business or your employees.
  • Does not supply labor. Outsourcing your HR to a PEO is about HR functions, support, and services for your employees. A PEO gives your organization access to experienced professionals who work in human resources every day. Some PEOs include support for attracting and retaining talent, however, a PEO is not an employment agency.
  • Does not make hiring and firing decisions for you. A professional employer organization doesn’t make hiring and firing decisions for you. Instead, they provide support and services that free up your time to build your company culture and manage employee performance and advancement opportunities for your employees. 

By entering into a joint agreement with a professional employer organization, you position yourself to attract and retain better employees to grow your organization and free up your time to focus on that growth. 

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Interested in a PEO partner for your business. Contact HCC and we’ll help you simplify being an employer.

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Benefits of Partnering with a PEO for Your Business

Business owners looking for a solution to their increasing HR burden can find relief by partnering with a PEO. The unique framework of a PEO means it can offer businesses benefits that other HR solutions can’t.

A variety of businesses can experience the benefits of PEO partnerships.

  • Any business struggling to keep up with its HR burden.
  • Small and medium-sized businesses that struggle to offer cost-effective benefits and attract top talent.
  • Startups that need to devote more time and resources to core business activities.
  • Nonprofits that need help ensuring their organizations are as efficient and compliant as possible.
  • Businesses operating in industries that traditionally have a high regulatory burden or high employee turnover.
  • Any business interested in saving operational costs while improving KPIs and employee satisfaction.

A PEO makes it easier to pay employees and taxes by performing all of the functions of a payroll administrator, from withholdings to direct deposits. A PEO certified by the IRS, also known as a CPEO, will also handle all of your employee tax payments as well. The CPEO will send the tax payments to the IRS and will be responsible for filing employment tax forms.

If you face competition for talent, a PEO can help you offer great benefits at a lower rate. The unique nature of your co-employment relationship with a PEO means you can offer your employees quality coverage at competitive rates for larger businesses. This is because when PEOs negotiate with insurance providers they bring bargaining power by leveraging the total number of employees from all of their clients so they can secure more favorable benefits than a small organization can on its own.

Being able to offer better employee benefits is just one reason a PEO can help you lower employee turnover. Employees working for PEO-partnered businesses report greater satisfaction, according to McBassi & Company, an analytics and research firm. The survey found that employees at PEO-partnered businesses had more confidence in their employer’s HR practices and business success factors, such as innovations, growth, and superior service. As a result, turnover among PEO-partnered businesses was almost 20 percent lower than national rates of turnover.

A PEO has a team of HR experts whose core responsibilities involve staying abreast of the latest federal and state employment regulations. Partnering with a PEO means you have an entire team devoted to keeping you compliant. A survey by the National Small Business Association found that owners spend “more than 80 hours per year meeting requirements.” And when they make a mistake, the average fine is just over $30,000. With a PEO, you have regulatory compliance experts on your team, keeping you compliant and reducing your risk.

What Are The Pros And Cons of A PEO?

When considering teaming up with a third party for HR services, you have several options. These options each have pros and cons. A PEO, a payroll company, or an HR administrator such as an HRO or ASO, may look similar on the surface. They are, in fact, very different.

HRO stands for “Human Resources Outsourcing.” As the name suggests, an HRO allows you to outsource some or all of your HR tasks. The HRO will offer a la carte services. The downside of an HRO is that you are still responsible for decisions surrounding the minutiae of your human resources administration. You’ll still need at least one expert on staff who can make these decisions. Another disadvantage is that your company won’t enjoy lower costs for benefits you may see when you partner with a PEO.

An ASO is a cross between an HRO and PEO. ASO stands for “Administrative Services Organization.” Unlike an HRO, an ASO will administer all of your HR tasks. But unlike a PEO, an ASO does not provide workers’ compensation or liability coverage. Also, partnering with an ASO will not help your company save money on benefits coverage and does not share in any of the risks of having employees. .

