Frequently Asked Questions:
PEO Referral Services - Phoenix PEO Locator &
Phoenix PEO Services
Q: Why HRO Associates, LLC?
A: HRO Associates, LLC was formed to consult with and assist businesses in choosing the correct
Phoenix PEO Locator and Phoenix PEO Services for their company. Instead of meeting with multiple salespeople from multiple PEOs and/or ASOs and /or Payroll companies, each of whom have the express goal of selling you their service (sometimes to a company's detriment), HROA has contracted with several of the leading HR outsourcers and can help you choose the right option for you.
Over time, HROA has also developed VAR relationships with other Human Resource products and services, in order to further enhance our capabilities to assist our
clients who use our PEO Referral Services.
Q: What is a PEO?
A: Professional Employer Organizations (PEOs) enable clients to cost-effectively outsource the management of human resources, employee benefits, payroll and workers' compensation.
Our Phoenix PEO Locator and Phoenix PEO Services clients focus on their core competencies to maintain and grow their bottom line.
Businesses today need help managing increasingly complex employee related matters such as health benefits, workers' compensation claims, payroll, payroll tax compliance, and unemployment insurance claims. They contract with a
company who provides PEO Referral Services to assume these responsibilities and provide expertise in human resources management. This allows
the
Phoenix PEO Locator and PEO Services client to concentrate on the operational and revenue-producing side of its operations.
Q: What is Co-Employment?
A: The PEO (not ASO) relationship involves a contractual allocation and sharing of employer responsibilities between the
company offering PEO Referral Services and the client. This shared employment relationship is called co-employment.
As co-employers with their client companies, PEOs contractually assume substantial employer rights, responsibilities, and risk through the establishment and maintenance of an employer relationship with the workers assigned to its clients. More specifically, a PEO establishes a contractual relationship with its clients whereby the PEO:
- Co-employs workers at client locations, and thereby assumes responsibility as an employer for specified purposes of the workers assigned to the client locations.
- Reserves a right of direction and control of the employees.
- Shares or allocates with the client employer responsibilities in a manner consistent with maintaining the client's responsibility for its product or service.
- Pays wages and employment taxes of the employee out of its own accounts.
- Reports, collects and deposits employment taxes with state and federal authorities.
- Establishes and maintains an employment relationship with its employees that is intended to be long term and not temporary.
- Retains a right to hire, reassign and fire the employees.
Both the Phoenix PEO Locator and Phoenix PEO Services company and the client company establish common law employment relationships with worksite employees. Each entity has a right to independently decide whether to hire or discharge an employee. Each entity has a right to direct and control worksite employees. The PEO directs and controls worksite employees in matters involving human resource management and compliance with employment laws, and the client company directs and controls worksite employees in manufacturing, production, and delivery of its products and services.
PEOs manage their employment liability exposure by monitoring and requiring compliance with employment laws, developing policies and procedures that apply to worksite employees, supervising and disciplining worksite employees, exercising discretion related to hiring new employees, and ultimately terminating worksite employees who do not comply with requirements established by the
PEO Referral Services company.
Q: What are the Benefits of
PEO Referral Services and ASO Services?
A: For your business, a PEO/ASO:
- Provides experienced professionals in HR, benefits, payroll and risk management.
- Assumes certain employment related liabilities (PEO only)
- Delivers professional assistance with compliance (payroll, OSHA, EEOC).
- Provides secure Internet access to payroll, benefits and personnel data.
- Provides access to professional HR guidance and materials.
- Manages claims.
- Supplies clear, easy-to-read and professionally written employee handbooks, policies, procedures and practices.
- Improves cost control.
- Delivers access to better benefits.
- Reduces turnover.
- Provides quality benefits and recruiting assistance to attract and retain the best employees.
- Provides you more time to focus on your bottom line.
- Gives you the opportunity to grow your business faster.
