What is a PEO Broker & Why Your Company Needs One

Other small and medium-sized business owners keep referring to a “PEO” that helps them with administrative duties and legal compliance. You have a small or medium sized business, you love your staff and employees, and you believe they deserve the best you can give them, but you feel overwhelmed by paperwork. Not to mention, you started this business because you are passionate about the work you do, not these administrative tasks: payroll, benefits packages, insurance, Human Resources requirements – among other things – and you do not feel confident in your ability to manage them.

You know these things are important, and of course you want to provide your employees with the best benefits you can, but these complex administrative requirements keep you from focusing on what originally inspired you to start a business in the first place. If there is a resource out there to help manage payroll and benefits, and it will free your mind and help your employees, you know you need guidance navigating if and which PEO brokerage is the right fit for you and your company!

So, what is a PEO Broker?

A Professional Employer Organization, or “PEO” is an entity which operates in harmony with corporations, organizations and businesses to assist in the management of employee benefits packages, payroll, and other administrative and Human Resources responsibilities. Because of the nature of a PEO, it is sometimes referred to as a co-employer. There are more than 900 PEO companies in the United States, and this number does not include international contenders.

A PEO brokerage or broker is an individual or firm which represents and manages many different PEOs and brokers for several different businesses or companies, such as our team here at AEIS.  In short, these PEO brokers help their clients determine if they are a good fit for a PEO and then match their clients with a PEO. The client is you, the hardworking small or medium size business owner. These firms exist to garner a thorough understanding of the several hundred types of PEOs available, as well as learning your business needs. In fact, these firms operate by maintaining a focus on the specific needs of their individual clients. They will help you decide if you want to go directly with carriers and payroll companies or bundle everything under a PEO. Ultimately, these PEO brokers create a market amongst the PEO companies to drive competition and keep prices low for their clients.

This is a huge benefit for business owners that do not have hours to invest in research for the 900+ United States PEO companies.

Is a PEO a person?

A PEO is a conglomeration of individuals, often individuals who are educated and experienced in accounting, customer service, Human Resources, law, and taxation. PEOs “pool” various types of insurance with some of the top carriers in the United States, and the PEO will add clients, like yourself, to these plans, this creates a group who can then receive lower rates than you could as an individual business on your own.

Further, as your business continues to grow, PEOs can assist you with time management, direct deposits, company accounts, and payroll tax deductions. A PEO is essential in ensuring you remain compliant and “in-the-know” about recent and ongoing strategies and employment laws, PEOs serve as protection against wasted time, potential fines, and penalties.

Why would my business need a PEO?

There are many reasons it benefits a business to partner with a PEO brokerage, namely: reducing costs, streamlining operations, hiring internationally, legal compliance and even employee termination all while reducing risk liability. Additionally, PEOs help by mitigating benefits costs and health insurance to relieve the business of some expenses. A PEO can be a great administrative assistant for the right company. There are some important considerations to keep in mind such as commitment because co-employment is harder to break than a typical vendor. Another one is renewals can be subject to higher rate increases than the fully insured health insurance market.

How Does a PEO work?

A PEO places a business’ employees on the PEO’s payroll. In this capacity, the PEO brokerage is the “employer of record” for the employees. These employees will still work for the business, they receive duties, tasks, responsibilities and assignments from the business, but the PEO administers benefits and paychecks.

In other words, you get to run your business while the PEO handles the administrative tasks. The PEO broker oversees this entire relationship with your business’ best interest in mind.

If you do not have a PEO, talk to a PEO broker today!

Moments ago you were asking, “what is a PEO broker?” Now you know, so the next question is “to PEO or Not to PEO?” PEOs are experts in deciphering which legal requirements apply to your business, and determining which paperwork is required to ensure your business complies with the law. As your business grows, PEOs can assist you so you can focus on your business and doing what you love.

Again, there are many PEO companies you may consider: Insperity, Rippling, Justworks, Oasis, Extensis Group – the list goes on. We know this is a daunting task, and that is why we are here to guide you every step of the way.

If you are still unsure whether or not working with a PEO brokerage is the best choice for you and your business, we understand, and that is why we are here. We encourage you to consider the time you could save by working with a PEO broker and utilizing a PEO for the benefit of you and your employees. We provide an opportunity for you to inquire about what all of this could mean for your business.

Follow the link below to begin a conversation with one of our experts, at no risk to you, to see just how helpful a PEO could be for you, your business, and your employees.

Contact us today to talk to an expert to learn how to streamline payroll, benefits, and compliance.