Partnering with a professional employer organization offers more pros than cons for business owners, startup founders, nonprofit executives, and others. The advantages of using a PEO range from tax reporting to benefits procurement, regulatory compliance, and so much more. The PEO will administer all of your HR functions including onboarding, employee administrative support and regulatory compliance. A PEO will provide payroll services and withhold employees’ taxes and employment tax liabilities. A PEO will also take care of the yearly tax reporting and workers’ compensation insurance.. Your company will benefit from partnering with a PEO to handle many of the aspects associated with having employees.

Save Money with a PEO

You’ll enjoy cost savings when you partner with a PEO. A study conducted on behalf of the National Association of Professional Employer Organizations (NAPEO) found that businesses enjoy a cost savings of 27.2 percent when they partner with a PEO. According to the study, the average cost savings from using a PEO is $1,775 per year per employee, which also reinforced the findings of earlier research, again showing notably lower employee turnover, higher rates of both employee and revenue growth, and enhanced employee benefits offerings.

Partnering with a PEO will help you get lower rates for group insurance. Your PEO benefits specialist will leverage the PEO’s larger size, meaning you get better rates for your company. Small businesses that partner with a PEO can save up to 40 percent on their health insurance premiums, according to NAPEO.

You may find the advantages far outweigh the disadvantages of using a PEO. According to the NAPEO, businesses that use a PEO grow 7-9 percent faster. They experience lower employee turnover rates and are 50 percent less likely to go out of business.

Get Better Group Insurance with a PEO

When the Affordable Care Act rolled out in 2010, employers saw a 40 percent increase in insurance premiums. Over the next ten years, healthcare premiums increased another 54 percent, according to the Kaiser Family Foundation. In 2020, the average health coverage for a family cost $21,342.

The Affordable Care Act also gave employees insight into the high cost of healthcare. The pandemic drove this point further in employees’ minds. As a result, good benefits are more important than ever for employee retention. More than three-quarters of employees say that benefits are an important part of their overall compensation. Half of employees say they’d consider taking a new job for better benefits.

Insurance costs for small to medium-sized businesses tend to be considerably higher than what large corporations pay. In the past, you may have been forced to provide your employees with less-than-stellar benefits. But partnering with a PEO can lower your costs and provide better options. This is because the PEO negotiates with insurance companies for coverage across all of their clients as a larger group. You get to pay rates similar to the big corporations when you have PEO group insurance.

Increasingly complicated regulations also increase your administrative costs for health care benefits. An in-house HR team must spend more time ensuring your company remains in compliance. Additionally, an in-house HR team often becomes a sort of middleman between the insurance provider and the employees. When issues arise, your PEO can help to solve employee issues.

Having a PEO Process Payroll, Taxes, and Reporting

Payroll administration demands hours that could be spent growing your business. From direct deposit information to time tracking and withholdings, payroll administration is essential to take care of your employees. Under this arrangement, the PEO is able to withhold employee federal and state taxes. The PEO then pays the government the withholdings. 

But what if your PEO fails to forward employment taxes to the IRS? Some unfortunate companies discovered a significant disadvantage of using a payroll service provider who failed to pay the IRS. With other payroll providers, you are still the primary employer liable for employment taxes, in the eyes of the IRS.

That’s why you need an IRS Certified Professional Employer Organization when it comes to tax payments and reporting. A CPEO is certified by the IRS, and undergoes financial audits and background reports, among other qualifications. Most importantly, once a PEO becomes certified as a CPEO, they assume liability for employment taxes. In the eyes of the IRS, the CPEO is on the hook if it fails to pay your employment taxes. Less than 10 percent of PEOs in the US is certified. HCC was one of the first professional employer organizations in the US to be recognized as a CPEO.

The PEO will also help handle many of the administrative tasks associated with workers’ compensation.

How Much Does a PEO Cost?

