Frequently Asked Questions

Here are answers to some of the FAQs about Professional Employer Organizations.

Simply click on any of the links below or call us at (561) 954-4744 for more information.

General PEO FAQs
Payroll FAQs
Human Resources FAQs
Employee Benefits FAQs
Risk Management FAQs
HRIS

General PEO FAQs

What is a professional employer organization?

A Professional Employer Organization (PEO, in short) is a company that takes care of your non-core competencies such as Payroll Administration, Compliance Management, HR Administration, Risk Management, and Benefits Administration.

With a PEO by your side, you can get better benefits for your employees at cheaper rates, retain your best employees, and focus on growing your business while not worrying about things that shouldn’t matter in the first place.

How many employees do I need to work with a PEO?

Companies of all shapes and sizes can work with a PEO.

As far as Employers-Rx is concerned, we’ve helped companies with an employee count ranging from 5 to 500 better manage their HR functions.

If I hire a PEO, will I lose control of my business?

No, you will not lose any control over your company. PEOs work with you to make it easier for you to run your business.

What is co-employment?

A co-employment relationship makes the PEO the ‘Employer of Record’, making the PEO responsible for all HR-related administrative functions such as Payroll Administration, Risk Management, Benefits Administration, Workers’ Compensation, etc. However, every work-related and hiring/firing decisions rest solely with the business owner.

What is employee leasing?

Employee leasing is basically a contractual arrangement that lets you hire employees, usually for short-term periods. The PEO maintains its position as the ‘Employer of Record’, and all employee responsibilities are shared between the PEO and the business owner. While the business owner handles essential management control over the leased workforce, the PEO handles HR-related administrative tasks.

How common are PEO agreements?

PEO agreements are far more common than what you might think. These systems operate in all 50 U.S. states and cover over 3 million American employees.

What Is a PEO Service and How Does It Work?

A PEO service is an outsourced HR solution for businesses that want additional HR and payroll support. Your PEO service provider handles most of the logistical tasks related to hiring and paying employees, including running payroll, administering benefits, onboarding new team members, and offering HR support.

How Does a PEO Service Work?

PEO services become co-employers with your business, meaning the IRS holds the PEO (not you) legally responsible for labor law compliance, payroll tax remittance, and HR-related liabilities. You’ll continue to be responsible for running your business and making decisions about who to hire and fire, but your employees will reach out directly to the PEO to deal with issues like workers’ compensation, benefits, and payroll tax withholding.

How Much Does a PEO Service Cost?

For the most part, PEO services don’t disclose their prices online. However, with most PEOs, you’ll pay a monthly per-employee fee that can range from hundreds to thousands of dollars a year for an individual employee.

According to PEO service provider ADP, a PEO typically costs the equivalent of 2% to 12% of each employee’s wages. You can use that estimate to calculate your hypothetical PEO costs, but the best way to figure out how much a PEO service will cost is to contact multiple PEO companies for quotes.

Additionally, some PEO services offer different packages with different features. Be prepared to pay more for PEO services with additional HR features. For instance, Justworks has two plans with more or less the same HR features – but only the higher-tier plan, which costs $99 per employee per month, includes benefits administration.

Features To Consider When Buying a PEO Service

Cost

  • First, consider how much you can afford to spend on a quality PEO service. With a few exceptions, most PEO providers require you to request a custom quote. We recommend requesting quotes from at least two PEO providers if not more to make sure you’re getting a fair quote at industry-standard prices.

 

Services Offered

Most PEO services offer a combination of the following HR and payroll features:

  • Payroll processing

  • Benefits options and administration

  • Time and attendance tracking

  • Employee onboarding

  • Legal compliance

The more features your PEO offers, the higher the cost (and the lower your administrative in-house HR burden).

 

Customer Support

Since you’ll rely on your PEO service to offer expert HR advice whenever you need it, it’s essential to pick a provider with excellent customer service. Your employees will also interface primarily with your PEO provider to resolve questions about payroll and benefits, so prioritizing a PEO’s customer service reputation will make life easier for you and your employees alike.

