FAQs

Professional employer organizations (PEOs) provide human resource services for their small business clients—paying wages and taxes and often assisting with compliance with myriad state and federal rules and regulations.  In addition, many PEOs also provide workers with access to 401(k) plans, life insurance, dependent care, and other benefits not typically provided by small businesses. In doing so, they enable clients to cost-effectively outsource the management of human resources, employee benefits, payroll and workers’ compensation. PEO clients can thus focus on their core competencies to maintain and grow their bottom line.

Any business can find value in a PEO relationship. ​The average PEO client is a business with 19 worksite employees. Increasingly, larger businesses also are finding value in a PEO arrangement, because PEOs offer robust web-based HR technologies and expertise in HR management. PEOs can partner with companies that have 500 or more employees and work in conjunction with their existing human resources department.

PEO clients include different types of businesses ranging from accounting firms to high-tech companies and small manufacturers. A broad range of professionals, including doctors, retailers, mechanics, engineers and plumbers, also benefit from PEO services.

Once a client company contracts with a PEO, 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, which involves a contractual allocation and sharing of employer responsibilities between the PEO and the client pursuant to a client service agreement (CSA). The PEO typically remits wages and withholdings of the worksite employees and reports, collects and deposits employment taxes with local, state and federal authorities.  The PEO also issues the Form W-2 for the compensation paid by it under its EIN.  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, as determined in the CSA.  As a co-employer, the PEO will often provide a complete human resource and benefit package for worksite employees.

PEOs provide services to between 156,000 and 180,000 small and mid-size businesses, employing between 2.7 and 3.4 million people.

Using 3J & Associates as your PEO service provider will help you to lower employment costs, reduce hiring overhead, and increase your bottom line. Our professionals provide critical assistance with employer compliance, which helps protect the client against liability. In addition, we can save you time by handling routine and redundant tasks. This enables business owners to focus on the company’s core competency and grow its bottom line. Focus on your customers and leave the HR work to us!

No. The business owner retains ownership of the company and control over its operations. 3J & Associates will generally only assume responsibilities associated with a “general” employer for purposes of administration of benefits, and remittance of payroll and payroll taxes. The client will continue to have responsibility for worksite safety and compliance. 3J & Associates will be responsible for the remittance of payroll and employment taxes. Because we also may be responsible for providing access to workers’ compensation coverage, our professionals may also focus on and provide assistance with safety and compliance. In general terms, we will focus on employment-related issues, and our clients will be responsible for the actual business operations.

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 recognized the right of a PEO to withhold and remit federal income and unemployment.  We provide our services to Florida, Georgia, Missouri, and Indiana.

PEOs do not supply labor to worksites. PEOs supply services and benefits to a business client and its existing workforce. PEOs enter into a co-employment arrangement typically involving all of the client’s existing worksite employees and sponsor benefit plans for the workers and provide human resources services to the client. In most cases, the PEO provides access to health insurance, retirement savings plans, and other critical employee benefits for the worksite employees of the business client. If a PEO relationship is terminated, the worksite employees’ co-employment arrangement with the PEO ceases, but they will continue as employees of the client.

By comparison, a leasing or staffing service supplies new workers, usually on a temporary or project-specific basis. These leased employees return to the staffing service for reassignment after completion of their work with the client company. Some define employee leasing as a temporary employment arrangement where one or more workers selected by the leasing or staffing entity is assigned to a customer frequently for a fixed period of time or for a specific project. Upon termination of the staffing or leasing company arrangement, the worker has no continuing employment relationship with the client.

Historically, leasing terminology was used to describe what has evolved into PEO relationships. Some older state statutes governing PEOs still use the leasing terminology, contributing to the confusion about PEOs.

Like a leasing situation, a temporary staffing service recruits and hires employees and assigns them to clients to support or supplement the client’s workforce in special work situations, such as employee absences, temporary skill shortages or seasonal workloads. These workers are traditionally only a small portion of the client’s workforce.

PEOs do not supply labor to worksites. They co-employ existing permanent workforces and provide services and benefits to both the worksite employer and the employees.

Through a PEO, the employees of small businesses gain access to big-business employee benefits such as: 401(k) plans; life and other insurance; dependent care; and other benefits they might not typically receive as employees of a small company. And, when a company works with a PEO, job security is improved as the PEO implements efficiencies to lower employment costs. Job satisfaction and productivity increase when employees are provided with professional human resource services, enhanced benefits, training, employee manuals, safety services and improved communications.

We specialize in PEO / HR Services. Our professionals also provide Risk Management, Claims Management, Payroll Processing, Payroll Tax Submissions, General Liability Insurance, Property Insurance, Business Interruption Insurance, Workers’ Compensation Insurance, Commercial Auto Insurance, Employment Practices Liability Insurance (EPLI), Cyber Liability Insurance, Management Liability Insurance (D&O), Errors and Omissions Insurance (E&O), Crime Coverage, and other Specialty Commercial Insurance plans.

We will be onboarding our clients into our cloud-based payroll system in the Fall of 2021.

A major factor contributing to your data safety with our payroll companies is our $5,000,000 of cyber insurance, 256-bit encryption, and strong password system.