Before you decide to purchase PEO services, you should understand how much money and time you’re spending on in-house employee administration. The Small Business Administration says the cost of an employee is up to 1.4 times his salary when you include recruitment, benefits, and taxes.

The time you and your team spend on payroll and HR-related tasks is a little tougher to pin down. A survey by the National Retail Federation found that 69 percent of small business owners feel “overwhelmed by regulations, rules, and mandates such as labor regulations, health care mandates, tax codes, and safety guidelines.”

The PEO will relieve you of the administrative burden of HR-related tasks. A PEO  also has the expertise to navigate the regulations, mandates, tax codes, and safety guidelines that, frankly, take too long for any layperson to unravel. Your PEO employs a team of HR experts who can navigate the complexities of the Affordable Care Act. They’ll also field questions from your employees. Your PEO will also stay on top of the ever-changing regulations.

Remember, PEO clients on average enjoy a 27.2 percent return on their investment. A PEO can likely negotiate better rates for all of your employee benefits. Companies that use a PEO experience lower turnover and higher growth. But a PEO may also shield you from unexpected trouble.

Partnering with a PEO provides many benefits. From being able to focus on your core business activities without having to take on the administrative HR burdens to outsourcing your HR compliance issues, workers’ compensation laws, and employer liability issues, a PEO will provide expert support as your HR partner.

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Find out if a PEO is right for your business. Contact HCC and we’ll help you simplify being an employer.

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How Does a PEO Work?

Running a small or mid-sized business requires wearing many hats. Smart business leaders find relief from the challenge of taking on too much to do by focusing on core business activities that generate growth and outsourcing other support services like Accounting, IT, and HR. 

Partnering with a PEO helps you avoid investing valuable time and resources in essential business functions that are not part of your core offering. You can benefit your business’s bottom line and overall efficiencies by partnering with a PEO to process payroll, obtain and administer employee benefits, manage risk and compliance issues, and support human resources administration. Whether your business is a start-up, a small business, or a non-profit organization, you should not have to sacrifice quality HR services and benefits that are often only accessible to larger organizations. 

A PEO partnership is a seamless extension of your business and provides effective and immediate HR solutions for you, your employees, and your business.  While HCC’s PEO solution includes the services you would expect from a PEO, we offer much more, including a technology portal to access important human resource information in real time, a learning portal for employee career growth and regulatory training, and even hiring and performance management solutions, all in one place. 

Payroll Processing

Payroll processing can be time-consuming and complicated, especially if you have employees in various states. This has been even more complicated with the explosion of remote working. When you use a PEO to process your payroll, it is processed safely, securely, and electronically and includes all federal, state, and local withholdings. 

The benefits of partnering with a certified PEO (CPEO) are that a CPEO is certified by the Internal Revenue Service and is obligated to a higher level of service for your payroll services, including: 

  • Establishes requirements that tax payments to the IRS be audited as to their timeliness and accuracy.
  • Requiring a $1 million Surety Bond to ensure taxes are paid on behalf of clients
  • Protecting PEO clients by explicitly stating that CPEOs are solely liable for taxes paid to worksite employees
  • Allowing HCC to pass through to each client certain federal tax credits they earn. Examples include research, work opportunity, and empowerment zone tax credits.
  • Eliminating the potential for double taxation of FICA and FUTA taxes when a business enters a PEO relationship during the calendar year

When it comes to payroll processing, there is more than just paychecks, withholdings, and reporting. Make sure you know the difference between CPEOs, PEOs, and payroll service providers so you can choose the best option for your business. 

Benefits Administration

PEO services also include procurement and administration of employee benefits. Every business offers a unique benefits package, and a PEO will help you develop a long-term strategy for your employee benefits that include identifying, obtaining, and administering more affordable employee benefits that help you attract and retain better talent. 