Scalability & Flexibility

You need a PEO service provider that can accommodate your business’s employee growth. For instance, PEOs like Rippling can easily adjust to support companies with between one and 500 employees. Other companies offer solutions specific to companies with fewer than 50 companies and separate packages for companies with over 50 employees.

How To Choose the Best PEO Service

Follow this process to find a PEO service that both meets your employees’ needs and suits your budget constraints:

  • Read comprehensive best-of reviews to learn about the most popular PEO options.
  • Narrow down your preferred PEO service providers based on issues like features, cost, customer support, and user reviews.
  • Schedule initial meetings with the sales teams of at least two of your top PEO options. Meeting with at least two providers lets you compare quotes and features, giving you a better idea of what you should expect from PEO providers.
  • Prepare for your meeting ahead of time. It will help to come up with a list of questions – the more specific, the better. Ask about pain points customers point out on user review sites, share details regarding your unique company’s needs, and don’t be tempted to sign up on the spot. Shopping around for the best offer can get you a better deal.
  • Once you sign up, monitor your employees’ experiences with the PEO. If it doesn’t seem to fit your company’s needs, search for a better alternative. Now that you have hands-on experience with what you don’t want, it should be easier to find what you do want and go from there.
Alternatives to PEO Services

If a PEO service isn’t the right HR solution for you, a variety of other options could suit you better.

In-house HR and payroll software is a cheaper software solution for business owners who are comfortable running payroll on their own. Options like Gusto start at $40 a month plus $6 per employee paid per month, which might make it a better fit for small-business budgets.

On the flip side, if you need more HR and payroll features than most PEO services can offer, a more robust human capital management (HCM) service or human resources information system (HRIS) could work better. These cloud-based software solutions include PEO-style features like benefits administration and payroll, but they also include personnel management tools like performance reviews, talent acquisition, and built-in learning management systems.

How We Chose the Best PEO Services

To find the best PEO services for businesses like yours, we at U.S. News 360 Reviews extensively researched the most popular PEO services among U.S. businesses today. We looked at verified third-party reviews on sites like G2, TrustRadius, and Gartner to understand customers’ experiences with top products. Our expert reviewer has also participated in demo calls with the PEO companies on our list and, whenever possible, used demo accounts and free trials to test software features and examine UX.

Why Should You Trust Us?

Kylie McQuarrie, this article’s author, has 10 years of experience writing for and about businesses and the technology that keeps them running smoothly. Most recently, she worked as the lead payroll writer for TechRepublic. She also managed the payroll and accounting beat at Business.org for several years. Kylie is passionate about getting first-hand experience with the software she reviews and recommends you do the same – there’s no better way to find out if any given software works for you.

When Should I Use A PEO Service

If you’re part of a small or midsize company and find yourself overwhelmed with HR tasks, it could be time to outsource personnel issues to a PEO. Specifically, if approving payroll and onboarding employees is eating into your valuable work time, turning these tasks over to a PEO service can free up your schedule to focus on growing your business.

Signing up for a PEO service is also useful if you’re nervous about employment law compliance: Outsourcing to a PEO can shift some aspects of payroll tax compliance from your shoulders to that of the PEO, though you’ll need to read the fine print of your customer service agreement to understand exactly how you and your PEO will split risk management going forward.

Can a PEO Help With Compliance

Yes, a PEO can help with compliance. PEO services have legal experts on hand to help you understand all state, local, and federal regulations related to your industry. Plus, once a PEO becomes your co-employer, the two of you will share legal risks.

Carefully read the terms of your customer service agreement to see which aspects of employment law your business is responsible for and which are covered by the PEO.

Can a PEO help with employee benefits administartion

A PEO can help with employee benefits administration. Depending on which PEO service you choose, they likely offer a range of top-notch employee benefits that you can choose to offer. The PEO provider will also handle your employees’ benefits enrolment.

Does a PEO handle payroll processing?

Many PEOs handle payroll processing for their customers. If your PEO provider doesn’t have built-in payroll processing, it likely syncs with popular payroll software options to make HR data tracking as easy and accurate as possible. Be aware that some providers charge an additional fee for payroll while others include it in their baseline service package.

Payroll FAQs

Will I lose control of my employees by running payroll through a PEO?

No. By working with a PEO, you certainly will not lose control of your employees.

