If you’re on the hunt for a service provider to manage the administration of payroll, human resources, benefits and workers compensation you’ve likely stumbled upon two options: a PEO and an ASO.
At first glance, they appear to have the same business model – so what’s the difference?
PEO:
A relationship with a Professional Employer Organization (PEO) is a co-employment relationship, meaning that your PEO will become the employer on record for tax-related purposes. Because many companies may be utilizing the same PEO that you are, the PEO on paper probably has many more employees than you do, which provides you with stronger purchasing power when shopping for health benefits, retirement options, and other employee-related benefits.
Liability is shared through the co-employment relationship as well – which is a very attractive benefit for business owners continually concerned with payroll, workers compensation, risk management and EPLI. PEOs work harder to keep your organization within compliance standards, because at the end of the day any issue is their issue too!
ASO:
An Administrative Services Organization (ASO) is a very similar organization in that many of them offer the administration of payroll, HR, benefits, workers comp and more. However, there’s one major difference: a relationship with an ASO is NOT a co-employment relationship. Employees remain your employees.
Because employees are not employees of the ASO, employers have the ability to retain their own employee benefits, or have their ASO shop out and manage options for them. Without the purchasing power of a large organization with lots of employees on your side, you may have higher rates on services such as payroll, benefits, and workers compensation.
While ASOs lack some of the attractive benefits associated with PEOs, they tend to have administrative fees (per employee, per year) that are significantly less than PEOs – because the employer is only paying for the outsourced support of various employee management functions and the ASO is not assuming much liability.
Ultimately, selecting the right organization comes down to what your particular organizational needs are. Not every company is a good fit for a PEO, and not every company is a good fit for an ASO. At Employer Solutions Plus we represent vendors within both categories. After an evaluation of your company’s wants and needs, we then present the options that will work best for you.
To learn more, contact our team.
Background Checks: What an Applicant’s Credit Report Can Tell You
/in Background Checks, Hiring & Firing /by adminA professional background check will uncover a lot about your applicant. There are certain areas that will stick out like sore thumbs: past employers that are disappointed in this applicant, past encounters with the law … but there’s one thing that employers are often unsure of what to do with: the applicant’s credit score.
Here’s what a credit score can tell you:
As you can see, a credit score can often reflect the type of person you have in front of you or the situation that person is in. However, if you’re going to run credit reports you must follow the federal laws outlined within the Fair Credit Reporting Act (FCRA), which includes giving the applicant a fair warning of what you intend to look at (along with a copy of the report), and give the applicant an official adverse action notice if you decide not to hire them because of their credit report.
If you work with a PEO, we urge you to utilize their knowledge, tools, and expertise when it comes to background checks, so that your business stays within compliance. If you don’t currently work with a PEO, contact the team at Employer Solutions Plus for a trusted referral.
Can You Switch to a PEO After the New Year?
/in Cash Flow, Cost Reduction, PEOs /by adminThere are lots of vendor switches or new services contracts that begin on January 1 out of the convenience of having annual contracts, but in this article we’re addressing one particular type of services company: the PEO.
Whether you’re a company looking to engage in a PEO contract for the first time, or a company that already works with a PEO but is looking to make a switch, you are probably a little bit nervous about the transition. Is it going to be an administration nightmare? Do I have to wait until next year to engage in a new contract because there’s no time left in 2013?
In short, no. It’s not going to be an administrative nightmare, and contrary to common misconception, a new PEO contract can begin at any time of the year. If you’re unhappy with your current PEO or in immediate need of cost reduction, you really shouldn’t wait an entire year to correct your situation.
Employer Solutions Plus is skilled at analyzing and delineating current PEO contracts to ensure the easiest “exit strategy” possible. We review all payroll taxes to ensure that no amount of money has been put toward SUTA, Social Security, Medicare, etc. in advance, and that the amount of health insurance deductibles that have already been paid in 2014 don’t end up being forfeited.