PEO Benefit services can include: 

  • Healthcare 
  • Dental
  • Vision
  • Life Insurance
  • FSA & HSA
  • Voluntary Benefits 
  • 401(k) plan administration
  • Leave of Absences
  • Workers’ Compensation Issues
  • COBRA 
  • ACA Reporting

If this seems complicated, it is. Fortunately, the HCC team brings expertise to help you find the right employee benefits to meet the unique needs of your workforce. In addition, HCC will handle the benefits administration whether it is with employees or vendors. 

HR Support 

Another benefit of a PEO is that businesses have the administrative support they need to offer HR services to their employees at a fraction of the cost of an in-house employee. In addition, a PEO will manage all the important HR details and guide your human resources services to simplify being an employer. 

Expert advice and assistance for employee-related issues can include: 

  • Understanding employment regulations that affect your business
  • Support for labor law and employment questions that arise 
  • Onboarding/I-9/E-Verifications
  • New hire enrollment and program changes
  • FMLA/ADA Compliance
  • Employee Handbooks
  • Harassment Avoidance including Annual Training
  • Training Programs
  • Progressive Discipline Programs and Support
  • Exempt & Non-Exempt Classification Determinations
  • Development of Company Culture
  • Assistance in Attracting & Retaining Top Talent
  • Documentation Support (Job Descriptions,  Performance Management, and Company Policies)

Our human resources consultants have decades of experience and provide guidance and support in an array of difficult situations. 

Regulatory Compliance & Risk Management

HR Regulatory Compliance and Employment laws are constantly changing, and managing these regulations can be daunting. These mandates are complicated and time-consuming resulting in companies struggling to keep up to date. As a result,  many businesses use a PEO to leverage expertise and provide the appropriate and up-to-date guidance needed for their organization’s compliance responsibilities. 

A PEO can provide HR regulatory expertise and support that will help you manage a variety of challenges, including: 

  • Regulatory Compliance Issues
  • Risk Management
  • Labor Law compliance assistance and guidance
  • Employment Practices Liability Insurance (EPLI)
  • Wage & Hour issues (FLSA)
  • Workers’ Compensation
  • Lawsuits and Audits

By following HR best practices and working in conjunction with HCC as your PEO partner, we help you manage your legal fees and costs if a claim arises. For clients who adhere to our expert recommendations, HCC will assume responsibility for paying the  Employment Practices Liability Insurance (EPLI) deductible in the event of a claim. That’s a promise you won’t get from anyone else!

Additional Services To Help Your Business

Payroll, Benefits, HR Support, Regulatory Compliance, and Risk Management are among the primary reasons businesses use a PEO. However, the benefits of a PEO can extend well beyond these core services to provide additional benefits to your organization. As an example, at HCC, we developed partnerships with companies that can help you in the areas of Accounting and Bookkeeping Solutions, Talent Acquisition and Recruiting Services, Background Screening and Drug Testing, Compensation Management, Work Opportunity Tax Credits (WOTC), and Employee Retention Tax Credits (ERTC) assistance, and filing services. 

Partnering with a PEO can substantially benefit your business. Knowing what to look for in a PEO will help you find answers to additional questions about the benefits of a PEO. 

Choosing the Right PEO for Your Needs

When determining what to look for in a PEO, start by verifying the PEO is certified by the IRS. Known as a CPEO, these organizations are required to undergo strict IRS auditing and reporting standards. Only a CPEO can take on liability for handling your employee tax withholdings and payments to the IRS. Without that certification, you could be on the hook if the IRS doesn’t receive the tax payments from your PEO. HCC is an IRS-certified CPEO.

Ask the PEO how it will help you resolve issues when they arise. When employees have questions, will they be able to speak with someone at the PEO? Or will they be directed to an impersonal call center? Will the PEO assist you if you find yourself in the crosshairs of a regulatory group?

At HCC, we offer access to a dedicated team of experts in all things HR-related. When you or your employees have a question, the staff at HCC are only a phone call away. Let’s face it,  most companies have HR-related issues that arise. At HCC our clients are encouraged to call us for guidance. In fact, if the client seeks our advice and follows it, yet the employee brings legal action, HCC will cover the Employment Practices Liability Insurance deductible. To the best of our knowledge, we are the only CPEO that does this.

