If you’re ready to grow your business, you are going to need more employees. As this happens, you can find your HR department getting bogged down. This is where Professional Employer Organizations or PEOs come in. When combined with the proper insurance, these can be a great way to outsource your HR work. Here are some answers to frequently asked questions about this option.
What Is a PEO?
A PEO is a way to enter into a co-employment agreement. In other words, the PEO becomes your employer, files your taxes, and assumes your business’ responsibilities. In other words, they reduce the amount of responsibility you have and your control over your company.
Can You Leave It?
Leaving a PEO is not easy, but it is doable. The first thing you need to know to do this is all the information you need to file your taxes. This includes your FEIN and State Tax ID number. Chances are, the PEO company has been filing your taxes under their numbers, so you will need to reestablish your accounts before leaving them. You will also need to cancel your PEO insurance.
When your business grows beyond in-house HR capabilities, a PEO is another option. Just remember to do your research before joining one and get the proper insurance to protect your business.