What kinds of reports will the PEO offer?

The PEO you partner with will offer many different types of reports, from comprehensive payroll ones to hourly reports on single employees.

What do I do if I have a question about my payroll system?

If you have a question about your payroll system, simply call your company representative or contact the PEO help desk.

Can I choose what my employees have access to and see when they log into the payroll site?

Yes, you can determine what your employees have access to and see when they log into the payroll site. You can grant or deny access at your discretion, whenever you like.

Every time I’ve tried to move payroll it’s been a pain. Why is this going to be different with you?

Because we take the effort to understand your payroll concerns, gather key information about your business, and pair your business with a PEO who will customize the payroll system to meet your specific needs. We’ll make the switching easy and convenient.

My accountant handles all of my taxes, W2’s, and quarterlies. Will the PEO handle all these or will I still need my accountant?

The PEO we help you partner with can handle your W2 and quarterly forms for you, and can even take care of your tax payment, but you still may need to keep your accountant on retainer for other business purposes.

How are W-2’s handled? What if we join the PEO mid-year?

Your PEO will process the W2s the moment they receive your payroll information. If you join the PEO mid-year, they will enter all your W-2 information into their system and bring things up-to-date for you and your employees to log in and see.

Will the PEO charge extra for W-2s?

No. W2s are included in the price of PEO services.

Whose name will be on the check stubs?

Your company’s name will be on the check stubs.

When do I have to submit my payroll?

Your PEO will work out your submission dates when you enroll in their services.

Things also depend on your current payroll schedule and whether your employees get paid weekly or biweekly.

The PEOs we help our clients partner with do offer direct deposit, and it does not cost extra.

The PEOs we help our clients partner with do offer direct deposit, and it does not cost extra.

What if I don’t want to offer direct deposit?

The easy answer here is that you don’t have to. PEOs give you both the options — direct deposit or paper checks.

Where do I have to be to enter our payroll?

You can enter your payroll into the PEO provided payroll system from any device with internet access, including your phone.

Who will make the payroll entries?

To ensure information accuracy and avoid making unnecessary mistakes, it’s the client who takes responsibility for the payroll entries.

How do we submit hours to you?

You can either submit the hours manually on the payroll site or opt for a file upload.

Does the payroll software offer the ability to do job costing?

Yes. The payroll software provided by your PEO will offer the ability to do job costing.

Will our PEO run the books?

While your PEO won’t run all of your books, they can take care of your payroll and HR ones for you if you so wish.

How does the HR function of payroll work?

Among some of the many HR functions that your PEO will offer you is the ability to track employee vacation days, paid time off, and the number of hours worked. You can also upload and keep instruction materials, handbooks, and other documents for your employees to see whenever they like.

Will our PEO pay the workers’ compensation premiums?

Absolutely. Your PEO can take care of this for you.

Can I get Time Keeping Systems?

Yes, your PEO can get you time keeping systems as well.

Human Resources FAQs

If I outsource my HR functions to a PEO, will I lose control over my employees?

No, you remain in control of all of your work-related and hiring/firing decisions. Your PEO simply handle the HR-related administrative operations and make things easy for you.

Why should I outsource my HR functions to a PEO?

Because by outsourcing your non-core job functions, like payroll, compliance, and HR administration to a PEO, you can focus your attention and dedicate your critical resources to tasks that help your business grow.

What HR services do you offer?

From handling your payroll and employee benefits to managing risks and compliance, and providing you with a reliable HRIS (Human Resource Information System), Employers-Rx provides a gamut of HR services and solutions that help businesses grow.

Where can I access my company’s HR information?

You can track every employee’s HR information through the PEO-provided HRIS (human resource information system). You will also have access to a customer service representative who will answer any of your HR information related questions and pull up details for you.

You will have a designated customer service representative who will be responsible for answering any question that you may have.

How often will I meet with my HR account manager?

You can meet with your HR account manager as little or as much as you’d like. It really is up to you.

Who is responsible for employment law and regulatory compliance?

While you – or your designated employee – is responsible, your PEO will work with you to ensure that you are compliant with all laws and regulations.

What types of companies outsource their human resources?

Companies of all types and sizes outsource their HR services.

