Employee Leasing Quotes : PEO Blog

Geographic limitations:

• Are you limited in any way to the number of states we can hire new employees? If so, which states are you currently not registered in to provide PEO services?

Payroll Taxes:

• What is the State & Federal unemployment tax rate which we will be charged? What are your own current unemployment rates and is the PEO’s rate higher than your current rate?

• Do you stop charging State & Federal unemployment & ETT tax when our employees reach the required wage thresholds? (The payroll tax thresholds are the first $7,000 wages for CA and Federal)

• When highly compensated employees reach $106,800 in YTD wages, do you stop taking social security tax (6.2%) from the employee? And do you stop the 6.2% social security payroll tax match for the employer?

• If we leave your PEO services mid-year, what happens to all the payroll taxes our company has paid YTD? Do all our company level employee and employer taxes start from zero again?

· Do we get those employer payroll tax monies back?

· Do we need to double pay all of our employer payroll taxes again?

Section 125 Employee Medical Premium Contributions I Employer FICA Tax Match:

• Can the employee contribute to their medical premiums on a pre-taxed basis?

• Do we the employer get the FICA tax match break on our employees medical premium contributions? Or do we still have to pay the employer FICA tax match portion on our employee’s medical contributions?

• If we have an FSA plan, do our employees contribute to this on a pre-tax basis?

• Do we the employer get the FICA match tax break on our employees FSA contributions? Or do we still pay the employer match portion of FICA on the FSA contributions?

• At the end of the FSA plan year what happens to the unused FSA funds. Is it returned to us or does the PEO keep those funds?

• Is the billing easy to understand and broken out by: service fee, gross wages, payroll taxes, workers’ compensation premiums and health benefit premiums? Or is the billing a “bundled” percentage of gross wages and confusing to decipher which services cost what?

• Does my billing percentage rate decrease as each one of my employees reaches their first $7,000 in wages? Specifically, do you respect the threshold for employer taxes for State & Federal unemployment? (Hidden fee alert)

Benefits Flexibility:

• Regarding health benefits: Do you offer us the flexibility to select any carrier we want?

• Regarding workers’ compensation: Do you offer our company the flexibility to select any carrier we want? Can we shop for a new WC policy each year?

• Regarding 401(k) plans: Do you offer our company the flexibility to select any 401(k) plan we want? Can we shop for a new 401(k) Plan if needed?

• If we utilize your PEO services, but decide to leave your payroll services, can we keep the health benefits plan, workers’ comp policy and 401(k) plan?

• Can you administer any third party plans or policies that are not your own? For example: Health, workers’ compensation or 401(k)?

Officers/Owners of the Company:

• Will we be charged work comp premiums for the officers/owners of the company under your program? (Officers and owners are typically excluded from WC premiums)

• Do the officers/owners of the company have to sign an employment agreement to be employees of the PEO?

Officers/Owners of the Company:

• Will we be charged work comp premiums for the officers/owners of the company under your program?

• Do the officers/owners of the company have to sign an employment agreement to be employees of the PEO?

Company Process:

• Do we still retain the right to hire and fire our employees?

• Who will actually be the employer of record?

• Will our employees W2’s at year end say our company name or the PEO company name?

• Will our company be held to Federal & State HR compliance laws based on our actual number of employee or will our company be looked at as a much larger organization because we are pooled under your FED ID #? Will we be subject to additional Federal & State compliance laws of a much larger company? (i.e. COBRA, FMLA)

www.EmployeeLeasingQuotes.com
1-888-582-8388

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I’m reading more and more articles from around the country like the one I’ve included in this blog, regarding discrimination and Fair Labor Standards Act (FLSA) lawsuits. This growing trend along increasingly more governmental regulations (classification of independent contractors), also addressed in the article, continue to build value in utilizing PEO/Employee Leasing services.

Where employers have typically thought of accessing a PEO for reduced rates on workers’ compensation or health insurance costs, since the beginning of the year, we’ve noticed employers contacting us specifically requesting help with human resource issues. I recently commented on one of the fastest growing business insurances - Employment Practices Liability Insurance (EPLI), which relates to this article and protects against sexual harassment, age and gender discrimination, and has seen a dramatic rise as well.

What’s important to know is that some PEO’s provide this insurance and professional HR services, while many others don’t. Understanding the differences between PEO providers and what benefits your business needs from a PEO, will make the relationship a success or failure. Hope this article benefits you.

http://atlanta.bizjournals.com/atlanta/stories/2010/07/26/focus2.html?b=1280116800^3688401&ana=e_vert

Mike Burgelin
1-888-582-8388