- For your employees, a PEO/ASO:
- Provides access to comprehensive benefits often previously unavailable - 401(k), Section 125 plan, comprehensive insurance benefits, Flexible Spending Plan.
- Delivers on-time and accurate payroll.
- Provides professional assistance with employment-related issues.
- Supplies easy-to-read employee handbooks, policies, procedures and practices.
- Enables more employees to receive statutory protection.
- Improves communication among and between employees.
- Offers up-to-date information on labor regulations, workers' rights and worksite safety.
- Processes claims efficiently and responsively.
- Enables employees who move from one PEO client to another to avoid loss of eligibility for benefits.
- Provides improved access to payroll information, benefits, personnel data, vacation and sick time accrual, and specialized reports.
- May offer credit union membership and banking privileges.
- Frequently offers exclusive employee discounts and rates on travel, entertainment and services.
Q: Who uses a PEO/ASO?
A: Any business can find value in a PEO/ASO relationship. A typical PEO/ASO client is a business with 5-100 worksite employees. Increasingly, larger businesses also are finding value in a PEO/ASO arrangement, because PEOs/ASOs offer robust Web-based HR technologies and expertise in HR management. PEOs/ASOs can partner with companies that have 500 or more employees and work in conjunction with their existing human resources department.
PEO/ASO clients include many different types of businesses ranging from accounting firms to high-tech companies and small manufacturers. Many different types of professionals, including doctors, retailers, mechanics, engineers and plumbers, also benefit from
PEO Referral Services and ASO services.
Q: What are the major differences between a PEO and an ASO?
A: Once a client company contracts with a
Pheonix PEO HR outsourcing company, the PEO will then co-employ the client's worksite employees. In the arrangement among a PEO, a worksite employee and a client company, there exists a co-employment relationship in which both the
PEO Referral Services company and client company have an employment relationship with the worker. The
Phoenix PEO Locator & Phoenix PEO Services company and client company share and allocate responsibilities and liabilities. The PEO assumes much of the responsibility and liability for the business of employment, such as risk management, human resource management, and payroll and employee tax compliance. The client company retains responsibility for and manages product development and production, business operations, marketing, sales, and service. The PEO and the client will share certain responsibilities for employment law compliance. As a co-employer, the PEO will often provide a complete human resource and benefit package for worksite employees.
An ASO will provide all of the benefits of a PEO with no co-employment and the potential for tailoring an outsourcing program specifically for that business. However, by eliminating co-employment, the client business also retains all the risk of having employees
Q: Are PEOs recognized as employers at the state and federal levels?
A: Yes. PEOs operate in all 50 states. Many states provide some form of specific licensing, registration, or regulation for PEOs. These states statutorily recognize PEOs as the employer or co-employer of worksite employees for many purposes, including workers' compensation and state unemployment insurance taxes. The IRS has accepted the right of a PEO to withhold and remit federal income and unemployment taxes for worksite employees. The IRS has promulgated specific guidance confirming the authority of PEOs to provide retirement benefits to workers.
Q: Why would a business use a PEO/ASO?
A: Business owners want to focus their time and energy on the "business of their business" and not on the "business of employment." As businesses grow, most owners do not have the necessary human resource training; payroll and accounting skills, the knowledge of regulatory compliance, or the backgrounds in risk management, insurance and employee benefit programs to meet the demands of being an employer. PEOs/ASOs give small-group markets access to many benefits and employment amenities they would not have otherwise.
Q: Does co-employment result in business owners losing control of their businesses?
A: No. The client retains ownership of the company and control over its operations. As co-employers, the PEO and client will contractually share or allocate employer responsibilities and liabilities. The PEO will generally only assume responsibilities and liabilities associated with a "general" employer for purposes of administration, payroll, taxes and benefits. The client will continue to have responsibility for worksite safety and compliance. The
Phoenix PEO Locator and Phoenix PEO Services company will be responsible for payroll and employment taxes, will maintain employee records and reserves a right to hire and fire.
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