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How Does a PEO Engagement Work?
PEO relationships are founded on the concept of co-employment, making the PEO the “employer of record” for tax filings, workers’ compensation insurance and benefit programs.
Entering into a co-employment relationship with a PEO, such as XMi Human Resource Solutions, provides human resource related expertise and shifts employment related risks onto the PEO. The PEO assumes responsibility and liability for the “business of employment,” including risk management, human resources, labor law compliance, payroll, and employee taxes.
The Internal Revenue Code and many other federal and state statues recognize that a worker can have more than one employer for the same purpose at the same time. The PEO arrangement is a sharing and allocation of employment rights and responsibilities.
In the PEO arrangement, the workers are already employees of the business that contracts with the PEO. The workers are not fired and the business does not lose their employment relationship with the worker. The managers of your company retain day-to-day business direction of the employees while the administrative aspects are shifted to the PEO.
While the PEO industry offers many options for workers’ compensation insurance and health insurance coverage, the determination for co-employment is determined by the federal tax identification (ID) entity that is reporting the employee wages. A co-employment relationship requires the wages to be reported under the tax ID of the PEO. Employment related responsibilities are contractually assigned between the company in a document called a Client Services Agreement.
Who takes care of what, when using a PEO?
When you engage our PEO services, your company can focus on what you do best “operating your business,” while XMi Human Resource Solutions takes care of all of the employee details.
XMi Human Resource Solutions takes care of:
In-House Payroll Administration
Benefits Administration
Workers' Compensation Administration
Human Resource Administration
Work-Site Safety Evaluation
401(k) Plan Administration
Employee Handbooks & Safety Policies
Section 125 Administration
Employment Law Compliance
Your Company takes care of:
Job Specific Quality Reviews & Work Activities
Employee Motivation
Product, General & Professional Liability Insurance
Joint Responsibility:
Liability of Workers’ Compensation
Hiring/Termination of Employees
Employment Related Compliance Liabilities
Legal Compliance
If you are considering outsourcing all or part of your human resource processes, contact XMi Human Resource Solutions at (615) 522-5256. We would be happy to provide you with the details and benefits of our Professional Employer Organization (PEO) services.