At Employers-Rx, we have had extensive experience in working with companies with an employee count ranging between 5 to 500. If you want us to take care of your HR burden, let us know — we’re just a call away.

I’m an insurance broker. How can you help me?

Employers-Rs work with top carriers to help its partner companies get the best insurance products. So, if you are an insurance broker and wish to get your client the best insurance deal, we welcome you to get in touch with us.

Employee Benefits FAQs

Healthcare is crazy these days. How can you help?

We can help by providing you with Fortune-500 level employee benefits packages, which will help you attract and retain top talents. Besides, you’ll have access to a dedicated off-site HR department who’ll constantly take care of your employee benefits packages and sort out any issues you may have.

Do you offer comprehensive benefits for my employees?

Yes, we do offer comprehensive benefits for all of your qualified employees.

How are you different from my broker?

Owing to our immense experience in working with some of the most renowned and trustworthy names in the PEO industry, we have industry connects and the negotiating power to get you the HR solutions and employee benefits packages that your present broker may not have access to.

Should I move my business from my current broker?

That depends. If you’re happy with your current broker, then stay with him or her.

However, if you decide to move your business to Employers-Rx, you can rest assured that you shall have access to the best employee benefits packages — which usually are beyond the reach of small businesses — and a dedicated off-site HR team to look after your paperwork and all the nagging administrative hassles.

What carriers do you work with?

We work with some of the best carriers in the business — which is why we can get you attractive employee benefits packages.

Are the benefits included in your service fee?
No, the benefits aren’t included in our service fee. Your cost depends largely on the sort of employee benefits that you’d like to offer your employees. Please call us to find out more.
I don’t offer a company health plan, but contribute to individual plans for my managers. Do you offer individual plans?

Yes, we offer individual plans, company plans, and everything in between.

Will a PEO health benefit specialist work with our new hires to explain our healthcare plan?

Yes, your PEO can have someone come out to your office on demand in order to go over everything.

What do you need to put together a Health Care quote?

We simply need you to fill out this form.

How long does it take to get a health care quote?
We can get you a number of quotes to choose from within days of receiving all of the necessary details.
Do my employees get lumped in with thousands of other employees when it comes to quoting my health insurance?

No. Your employees remain in their own group. However, having thousands of employees clubbed together does have its advantages in the form of better benefits packages and discounts.

What is an MEP?

MEP, short for Multiple Employer Plan, lets unrelated small businesses club their 401(k) plans together to manage their 401(k) risks and responsibilities and leverage better prices and increase operational efficiency.

Employers-Rx can help you access a lucrative MEP.

If I do switch my 401(k) plan over to a PEO, am I still the fiduciary?

No, your PEO shall take on all the fiduciary responsibilities.

Who will I be working with for 401(k)?

By partnering with Employers-Rx, you can rest assured that you will get access to the best 401(k) plans provided by some of the most reputed and trustworthy names in the business.

Do we have to match if we utilize the PEO401(k)?
No, but you can if you want to. PEOs leave that decision fully up to you.
If we are a part of the PEO’s 401(k), do my employees still control what funds they invest in?

Yes, just like with any 401(k) plan, your employees are in control of where their funds go.

Can I keep my own 401(k)/IRA?

Sure. You can remain in charge of the IRA or 401(k) that you are currently invested in.

What ancillary benefits do you offer?

You can avail everything from dental and vision care plans to disability and more.

How will my PEO run PTO (paid time off)?

If you decide to opt for your PEO’s PTO model, they would take responsibility for guiding and suggesting you on what would work best for your company and its employees.

My vacation and sick policies are outdated. Can you help?

Absolutely. Your PEO can help you update all of your policies to meet current regulations.

Do you help with COBRA administration?

Yes. The PEO we help you partner with will handle COBRA and send out necessary COBRA documents and letters to all of your former employees.

Who do I call if I have a healthcare question?

If you have a question related to healthcare, simply contact the customer service representative or contact your PEO’s help desk.

What is a section 125?

This is a special part of the regulatory code that allows health insurance costs to come out of each employee’s paycheck on a pre-taxed basis. Contact us for further details.

What is the difference between HSA and FSA?

