The purpose behind partnering with a Professional Employer Organization (PEO) is so businesses can outsource employee management tasks, including HR administration, payroll and benefits, along with recruiting and training, risk and safety management, and worker’s compensation duties. A PEO provides comprehensive HR solutions for both small and mid-size businesses.
When an employer begins working with a PEO, they enter into a shared employment relationship whereas the PEO will co-employ the client’s work site employees, essentially becoming the “employer of record.” If issues arise out of this arrangement your client should have peo insurance as a way of insuring against any claims from employees or its client relationship.
Not all PEO arrangements function the same
This arrangement is made under contract, using a client service agreement (CSA). The employer retains responsibility for product development and production, business operations, marketing, and sales. In many instances, the client and the PEO will share in certain responsibilities, which can be determined in their CSA.
Your clients will benefit in plenty of ways under such an agreement. For one, they’ll spend little time dealing with the processing of payroll and many aspects of employee paperwork. This means they’ll be freed up to spend more time on growing the business by alleviating the need to play a part in the administrative roll.
The Peo will also be able to provide high-quality, comprehensive employee benefits that couldn’t be secure without their involvement, often without clients’ experiencing astronomical costs in order to do so. Many industries must also deal with ever-changing regulations with a need to maintain compliant. The PEO will help them to stay in compliance with the often-confusing government regulations that emerge from time to time.
One mustn’t discount the importance of PEO insurance benefits for major medical coverage, as well as dental, and vision insurance. The PEO can take advantage of a larger group discount than any small company can, as it is responsible for a larger pool of employees. This includes voluntary benefits (life, critical care, for example), savings on prescription medication, 401K plans and much more.
Still, one must also account for claims arising from employee practice liability issues and other employer/employee concerns, making peo insurance the missing part of the puzzle.