We also work with a handful of PEOs that are willing to offer credits for taxes or benefits already paid if there is no way to ensure a smooth transition without overlapping or duplicated costs. So, while the most convenient time of the year would have been January 1, know that you are not out of luck!
Employer Solutions Plus can identify the most convenient (but also the most cost-effective) time frame for making the switch! Call us at 727-698-6207 if you’d like some more information.
The Most Important Question to Ask When Shopping for a PEO
/in Cost Reduction, PEOs, Vendor Selection /by adminOne of the biggest mistakes that business owners make when shopping for a PEO is selecting the one with the best overall price tag. The most important question to ask before signing a contract is “Will you ‘unbundle’ your billing?” Breaking down the “all-encompassing plan” will permit you to know exactly what you’re paying for, and how much – making the comparison from one PEO to another a lot easier.
We know that analyzing proposals takes time away from your busy day and profitable business activities, but forgetting to ask this simple question and simply selecting the best-priced can cost you in the long run!
At Employer Solutions Plus, our dedicated staff of PEO experts can prepare a custom analysis of proposals for you upon request and we’ll break down each and every component of the PEOs’ proposed contracts. Benefits to benefits, payroll to payroll, admin to admin – what you’re paying for should be clear!
Clients of Employer Solutions Plus save themselves time, money, and stress. Call today to take the guesswork out of PEO cost analysis: 727-698-6207.
Can I Keep My Workplace Benefits Plan if I Engage a PEO?
/in Benefits, Health Insurance, PEOs /by adminWhen it comes to benefits particularly, many companies “win” through the co-employment relationship. By pooling together employees from multiple client companies, PEOs bring forth tremendous purchasing power – often passing along low rates, great options, and additional benefits you may not have previously been able to offer your employees.
But, what if you’re a young and healthy office that already celebrates low health insurance rates? Whatever the PEO is offering you may actually cost more than what you have in place for your employees.
Or, what if your current plan has extremely robust benefits such as vision, dental, and coverage for various specialists? Can you carve out the cost of benefits from a PEO contract and leave your existing plan in place?
All PEOs are different, but in most cases the PEO will consider it and it’s absolutely worth asking. If they are not willing to take employee benefits out of the proposed contract, and you are beyond happy with your existing plans and prices, we recommend that you keep shopping for a PEO.
You don’t need to settle for a PEO contract that isn’t the perfect fit for your unique situation. If you proceed with the PEO’s proposed benefits plan, you may be paying for plans you won’t necessarily utilize or dropping a plan that your employees are really happy with – resulting in employee dissatisfaction.
Please contact Employer Solutions Plus if you’re having trouble finding the perfect PEO. We represent countless PEOs across the country, many of which don’t require signing on to their insurance plan if you’d like to keep your own.
How Do PEOs Work With You to Lower Workers Compensation Rates?
/in Cost Reduction, Risk Management, Workers Compensation /by adminA great PEO will work with you in three distinct ways to accomplish this:
Hands-on Risk Management: In high risk industries especially, it’s important for risk managers to see the workplace and your ways of conducting business firsthand. Risk assessments help identify areas that are an “accident waiting to happen” or pose a potential threat to you and your employees. Did you know that the small task of employee hand washing (or lack thereof) is the single most cited factor in outbreak investigations? Your business needs to be equipped to stand up against aggressive lawyers in the event of a lawsuit. Your business may have overlooked areas that could result in a lawsuit or claim.
Safety Programs: PEOs can design a workplace safety program, and even organize and conduct safety trainings to ensure that employees are properly educated, aware of potential harms, and perform work more cautiously. It has been proven that when employees fully understand safety manuals and have resources (such as live demonstrations) available to them for additional help, workplace safety increases. Fewer injuries… fewer claims… fewer dollars to spend on workers comp!
