Pay1Forward

FREQUENTLY ASKED QUESTIONS

1Q: What is staff leasing?
A: This is a general name for professional employee organizations (also known as PEOs). In a typical situation, the PEO (usually a private corporation) takes the employees of a company and becomes a co-employer. This means the company and the PEO share the management of human resources. The degree of responsibilities shared depends upon the agreement between the company and the PEO.


2Q: Does a PEO take over the entire human resources department of my company?
A: Generally, no. But again, it depends on the agreement between your company and the PEO. Read the fine print and know exactly what functions the PEO would provide. Generally, the more tasks the PEO performs, the higher the fees.


3Q: If the PEO is a co-employer, am I still totally responsible for employee conduct?
A: Yes. There is a misunderstanding that leasing your own staff relieves you of your legal responsibility over the conduct (or misconduct) of your leased employees. In fact, you are totally responsible for the acts of your employees.


4Q: How much does a typical PEO cost?
A: In general, a PEO provides an added service other than processing your payroll. Surprisingly, it costs a lot more than what many employers know. One reason is that PEOs usually state one fee that covers payroll, workmen’s comp insurance, and other desired services. Due to the one price concept, the true cost is not transparent. In general, it costs anywhere from 2% to 5% of your gross payroll. Other costs, such as administration costs, delivery charges, etc. may also be tagged on top of the normal percentage charges.


5Q: Can I manage my own payroll/ human resources department?
A: With the vast availability of resources, it is easier than ever before to manage your payroll, pay workmen’s comp as you go, establish a 401(K), and cafeteria plan online at a fraction of the cost of what a typical PEO would charge..