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A Professional Employer Organization Provides Comprehensive Administrative Relief

Professional Employer Organizations (PEOs) help small businesses manage and complete the administrative functions associated with running a business. Predominantly, the PEO company takes on payroll, payroll taxes, human resources, benefits administration, workers’ compensation, and regulatory compliance issues for the business owner or business manager.

Oftentimes, business owners think of HR outsourcing through a professional employer organization as only obtaining access to payroll processing. However, there are several major differences between standard payroll companies and PEO companies, which are:

Employers who join, stay!
  • A PEO company provides a wide range of administrative relief. The PEO company is equipped to handle all elements of administration, including: payroll administration, payroll taxes, benefits administration, workers’ compensation, human resources, and regulatory compliance.
  • The PEO firm takes on all IRS reporting, wage garnishments, and compliance requirements, so you are no longer on the hook for administrative mistakes.
  • Your business is grouped with our PEO company so it experiences greater buying power when it comes to benefits and insurances.

All of these benefits stem from the co-employment relationship between the business and the professional employer organization.

What is Co-Employment?

When a company selects the PEO administrative model they enter the co-employment (AKA employee leasing) agreement where the business owner and PEO firm share responsibility and liability for the business’s employees. As a result of the co-employment agreement, the PEO company technically becomes the employer of record. This allows the PEO’s HR and accounting experts to file taxes for employees and share liability with employers.

On the other hand, business owners entering into a co-employment relationship remain responsible for dictating ALL day-to-day responsibilities. They have 100% control of the worksite and fully manage all of their employees. The illustration below highlights the professional employer organization, business owner, and employee co-employment relationship:

The PEO relationship graphic 2

The most common PEO misconceptions

PEO relationship overview

Companies and business owners are hesitant to join a professional employer organization because of the perceived loss of control as a result of the co-employment agreement. This perception is false. Business owners and managers who work with a PEO actually have more control over their employees because they are less constrained by administrative tasks, and therefore are more able to actively participate in multiple aspects of their business.

The professional employer organization is not an intrusive partner for day-to-day managerial activities. Business owners and managers dictate the tasks of their employees, while the PEO ensures the accuracy and reliability of the company’s administrative obligations.

A PEO provides comprehensive administrative relief

Small businesses trust professional employer organization to provide the administrative relief that, would otherwise be a burden to handle internally. The administrative categories that a PEO assumes are:

  • Human Resources Administration – A professional employer organization provides small businesses with a complementary staff of HR experts. These experts can act as your sole provider of HR administration, or help your understaffed HR department take on the daily challenges of human capital management.
  • Benefits Administration – We offer and manage a wide-range of health, dental, and vision plans that help businesses  acquire and retain employees.
  • Payroll and Payroll Tax Administration – One of the most time-consuming tasks a company faces no longer needs to be a business owner’s problem. We provide employers with DCAA audited Deltek time and attendance systems for seamless and compliant employee tracking, accurate and timely paychecks and direct deposits, and manage all payroll tax administration.
  • Risk Management and Workers’ Compensation Policies – Protect yourself from the risk of workers’ compensation penalties by acquiring the help of risk management and workers’ compensation experts.

The XcelHR Value

At XcelHR, we understand that no two businesses operate the same way. Therefore, we provide a comprehensive suite of solutions that are uniquely catered to the businesses we work with, and ensure that the values of our clients are shared by our staff. The ultimate goal of our PEO service is to reduce the amount of time and effort business owners and managers spend on administration activities... so they can get back to growing their business. Our PEO serves as your strategic HR and administration partner that provides:

  • Administrative Relief: Complete relief from administration activities offering more time spent on core business activities.
  • Helping Businesses Compete: Competitive benefits packages and staffing opportunities that attract and retain a talented workforce.
  • Manage Compliance & Risk: Relief from risk management activities while ensuring compliance and a reduction of HR costs.
  • Expert Advice: Guidance from HR experts that are there to support and assist business owners.