An HSA is a health savings account, where you can put aside money to be used towards health care charges. This money is taken out before taxes. An FSA or Flexible Spending Account works similarly but can be used for childcare as well.

Risk Management FAQs

Can my PEO help save me money when it comes to workers’ compensation?

Can my PEO help save me money when it comes to workers’ compensation?

What all do I need to do when a workers’ comp claim comes across?

All that you need to do is gather as much information as possible and contact your service representative. If we need additional information, we will let you know.

Will we lose all control of how our workers’ comp claims are managed?

No, you won’t, since your PEO will check in with you as needed and won’t move forward on important claims without your permission.

I have a lot of workers’ compensation claims right now. Will that impact my ability to secure lower rates with the PEO?

Having workers’ compensation claims do not necessarily impact your ability to secure lower rates with your PEO. Your rates depend on many different factors. Please call us today for further details on this.

What happens if I have a workers’ comp claim? Will I get kicked out of any discount that a PEO may offer me now?

Again, that depends on the type and size of the claim. Often one claim won’t hurt your discount rate, but it really does depend on the details.

Will my PEO help with OSHA compliance?

Yes. Your PEO can and will absolutely help you comply with all relevant worker’s safety rules and regulations.

Can I get any employee safety training that I can use?

Yes. Your PEO can help you with employee safety training programs.

Will my PEO enforce a drug-free work environment?

PEOs generally prefer to enforce a drug-free work environment, as that provides a safe working environment for every one of your employees.

Do you recommend employment drug testing?

Yes, we do, and we have a list of providers available should you need one.

How can a PEO help us save money on unemployment?

Your PEO will get you access to risk management experts who will ensure you don’t get ripped off on fraudulent unemployment claims.

How are unemployment claims handled?

Unemployment claims are handled by the customer service representatives provided by your PEO. The customer service representative will discuss every part of the unemployment claim with you and bring in risk management experts who will help you with the claim.

Can I come aboard my PEO’s State Unemployment account number if it gets me a better rate?

Yes, your PEO will offer this as an option. However, every state has a different rule regarding this, and your PEO will handle your request as per the applicable laws and regulations.

Human Resources Information Systems (HRIS)

What is an HRIS?

Human resource information systems (HRIS) are a foundational type of HR software that businesses use to automate core administrative processes such as onboarding, new hire reporting and employee data management.

What are the benefits of HRIS software?

An HRIS is considered a must-have tool for most small businesses. Here are just three of the ways an HRIS can benefit your business:

  • Secures employee data: As you’re well aware by now, keeping employee records is a must to operate your business legally. That said, employee data contains sensitive information (like workers’ home addresses and Social Security numbers). The best HRIS systems encrypt employee data to lower the risk of a harmful breach. For example, Zoho People, Omni HR and others are ISO 27001-certified, which means that a company demonstrates a commitment to the protection of sensitive data by implementing appropriate risk assessments, policies and controls.
  • Assists with compliance: Accurate employee record-keeping is one aspect of compliance, but there are many more requirements that employers must abide by. For example, businesses in the healthcare industry are subject to HIPAA (Health Insurance Portability and Accountability Act) regulations. HRIS platforms are often built with a compliance notification system that helps organizations stay up to date on changes to federal and state regulations, as well as be aware of any potential breaches they may be overlooking.
  • Automates processes: Human resource information systems are designed to automate key administrative HR processes such as onboarding, new hire reporting and time-off request management. This negates the need to manage back-and-forth emails or mail paper forms, saving both HR leaders and employees time.
What are the essential HRIS features?

Every HRIS tool is different, which is why many vendors offer more than one plan to accommodate businesses’ varying needs. That said, here are the features we consider essential in an HRIS.

  • Employee profiles and database: A searchable database of employee profiles is key HRIS functionality.
  • Organization chart: Most HRIS tools include org charts, which are a visual representation of your business’s internal structure and where roles sit within it.
  • Onboarding and offboarding: Automated workflows for onboarding and offboarding employees are usually included in the best HRIS options.
  • Employee self-service: Self-service portals are used by employees to access their personal information, pay stubs, tax documents and company announcements.
  • Document management: Businesses need a place to store key HR documents such as employee handbooks and remote work policies, which is why document management is often a part of HRIS platforms.
  • Compliance: Operating in compliance with federal and state laws is a concern for every business, so many HRIS tools are built to alert employers when regulation changes impact them or they take an action that puts them at risk.
  • Workforce analytics and reporting: Because an HRIS is used to manage employee data, such tools often have a reporting and analytics component. Some may be simple — providing basic information on turnover rates and compensation breakdowns — while others may offer more advanced analytics insights such as a forecast of future workforce needs.
How much does HRIS cost?