Claims Management: Several claims against your business, and several lost claims, will undoubtedly increase your workers compensation rates. From an insurer’s eyes, you’re considered high risk. PEOs manage claims for several million workers across the country as part of their service to small businesses. They are experts in risk management and go to bat on behalf of your business if and when a claim arises.
Ask what types of safety programs would be implemented or enhanced by your PEO in order to lower the number of injuries or claims from your workforce, and be wary of the PEO willing to sign you on without a thorough analysis.
If a PEO is willing to sign on your company without a thorough analysis, this may be a red flag. PEOs should ALWAYS care about your workplace safety and the amount of risk you have.
To learn more about risk management, safety programs, claims management, and what the ideal PEO relationship should look like, contact Employer Solutions Plus.
Are Employee Handbooks Necessary for Small Businesses?
/in Employee Handbooks, Employees, Hiring & Firing /by adminEmployee handbooks are usually provided by employers and contain employment and job-related information that employees need to know such as recognized holidays (days off), company rules, grievance procedures, important resources and contacts, policies, and more. But is all of this information really necessary at a small business?
Employee handbooks are extremely important for small businesses and large businesses alike. Here are just a few reasons why:
Handbooks Protect Employers: Handbooks provide clear expectations to employees and create a culture where issues are dealt with fairly and consistently. If an employee has a dispute, but has previously received and signed a handbook that clearly stated the policy, the company will often be protected from a liability standpoint. For small businesses especially, a claim against the business can completely destroy your cash flow – it’s much better to be safe than sorry!
Handbooks Save HR Professionals Time: You may not have an HR professional on staff – perhaps the office manager or even you, the business owner, is in charge of managing the employees. When there’s a handbook to conveniently outline paid time off, holidays, vacation time, etc., you don’t need to explain (or email) the same information over and over again each time an employee inquires. Remind them to refer to their handbook!
While the employee handbook’s main purpose is to establish a convenient and clear line of communication, don’t forget the following disclaimers: the handbook can be updated at any time and it is not an actual contract. Employee handbooks should be reviewed and revised each year at a minimum, or whenever the company undergoes significant changes.
Do you work with a Professional Employer Organization (PEO) or an Administrative Services Organization (ASO)? If so, be sure to ask them if their services include complimentary employee handbook creation and updating. If they do not, or you don’t currently work with a PEO/ASO, contact Employer Solutions Plus for additional information and support: 727-698-6207.
Why Are PEOs in High Demand
/in PEOs /by adminAccording to NAPEO, in just one year (2010) the industry grew by $10 billion – shaping an industry that has $80+ billion in gross revenues each year and still has room to grow!
If you’re unfamiliar with the PEO business model you may be wondering why they are in such high demand among businesses of all sizes.
While PEOs are seen as business “life savers” for a number of reasons including but not limited to payroll support, improved benefits packages, and providing various forms of insurance, we believe the primary reason for this industry’s recent boom is based on shared liability and compliance.
As employment law and compliance experts, PEOs help protect businesses from:
Because employment law is full of time consuming and confusing fine print (that changes all of the time), and because many business owners do not have a law degree, it’s simply not worth the risk of operating out of compliance standards. The penalties could debilitate your organization’s cash flow.
In the past few months, we’ve seen even more businesses jump on board with PEOs because of healthcare reform in itself. Whether it’s a business owner with 5 employees, or 50, nearly every one of them is feeling perplexed. So, if you read this and think “this is me,” you are certainly not alone!
For organizations that do engage a PEO and “offload” compliance responsibilities, every other aspect of the PEO business model is simply icing on the cake. To learn more about the PEO business model, contact our team at Employer Solutions Plus.
I-9 Audits on Restaurants
/in Compliance, Hiring & Firing, HR Solutions for the Restaurant Industry /by adminI
t’s no secret that the hospitality industry experiences high turnover. Restaurants don’t often keep waiters or waitresses on staff for long periods of time (in comparison to other industries), because fact of the matter is that for many employees it’s just a part time job, a transitional period of their life, or a way to temporarily make a little extra money on the weekends.
