What is a PEO?

• A professional employer organization (PEO) is a company, which contractually assumes and manages critical human resource and personnel responsibilities and employer risks for businesses by establishing and maintaining a co- employer relationship with worksite employees.

Who Uses a PEO?

• Nationally, the average client customer of a PEO is a small business with 16 worksite employees, though larger businesses also find value in a PEO arrangement - we like to say, 3 to 3,000. Our clients  include every single type of business from accountants to small manufacturers and every profession in between including doctors, retailers, mechanics and more.

How does the PEO arrangement work with Franklin Employer Solutions, inc.?

• Franklin Employer Solutions, inc. is a professional brokerage firm. We only represent a select few PEOs we feel can provide the specialized services our clients demand.

• Once a client company of Franklin Employer Solutions, inc. contracts with one of our recommended PEO Partners, the PEO will then co-employ the client’s worksite employees. In the relationship among a PEO, a worksite employee and a client company, there exists a co-employment relationship in which the PEO and client company have an employment relationship with the worker. The PEO and the client company each have separate responsibilities and liabilities.

• The PEO assumes responsibility and liability for the “business of employment” such as risk management, personnel management, human resources, payroll and employee taxes. The client company retains responsibility for the onsite day to day direction of its employees and manages product development and production, business operations, marketing, sales and service. The PEO and the client company will share certain responsibilities for compliance with employment law.  As a co-employer, the PEO can provide a complete human resource and benefits package for the worksite employee.

What are the benefits of using Franklin Employer Solutions, inc. vs. contacting a PEO directly?

• Any business may contact a PEO directly. A common way is to seek multiple quotes for service by contacting several PEO’s and scheduling multiple meetings with each PEO salesperson. This can be a time-consuming ordeal. You will have to decipher the facts from an understandably biased salesperson. And if you make an uninformed decision – that decision can be costly.

• Franklin Employer Solutions, inc., recognizes your time has value. Consequently, by contacting the professionals at Franklin Employer Solutions, inc., we do all the research and legwork for you. We then present you a professional proposal based on our agreed upon Needs Analysis of your business. That proposal will contain pricing for our services broken out in detail  (we do not provide bundle pricing with hidden profit centers…you’ll know exactly what you’re paying for) which enables you to make an educated decision that is best for your company.

Why would a business enter into a PEO relationship?

• Business owners want to focus their time and attention on the “business of their business” and not on the “business of employment”.

• As businesses grow, many business owners don’t have the necessary human resource training; payroll and accounting skills; knowledge of regulatory compliance; or backgrounds in risk management, insurance and employee benefit programs to meet the demands of being a 21st century employer.

Does the business owner lose control of his or her business?

• No. The client retains ownership of the company and control over its operations. As co-employers, the PEO and client company will contractually allocate employer responsibilities and liabilities.

• The PEO will generally only assume responsibilities and liabilities associated with the category of “general” employer for the purposes of administration, payroll, taxes and benefits.

• The client usually retains those rights and responsibilities associated with the category of “special” employer for the purposes related to actual business operations. The PEO will be responsible for payroll and employment taxes and will maintain employee records. Because the PEO may also be responsible for workers’ compensation, the PEO will also focus on improving safety and compliance.

Are the empIoyees of the client company “released and rehired” by the PEO?

• No. Workers are not fired by the client business and rehired by the PEO. Instead, a worker becomes an employee of two employers in a co-employment relationship.

• The PEO assumes employer responsibilities and liabilities for the human resource and personnel obligations of the worksite employees. This responsibility includes employees’ wages and employment taxes, workers’ compensation, unemployment insurance and administration of employee benefits.

• The client company retains employer responsibilities and supervision for the production of the products or the delivery of services and the day-to-day management of the worksite employee.

Who is responsible for the employee’s wages and employment taxes?

• PEOs assume responsibility and liability for payment of wages and compliance with all rules and regulations governing the reporting and payment of federal and state taxes on wages paid to its employees and distribution of W-2’s.

Who is responsible for state unemployement taxes?

• Both the client and the PEO have compliance obligations. However, the PEO provide worksite employees with coverage under the entire spectrum of employment laws and regulations, including federal, state and local discrimination laws, Title VII of the 1964 Civil Rights Act, Age Discrimination in Employment Act, ADA, FMLA, HIPAA, Equal Pay Act and COBRA.

• In many cases, these laws and protections would not apply to workers at small businesses without the PEO relationship, since many statutes have exemptions based upon the number of workers in a work force. Once included in the PEO workforce, the workers are fully protected.