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Difference of PEO and Traditional Payroll and HR Outsourcing

Name: Difference of PEO and Traditional Payroll and HR Outsourcing
Uploaded: 2023-08-04T15:15:14+00:00
Duration: 58 s
Channel: Matt Vaadi
Description: In this segment, the speaker explains the co‑employment model used by Professional Employer Organizations (PEOs). The employer retains direct control…

4 Aug 2023 · 1 min

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In this segment, the speaker explains the co‑employment model used by Professional Employer Organizations (PEOs). The employer retains direct control over employees, including management duties and workplace safety, while the PEO assumes payroll administration, tax filing (W‑2s), benefits procurement, and basic HR services such as risk‑management consulting and handbook provision. By outsourcing these compliance‑heavy functions, the employer avoids the need to negotiate with multiple insurance brokers and reduces administrative burden.

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Sure. So it's the co-employment arrangement is, is what it's technically called. And what that means is that you as the employer retain control of your employee. You have the management responsibilities, you have the worksite safety and all that stuff. You have to be responsible for that. The PEO will actually do all the payroll administration. It will provide the benefits and it'll provide some risk management consulting, usually a handbook and some light HR. As part of the package. And then all the W-2s and all the tax filings are done by the PEO. So it takes a lot of the compliance-related stuff off your plate. And so that is the big deal. And you don't have to go out and procure benefits, you know, talk to multiple insurance brokers or whatever you have to do to find those benefits. The PEO will provide a suite of life, disability, health insurance, whatever, you know, vision, dental, whatever benefits that that PEO may offer.