When you look for a PEO partner, make sure you have answers to the following: 

What are you paying your PEO partner and how can you be sure you are not being overbilled? 

Look for transparency with PEO billing. Avoid bundled billing where all taxes and fees are expressed as a single percentage of payroll. A good PEO partner will detail all these line items for every employee each pay period, making it easy for you to be sure you’re not overpaying. 

In addition, this approach allows you to ensure that the limits for employer taxes (FUTA, SUTA, FICA – Social Security) are being observed. 

Finally, be sure that you are receiving the employer’s share of tax savings for any benefit premiums paid. These items are easy to overlook but can amount to significant dollars if not handled properly by your PEO partner.  

What are the pros and cons of large group health plans through the PEO?

Bigger isn’t always better. Large group health plans may be better or worse for your group, depending on a number of factors. 

  • Age of your employees
  • Overall health of your group
  • How well the risk of the PEO large group plan has been managed? 

Ideally, look to partner with a PEO that has the flexibility to offer options that also include individual group plans for your organization. This helps you provide the best coverage for your employees at the right price.

What is EPLI coverage and why should I care about it?

Employment Practices and Liability Insurance (EPLI) exists to mitigate financial exposure for employers. This exposure comes in the form of things such as employee lawsuits or EEOC complaints. Unfortunately, filing lawsuits or complaints against employers may be done by disgruntled employees at little to no cost to them. EPLI caps the exposure for employers by paying damages or judgments after a deductible is met. With HCC, not only are you protected by our EPLI coverage, we’ll even cover the deductible when you follow our guidance in these types of situations. This saves you thousands of dollars when situations like this occur.

How can you determine the effectiveness of the PEO’s service model and how do employees get timely answers to questions?

The right PEO partner should be able to identify what team members in their organization will assist you and your employees before you begin working with them. Be sure to confirm that you’ll have direct contact information for these team members and not 800 numbers or group email addresses. Just as importantly, be sure each of your PEO team members has expertise in their respective areas (payroll, benefits, HR, etc.). Employment is far too complex for a single person to have all the answers.  

How can you avoid being stuck in a contract if the PEO doesn’t live up to its promises?  

Find a PEO partner that is willing to financially back up their service claims. At HCC we offer a guarantee for every new customer. In the first three months, if you determine we aren’t living up to your expectations, you’re able to exit our working agreement early. In addition, we’ll refund 50% of the fees paid up to that point in our working relationship.  

Also, after the first year, our contracts convert to month-to-month agreements. We believe if we can not hold you with our quality HR services you should not be stuck in a relationship that is not working for you. 

Does the PEO have a lot of turnover in their staff?

Turnover within your PEO should concern you as the client. It is disruptive to your business and it means that you constantly have to retrain the PEO’s staff while they learn about you, your employees, and your business.

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Find out why Human Capital Concepts is a better choice for your business by contacting us at [email protected]. Or call 800.419.4037. __________________________________________________________________________

Why a CPEO May Be Right for Your Business

A Professional Employer Organization can offer companies the expertise of a full-service HR department so that company leaders can focus on core business activities without the complications of payroll, benefits, compliance, administration, and other HR challenges. It’s a great choice for many businesses, startups, and nonprofit organizations. Statistically speaking, companies that partner with a PEO are more likely to grow their business faster and have lower employee turnover.

Consider working with a Certified Professional Employer Organization, or CPEO. A CPEO is a PEO that has received a certification provided by the Internal Revenue Service. Not every PEO will become a CPEO. In fact, less than 10% of PEOs have taken the rigorous steps required to meet and maintain the status of a CPEO. Once certified as a CPEO the former PEO has been given recognition by the IRS that the company is handling payroll taxes in a proper manner. The CPEO is maintained by complying with stringent requirements on a quarterly and annual basis. 