The cost of HRIS platforms varies depending on how many employees your business has, how comprehensive of a solution you choose and the length of the contract you agree to (vendors often offer discounts on annual subscriptions).

Most systems follow a PEPM (per employee per month) pricing structure. Based on pricing information for the products in this guide, small businesses can expect to pay between $1.50 to $10 per employee per month. OutSail (an HR software broker) reports a wider range — from $7 to $42 per employee per month — based on the pricing of 16 different HRIS systems.

Methodology: How we chose the best HRIS systems

To help you find the best HRIS system for your business’s needs, we researched the top providers in the industry using a specific set of desired data points. After we collected this data, we narrowed our list to 29 solutions based on 33 different metrics. We then weighted each metric based on what matters most in an HRIS platform for small and medium-sized organizations. Once we had the final score for each product, we selected the 10 that rose to the top for this list.

We assigned each product an Editors’ Score encompassing four key areas before converting the final scores to a star rating out of five. This score does not affect our selection methodology or assessment of key data points for ultimate list inclusion.

Core HRIS features (25%)

To determine whether a system offers essential HRIS functionality, we evaluated its core HRIS features. Core HRIS features are administrative functions that support employee data management. The features factored into our scoring include employee databases, employee handbooks, org charts and reporting dashboards.

General HR features (25%)

When choosing an HRIS platform, it’s essential to know whether the system offers the features you need to manage a workforce. General HR features considered in our scoring include employee portals, onboarding, document management, compliance tools and notification systems.

Additional features (22%)

To thoroughly judge the comprehensiveness of each HRIS tool, we considered any additional features, which — in this case — may or may not be directly related to HR processes. For example, we factored in software integrations, e-signatures, automated workflows, workforce analytics and offboarding capabilities, since such functionality is a key part of any robust HRIS.

Service and support (12%)

How responsive and helpful a software vendor’s support team is can have a big impact on a business’s success with its system. To measure this, we factored in the channels available to contact support (including live chat, phone and email), and whether or not the company offers a self-help knowledge base for its customers.

Customer reviews (6%)

We pulled information from three reputable review aggregators (Trustpilot, G2 and Capterra) to see how former and current users rate each system.

Value (5%)

The value of a system is incredibly important for small and medium-sized businesses on a budget. To judge the value of each HRIS system, we considered whether pricing information is publicly available, if a free trial is offered (and the length of the trial) and subscription cost when billed monthly and annually.

Editors’ Score (5%)

Our Editors’ Score for the top HRIS tools for small and medium-sized businesses considered four key factors: value for money, features, popularity and ease of use.

What are the best HRIS systems?

Based on our research, the best HRIS system is Zoho People followed by Omni HR and UZIO.

How do you implement an HRIS system?

Most HRIS vendors provide implementation support. If this service isn’t free, we suggest paying for it to ensure a smooth and accurate migration of your employee data over.

What's the difference between HRIS and HRMS?

HRIS and HRMS (human resource management system) are used interchangeably. Both terms refer to a type of HR software that automates administrative processes and supports employee data management.

What's the difference between HCM and HRIS?

HCM (human capital management) systems differ from HRIS in their scope. HCM solutions have a broader scope; they generally offer the features of an HRIS along with additional functionalities that assist with workforce and talent management.

What should a good HRIS system include?

The best HRIS systems will include employee profiles and a searchable employee database. They’ll also have org charts, HR document management, automated onboarding workflows, self-service portals, and time- and attendance-tracking capabilities.

Simply click on any of the links below or call us at (561) 954-4744 for more information.

General PEO FAQs
Payroll FAQs
Human Resources FAQs
Employee Benefits FAQs
Risk Management FAQs
HRIS

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