6 Advantages of a PEO during COVID-19
As COVID-19 unfolds, the importance of a PEO for a Small Business becomes evident. How can you protect your employees while also managing costs? Here are examples of how our PEO clients have benefited.
1. Rapid Law Changes
With recent CARES Act and FFCRA(Families First Coronavirus Response Act) to help struggling businesses, overwhelming info and regulations have mounted for the small business owner. Who is eligible for benefits? Tax credits? Furloughs and COBRA? Is their business Essential? Paid Sick Leave eligibility and additional tax credit entitlement?
PEOs provide a full team of experts who anxiously awaited the legislation, final rulings, and updates on all the Acts. They spend countless hours diving into legal jargon to answer business owners’ questions. Then, PEOs work alongside organizations to implement processes that assist in keeping the business compliant. They also help employees through the difficult time, with the livelihood of the business always in mind.
2. PEOs help with Paycheck Protection Program (PPP) loans through the CARES Act
Lenders are asking for historical payroll data and tax reports quickly produced by a PEO’s HRIS System. Many small businesses without HR help find these systems financially draining. Example: Needed 940/941 reporting is issued which can be sent to SBA Lender. Also, several leading PEO’s have supported clients with NYS Shared Loans Program.
Working with clients to understand options.
3. Payroll Burden
Payroll administration is now a nightmare. Tracking the FFCRA emergency sick leave and expanded FMLA separately from regular sick and FMLA leave has thrown a wrench in many payroll processors’ systems. Add on any furloughed or terminated employee reporting and tracking, and now the job has doubled.
Instead, our PEO Clients are spending their time on mission-critical work that could make or break the business. Additionally, their payroll is processed by professionals who have the time and expertise to know the nuances of payroll and payroll tax laws with back up teams of professionals in place.
4. Staffing Needs – On-Boarding and Terminations
A minimum 75% of PPP loans must be spent on staffing costs. Companies that had previously furloughed or terminated employees find they need to hire employees back. This comes with additional paperwork and many employee questions, such as whether benefits wait periods start over.
Conversely, when businesses do need to furlough or terminate employees, the PEO is a great guide for compliance. The layoff process, COBRA, paperwork including government reporting are supported.
5. HR Excellence
Partnering with a PEO is much like gaining access to a full-service HR division, with a team of HR experts who are up-to-date with new and changing employment laws and able to identify ways to streamline your HR.
According to a report conducted by the National Association of Professional Employer Organizations (NAPEO), PEOs provide access to more HR services at a cost that is close to $450 lower per employee, compared to companies that manage their HR services in-house.
Studies show that businesses in a PEO arrangement grow 7-9 percent faster, have 10-14 percent lower turnover, and are 50 percent less likely to go out of business.
6. Affordable and Better Benefits
By joining a large group risk-pool a a PEO can help employers gain access to high quality employee benefits, such as health insurance options with stable and affordable rates. Due to costs, small businesses often find high-quality employee benefits out of reach. The savings on health insurance alone can pay for the PEO itself.
If you’re interested in hearing more about the advantages of partnering with a PEO, we’d love to talk to you. Fill out the form below or email [email protected] for a FREE Consultation Today!
The information provided on this website is intended for informational purposes only. Millennium Medical Solutions Corp. does not offer legal or medical guidance. Those with legal or medical questions should seek appropriate assistance from a licensed professional. Stay up to date by signing up for Newsletter and Coronavirus Dashboard below.