  • Once a quarter an outside accounting firm audits client tax payments made to the IRS. 
  • Annually a complete audit of the financials of the CPEO must be completed and provided to the IRS. 
  • In addition, the CPEO must maintain a bond, insurance, and key leadership must be in good standing with the IRS.  
  • Not only must the taxes be paid properly and on time but the CPEO must be able to demonstrate financial wellness each quarter of the year and on an annual basis. 

A CPEO invests the time, expertise, and expense to earn and keep the certification to assure their clients that they have the right partner for their company.

A CPEO must meet the strict auditing and reporting standards of the Small Business Efficiency Act (SBEA) and assume financial responsibility for federal employment tax payments for its eligible clients’ worksite employees. Federal payroll tax liability payments are also guaranteed as added protection. In the past years, there have been payroll companies and PEOs that have not paid client taxes and then walked away with their client’s tax money. As a CPEO, once the client pays the CPEO, the client is not liable for taxes, the CPEO is. With more client confidence for business leaders considering a co-employment relationship, working with a CPEO provides an IRS-certified level of assurance for compliance and tax liability that you don’t get from other payroll providers or professional employer organizations. 

If you engage a PEO after the beginning of the calendar year, FICA and FUTA taxes are legally required to be reset and clients are potentially required to pay those taxes because of the reset. With a CPEO, those taxes are no longer reset, so there is no repayment requirement. 

As a Certified Professional Employment Organization, HR solutions providers serving as a CPEO must meet criteria that include: 

  • Bonding: Maintain a bond equal to five percent of the CPEO’s federal employment tax liabilities for the previous year (up to $1 million). 
  • Background Reports: Employees of the CPEO responsible for making the tax payments are required to complete a comprehensive background report.
  • Annual Audits: Comprehensive financial audits prepared by a CPA are required by the IRS to maintain CPEO qualifications.
  • Annual Fees: Annual certification fees are required of a CPEO.

With co-employment, a CPEO must adhere to local, state, and federal laws and regulations. Look for a PEO that delivers more than just payroll, benefits, compliance, and administration. If and when an HR issue arises, how available is your PEO to help resolve your problem? Some PEOs rely on call centers to filter calls and transfer issues or simply offer “call back” services to address employee issues. Make sure you get reliable and expert advice to resolve your issues and avoid compliance risks. 

As a CPEO, HCC provides guidance and assistance to make sure your policies, procedures, and practices help you stay compliant. We are the only CPEO, PEO, or payroll company that backs our expertise by providing an employment practices policy, and pays the deductible when the client follows the guidance of HCC on a compliant outcome. Our goal is to let you concentrate on growing your business and let us help with employee matters. 

At HCC, our individualized care and expertise from a dedicated team of experts across payroll, benefits, human resources, HR information systems, and retirement planning provide direct access to dedicated team members for answers to questions. HCC is focused on providing better service and better expertise supported by our investment in systems and people. We resolve both basic and complex matters with accuracy and expediency. 

Being an employer isn’t getting any easier. The challenges of the past few years have complicated what was already a complex aspect of running a business. HR challenges now run the gamut from recruiting during the Great Resignation to implementing a hybrid workforce. Additionally, employers must still manage evolving compliance laws and increasing benefits costs.

Business owners looking for a solution to their increasing HR burden can find relief by partnering with a CPEO. CPEOs offer strategic guidance and expert advice on human resources policies, procedures, services, and support, ensuring that you have peace of mind as you grow your business.

The unique framework of a CPEO means it can offer businesses benefits that other HR solutions can’t.

If you’re struggling to keep up with your HR, let HCC’s PEO help. We serve small and medium-sized businesses that struggle to offer cost-effective benefits and attract top talent. We support startups that need to devote more time and resources to core business activities. At HCC, we help businesses and nonprofits that need help ensuring their organizations are as efficient and compliant as possible. Let us help you. Contact us via email or call 800.419.4037 to get the conversation started.