Frequently Asked Questions about PEO Companies

PEO stands for Professional Employer Organization.cooemployment

How a PEO Company Works for You

CBR has adopted the co-employment phraseology for PEO to define the relationship between you and us.

Basically, this means that we act as an “Administrative Employer” while you act as the “Managing Employer”, both of which are equally important yet exclusive responsibilities. Since some tasks just can’t be outsourced, you will need to continue directing and controlling your workforce hours, pay rates, and employee benefits. However, as your PEO company, CBR will conduct the administrative tasks (which, let’s face it, can be a huge chore) necessary to carry out the HR functions and keep you in compliance with benefit vendors, government agencies, the Industrial Commission, and all other employee-related entities.

Want more on Co-Employment? Read our section called What is Co-Employment?
Still wondering if it’s for you? Read about the Benefits of Using a PEO Company
Are you wearing more HR hats than you think? See the Real Definition of HR
A PEO Company Keeps You Focused on Growing Your Business
A PEO company focuses on one thing…keeping you focused on growing your business. The PEO company model is the tool used to accomplish the greater goal of reducing your administrative headaches and cost, allowing you to spend your time doing what you should be doing…growing your business and enjoying the benefits of ownership.

FACT: The U.S. Department of Labor estimates that “by the year 2020, about 50% of the American workforce will be employed through an HR Outsourcing Company [PEO Company]”

Usually, more than 5 employees.  Some PEOs will service companies with less than 5 employees depending on their need for benefits, among other things.
Both the client AND the PEO.  The Client is the managing employer and the PEO is the administrative employer.
The client will take on the entire employer burden for those employees.  That means unemployment taxes start accruing under the Client FEIN number.  Any benefits that were secured under the PEO FEIN will cease to be available and the client will be responsible to replace those benefits for its employees.
January 1st, but it can make sense at other times, depending on how the PEO setup is handled.  Some clients prefer to start January 1 due to tax implications.  Others prefer to make the change when their benefit plans renewal since rates and plans are usually changing anyway.  It all depends on the primary reason for the change.
Fortune 500 benefits for all size employers.  PEOs also have “skin in the game” with your compliance issues, because everything is reported under their FEIN number.
The client still has a right to the information and employees that it has co-employed with the PEO. In some states, there can be a risk to the client if the PEO has not paid all of their liabilities. But in most states, if you have paid your invoices timely, then your co employment liabilities terminate when you leave the PEO.
No.  If it’s handled professionally, your employees will see an increase in benefits, and an increase in your focus as the details fall off your desk.  A PEO cannot change or govern your internal culture, no matter what the contract says.
In most cases, both the client and PEO name appears on the paycheck.
Yes. The PEO will administer the forms, etc., but you are required to comply with FMLA since the PEO generally has more than 50 employees.  However, the hardship rule can sometime be applied to your business.
Sometimes.  There are many PEOs that allow this setup, and will still administer your benefits.  Most national firms do not allow this.
Those agreements stay in effect between the client and the employee.  If there are glaring differences between the agreement and the Policies of the PEO, they may need to be discussed to ensure congruency in the event of a claim.
In most states, The PEO rate is used.