PEO vs. Independence
Employee leasing companies, also known as Professional Employer Organizations (PEOs) were formed with a wonderful concept in mind. A third party in the form of a PEO would go to smaller companies, hire all of their employees and then lease them back to the employer for a fee. The idea was as the PEO continues to add employees, they will be in a better position to negotiate lower rates for medical insurance, workers’ compensation and payroll processing. However, for a number of reasons, Professional Employer Organizations no longer offer a way for employers to save money. In fact, the cost of contracting with a PEO has risen dramatically in the last few years.
SUCCESS STORY
65 PERSON GROUP
PEO |
|
INDEPENDENCE |
| $67,200(*) |
Administrative Premiums |
$6,000 (Payroll) |
|
|
$ 35,000 (HR) |
$25,000 |
Workers’ Compensation Premiums |
$22,000 |
$362,300 |
Medical Benefits Premiums |
$287,244 |
$454,500 |
Total Costs |
$350,244 |
| (*)Includes payroll and Human Resource Services |
|
McKenzieHR saved this company a total of $104,256
Before signing with a PEO, look at your options and…..
What the PEO’s Say |
Independence
|
Your employees will be protected under the equal employment opportunity laws.
|
Companies with less than 15 employees cannot be sued under the most common Federal or State of Florida Discrimination laws.
However, by signing with a PEO, the PEO becomes the employer of record and your company as well as the PEO can be jointly sued for discrimination or harassment.
Interestingly, Florida law holds employee leasing companies harmless from the discriminatory actions of client employers. So you may have to go it alone if your company is accused of discrimination or harassment.
|
The PEO will provide their clients with Employers Professional Liability Insurance (EPLI) Coverage in the event an employee sues you.
|
EPLI is good protection in the event that an employment related case goes to court. EPLI coverage varies from company to company, so clients must be aware of what they are buying.
The best way to avoid exposure to complaints of discrimination or harassment is to take the necessary precautions to stop the behavior from occurring in the first place. McKenzieHR will ensure that you have the processes in place to greatly minimize the risk of being sued for discrimination or harassment. |
The PEO will provide all of your workers’ compensation insurance coverage.
|
In 95% of the cases we have seen, workers compensation is less expensive when independent of the PEO. The best way to keep your workers compensation premiums down is to have a well thought out safety program designed to prevent accidents from happening in the first place. McKenzieHR will do this for you.
|
A PEO states that they will provide all human resources services for less than it would cost to hire a human resources manager.
|
In one recent example, a PEO was charging a 65 person company $67,200 per year to provide payroll and HR services. Nothing is customized to the client.
McKenzieHR provided a full range of customized services to this client for $36,000 per year. No extras, no add-ons and no nuisance charges – just a flat fee every month. The payroll cost was $5,200.
The client saved $20.000 and is receiving a high level of service. |
We will provide all the human resources services you will need.
|
Few, if any, PEO’s offer a full range of human resources. Such areas as Federal Contract Administration, development of an Affirmative Action Plans, Performance Management or Compensation Administration and customized training are rarely offered by PEO’s.
These services are all included in the monthly fee with McKenzieHR |
A PEO bundles all of your HR related services including workers compensation, payroll, benefits administration and Human Resources Management under one umbrella.
|
With McKenzieHR – you have complete flexibility. By remaining independent, you have the flexibility to choose the services that fit the needs of your company.
If you are not satisfied with one of the services provided by the PEO and want to change vendors, you have to find a new payroll processor, a new workers compensation carrier, a new benefits broker and a new provider of human resources services. |
All we have to do to get you going in this PEO is sign a contract.
|
McKenzieHR proposals are two pages long and list the services we will provide – not a bunch of legalese and release statements.
|
McKenzieHR will act as your human resources expert to do all of the legwork for you in gathering payroll, workers compensation and employee benefits quotes for you.
You have the flexibility to choose whichever vendor you want, or McKenzieHR can recommend payroll, workers compensation and group benefits vendors for you.
Our strategic partners include:
SingleSource
Coordinated Benefits Group
Cecil Powell Insurance
Lassiter Ware
Paycor
|