Advantages of Working with a PEO

As an Employer it can be very complex determining the advantages and disadvantages of outsourcing to a Payroll Service Provider (aka Administrative Services Organizations, or ASO) or Employee Leasing Company.  When outsourcing the payroll to an ASO or taking the payroll in-house all of these duties and liabilities are completely your burden and the ASO assumes none, because all the filing of payroll taxes are used with your federal ID tax number and your State Unemployment ID number.  It’s your responsibility to keep up to date with the ever-changing labor laws, Workers’ Compensation Audits & Liability, Claims Management, Payroll Tax Liability, INS Form I-9’s and Human Resource. All of the aforementioned items are here to stay and will only increase.

Having been in the Employee Leasing industry since 1995, we have extensive experience with the pros and cons and have gotten to know the players in the (ASO) and Employee Leasing arena very well. No doubt when comparing the administrative cost of ASO vs. Employee Leasing, the Employee Leasing administrative cost will be a little more. This is because the Employee Leasing Company assumes most of the risk and liability, whereas the ASO does NOT assume any as listed above.

These are some of the reduced tax liabilities and benefits you have under the Employee Leasing arrangement and the Workers' Comp master policy that you do NOT get with a Payroll-Only Service, or ASO.

  • Lower workers’ compensation exposure.
  • No workers’ compensation deposit.
  • No workers’ compensation year-end audits.
  • No workers’ compensation administration.
  • Relief from fraudulent workers’ compensation claims.
  • Workers’ Compensation Limit of Liability Coverage 1,000.000.00 / 1,000,000.00 / 1,000,000.00
  • No withholding tax deposits, penalties and interest.
  • No 940 and 941 quarterly and annual reports.
  • No Federal Unemployment Tax (FUI) filing.
  • No State Unemployment Tax (SUI) filing.
  • No State Unemployment Administration.
  • No health benefit administration.
  • No Pay-Time-Off (PTO) Administration
  • Relief from and/or compliance assistance with government agencies rules an programs such as:
  • Cobra (Consolidated Omnibus Budget Reconciliation Act)
  • ADA (American Disabilities Act)
  • FMLA (Family and Medical Leave Act)
  • IRS (Internal Revenue Service)
  • DOL (Department of Labor)
  • DOT (Department of Transportation)
  • Title 7 (Discrimination and sexual harassment)
  • Section 125 (Pre-tax Cafeteria Plans)
  • Expanded employee benefits and options:
  • 401(k) Plans
  • Medical Plans (HMO, POS, PPO)
  • Vision Care
  • Dental Coverage
  • Life Insurance
  • Section 125 Cafeteria Plan
  • Payroll Tax liability
  • Workers’ Compensation
  • In-house safety program
  • No banking fees.
  • Asset protection for business owner through reduced liability.
  • Increased employee productivity.
  • Reduction in employee turnover.
  • Predictable labor costs.
  • Increased time for revenue producing instead of employee management.
  • Lower booking and accounting fees.
  • Reduction in legal fees due to reduced liability.
  • Full Human Resources Representative support.