Professional Employer Organization (PEO) or Administrative Service Organization (ASO)? The PSP Group offers both models to enable our clients to choose the relationship that `best suits their needs.
In fact, The PSP Group offers a range of relationship models, and we provide consulting to our clients to help them select the plan that is best for them. Whether the client chooses the co-employment relationship or the administrative services model, our level of commitment remains unchanged and our 24/7 access is the same.
What is a Professional Employer Organization (PEO)
Professional employer organizations (PEOs) enable clients to cost-effectively outsource the management of human resources, employee benefits, payroll and workers' compensation. PEO 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 PEO to assume these responsibilities and provide expertise in human resources management. This allows the PEO client to concentrate on the operational and revenue-producing side of its operations.
A PEO provides integrated services to effectively manage critical human resource responsibilities and employer risks for clients. A PEO delivers these services by establishing and maintaining an employer relationship with the employees at the client's worksite and by contractually assuming certain employer rights, responsibilities, and risk.
Businesses across America have discovered the incredible value of PEOs because they provide:
- Relief from the burden of employment administration.
- A wide range of personnel management solutions through a team of professionals.
- Improved employment practices, compliance and risk management to reduce liabilities.
- Access to a comprehensive employee benefits package, allowing clients to be competitive in the labor market.
- Assistance to improve productivity and profitability.
Source: NAPEO
PEO Services include:
- The highest standard of payroll processing
- Access to our web-enablement service for easy input of payroll information
- Direct deposit
- Customized payroll reports
- Remittance of payroll taxes weekly or semi-weekly via EFTPS
- Federal, state and local tax returns (under the employers federal ID) filing
- Issuance of W-2's
- Reporting of new hires
- Access to a section 125/cafeteria plan
- Access to our 401(k) retirement plan
- Updates on regulatory compliance
- PSP employee handbook and safety policy development, revisions and updates
PEO is its own structure
A PEO is not temporary staffing. A temporary staffing service recruits employees and assigns them to clients to support or supplement the client's workforce.
A PEO is not employee leasing. PEOs are based on the co-employment of an existing workforce. Whereas a leasing or staffing service supplies workers on a temporary or project basis – workers who will later move on to other projects for different clients – the PEO or co-employment arrangement involves the client's existing employees in a long-term employment relationship.
Employee leasing or staffing services create little long-term commitment or investment between the worker and employer-client. By contrast, in a PEO relationship, client firms make a long-term investment in their workers, often providing access to health insurance, retirement savings plans, and other critical employee benefits through the PEO. PEOs also take responsibility for employment tax, benefit plans, and other human resource functions normally associated with an employer.
If the relationship between a PEO and a client is terminated, the co-employees will no longer work for the PEO, but they will continue to be employees of the client.
Benefits of the PEO - Client Relationship
Administrative Service Organization (ASO)
For employers who prefer the traditional employment model, PSP still provides a strong offering of services to help take much of the employment burdens from the employer. ASOs are geared towards employers who are uncomfortable with co-employment. In a co-employment relationship, PSP Group and the employer share responsibilities and liabilities with regard to the employees. An ASO is functionally the same as a PEO, but internally there is no shared status, and no co-employment agreement – employees remain 100% the employer's.
In the ASO relationship, PSP offers most of the same services as available to the PEO. About 10% of our clients choose the ASO relationship.
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