It is for this reason among a few others that the hospitality industry has become an easy target for I-9 audits. With employees coming and going all of the time, keeping up with the paperwork can be a fulltime job in itself. Every restaurant owner knows that the I9 form needs to be completed (ensuring that their new employee is eligible to work in the US), but they may not be completing this form in a timely manner, or they may be waiting a few weeks to see if a particular employee will stick around.
This is a BIG mistake! Avoiding a minor administrative headache today or placing this task on the backburner can result in a big compliance violation in the event that you’re audited by the government. If your business is randomly selected for an audit, you could have as little as three days’ notice before documents have to be surrendered. If your restaurant is in violation, hefty (and sometimes debilitating) fines will follow.
So, what can you do? The first option is to always ensure your restaurant is operating in compliance. Although, for busy business owners, sometimes mistakes are entirely innocent and unavoidable; we make them by accident or we’re just not educated enough within one particular area of employee management.
The alternative chosen by many restaurant owners is to work with a PEO. If you visit the “HR Solutions for the Restaurant Industry” section of our blog you’ll see that PEOs come with many benefits beyond their help and expertise surrounding compliance and new hire paperwork. They’re able to bundle nearly all HR and compliance responsibilities under one cost effective umbrella to ensure that your business is run as effectively and efficiently as possible.
To learn more about PEOs operating within the restaurant industry, click here. If you have any specific questions, feel free to contact us at Employer Solutions Plus: 727-698-6207.
What Happens If My PEO Is Sold?
/in PEOs, Proposals /by adminIn most instances, the transition (if properly planned for and managed) from one PEO to another will be painless. However, this doesn’t mean you should sit back, relax, and fail to consider your options. It’s important to review all details regarding the new PEO in advance, as this timeframe is the PERFECT time to shop around.
Here are just a few things to consider…
The reality is that your new PEO set-up may not be the best fit or may not have the best pricing structure for your organization’s needs. If you’d like to explore your options, contact Employer Solutions Plus. Our team provides expert strategies in PEO selection as well as PEO transition.
The Differences Between a PEO and an ASO
/in ASOs, PEOs /by adminAt first glance, they appear to have the same business model – so what’s the difference?
PEO:
A relationship with a Professional Employer Organization (PEO) is a co-employment relationship, meaning that your PEO will become the employer on record for tax-related purposes. Because many companies may be utilizing the same PEO that you are, the PEO on paper probably has many more employees than you do, which provides you with stronger purchasing power when shopping for health benefits, retirement options, and other employee-related benefits.
Liability is shared through the co-employment relationship as well – which is a very attractive benefit for business owners continually concerned with payroll, workers compensation, risk management and EPLI. PEOs work harder to keep your organization within compliance standards, because at the end of the day any issue is their issue too!
ASO:
An Administrative Services Organization (ASO) is a very similar organization in that many of them offer the administration of payroll, HR, benefits, workers comp and more. However, there’s one major difference: a relationship with an ASO is NOT a co-employment relationship. Employees remain your employees.
Because employees are not employees of the ASO, employers have the ability to retain their own employee benefits, or have their ASO shop out and manage options for them. Without the purchasing power of a large organization with lots of employees on your side, you may have higher rates on services such as payroll, benefits, and workers compensation.
While ASOs lack some of the attractive benefits associated with PEOs, they tend to have administrative fees (per employee, per year) that are significantly less than PEOs – because the employer is only paying for the outsourced support of various employee management functions and the ASO is not assuming much liability.
Ultimately, selecting the right organization comes down to what your particular organizational needs are. Not every company is a good fit for a PEO, and not every company is a good fit for an ASO. At Employer Solutions Plus we represent vendors within both categories. After an evaluation of your company’s wants and needs, we then present the options that will work best for you.
To learn more, contact our team.