We are often asked just how this PEO thing really works. The following will give you an idea of just how simple the process has become.
There are four steps in getting approved and enrolled with a PEO.
The first step in using a PEO is getting approved by their Worker’s Compensation Underwriting Department. This entails a client information sheet as well as 3 years of Loss Runs. Loss runs can be obtained from your Worker’s Compensation Carriers of the 3 most recent years. They are a written statement or figures that come directly from the Worker’s Compensation carriers. Loss runs give our underwriters to get an accurate look of what your Worker’s Compensation Loss history. This will allow the underwriting team to adequately address your appropriate rate (charge) for Worker’s Compensation Coverage as well assess your company’s needs for Risk Management help. If your company is new or has been in business for less than three years don’t worry. We provide coverage for startup businesses on a daily basis. If you have had coverage we will need to get Loss Runs for whatever period of time you have had Worker’s Compensation Coverage. From the time the Worker’s Compensation Underwriting receives this information we will get an approval within 24-48 hours.
The second step, which comes after we get the approval from the Worker’s Compensation Underwriting department, is Enrollment. This process is very simple. This entails filling out employee applications. The application includes a page of basic information such as name, address, social security number. The application also includes a Worker’s Compensation questionnaire which basically asks if there are any existing Worker’s Compensation claims. There is also an acknowledgment form that explains to the employee that their paychecks will be issued from the PEO and that all Workers’ Compensation claims must be reported to their supervisor as well as the PEO. Most PEOs include a Direct Deposit form to allow the employee to have their paycheck automatically deposited into their checking account. You as the employer will be required to sign the W-4 and or the I-9 tax forms as a witness to the employee. You will also need to review and sign the PEO service agreement which clearly states yours as well as the PEOs duties.
The third step to getting started with a PEO is supplying your checking account information and getting your bank to sign a form indicating how many, if any, NSF charges your company has accrued over the previous six months. Most PEOs require the first payroll processed to be paid with certified funds. After the first payroll is run you have the option of continuing with certified funds, using an ACH draft, or writing a business check. The checking account inquiry will need to come back with a favorable response from your bank in order to opt for ACH or business check.
The fourth step of starting with a PEO is scheduling an onsite Worker’s Compensation Risk Management evaluation. This is where some of your benefits of using a PEO start to apply. Your Worker’s Compensation Risk Manager will spend enough time with you and your jobsites to suggest any changes that need to be made in order to improve employee efficiency and safe work place conditions.
Once these four basic steps are complete you will be ready to enjoy the benefits mentioned earlier. The following will bring you up to speed on the payroll processing and delivery.
There are several ways to report your employees work hours to the PEO. You are free to call, fax, email and some allow direct online entry of your employees work hours. Once the PEO has received your employee’s hours they will do all of the data entry. From this, you will be provided with an invoice that will clearly state the charges from the PEO to your company. These charges include Medicare, FICA, FUTA, Worker’s Compensation, Administration fee and State Unemployment. It is important to note the in most cases you will see a reduction in all of these charges with the exception of Federal Payroll taxes. You will also receive check register reports, job costing reports and or departmentalized reports. Once the payroll has been processed it will be delivered to your location via courier, DHL, UPS, or Fed-Ex. The delivery person will hand you a package that includes all of your reports and all of your employee’s paychecks. You will then hand the delivery person a certified check or business check. If you choose ACH as your form of payment you will not need to give the delivery person anything. That is how it works, rather than your company spending time processing and reconciling multiple checks each month you will be handling all of your employee’s paychecks, yours and their State and Federal Payroll taxes, and your Worker’s Compensation premiums with ONE check per week. This will undoubtedly have a very positive impact on you, your company and your accountant.
We invite you now to fill out our easy form to begin the process. If you prefer to contact us via email, or telephone please don’t hesitate to do so now.
WE ARE OFFERING WORKER’S COMPENSATION COVERAGE AND MANY MORE BENEFITS WHILE USUALLY CHARGING YOU LESS THAN WHAT YOU ARE CURRENTLY PAYING FOR LESS.
Because of the way our brokerage is structured we don’t employee ANY salespeople. We have decided to take full advantage of technology and allow you, the customer, to handle some of what typical salespeople will do. Instead, we made a business descion pay you, the client a monthly residual commission based upon your company’s gross payroll. We would much rather answer questions and guide you through the process than pay a salesperson to assist you and inflate your cost of doing business. The PEOs we work with pay us as if we had a large sales team. Because of this structure we are able to pay you the equivalent of the average PEO salesperson. You will be able to fill out the Client Information sheet independently as there is nothing on it which requires help from us. Once this is finished you will be able to print an indicated billing rate for all the services our PEOs provide. If you would like to continue the process you will be asked to email or fax us the 3 years worth of Worker’s Compensation loss runs so that we can submit it to Worker’s Compensation Underwriting. Within 24-48 hours we will receive a reply from the PEO and forward it to you along with any necessary information and/or a complete enrollment package including a PEO service agreement, Employee applications and Checking account forms. Once those forms have been filled out we will ask you to forward them directly to the PEO so that they can begin their set-up process. We are still here if you need help or questions with any part of the process. We are still working in the capacity of a salesperson. The only real difference is that we are not physically meeting with you to present a quote and fill out the paperwork. After 15 years in this industry we have thought it a strange idea to pay someone to do what you or someone on your staff can do more efficiently. In return we are happy to pay you, the client, commissions earned as you are doing the job of one of our outside salespeople.
We truly looking forward to working with you and helping you and your company in ANY capacity that we can.
Thank you for your time!