Myth Busting: PEOs Vs. Employee Leasing Companies

Contrary to what you might read or hear elsewhere, a Professional Employer Organization (PEO) is not the same thing as an employee leasing company. The basic function of the latter is to achieve economies of scale through volume purchasing of employee health benefits and other “big-ticket” items. What employee leasing companies don’t generally deliver are the value-added services that a reliable PEO provides.

PEOs enforce sound business practices and proper documentation to adhere to government compliance regulations, including but not limited to: Government Compliance Reporting and Agency Interface, Unemployment Claims Administration, the Federal Insurance Contributions Act (FICA), the Federal Unemployment Tax Act (FUTA), state unemployment tax acts (SUTAs), safety services, Drug-Free Workplace Administration and Equal Employment Opportunity Commission (EEOC) administration.

Companies that currently execute such HR practices can benefit from the expertise of skilled PEO assistance. Personnel can increase proficiency and streamline their procedures to increase their ability to prevent liabilities. However, businesses without such a system stand to benefit drastically from professional employment organization constructing or restructuring of their current liability management system.

A PEO can best help your company put in place an employee incentive program. To find the right PEO for your company, please visit www.PEO7.com.