Professional Employer Organization (PEO)

MACE

WHAT IS A PEO?

Businesses across America have discovered the incredible value of PEOs because they provide:

Relief from the burden of employment administration.

A wide range of personnel management solutions through a team of professionals.

Improved employment practices, compliance and risk management to reduce liabilities.

Access to a comprehensive employee benefits package, allowing clients to be competitive in the labor market.

Assistance to improve productivity and profitability.

WHAT IS A PEO?

700 TO 900 PEO’S Average client size 20 employees Small business receives Fortune

500 Benefits Employment growth among PEO

employers is 9% greater Better & Safer Workplace

Benefits & Insurance

State/Fed Payroll Filing

Payroll Taxes & Audits

Human Resource Compliance

Workers Compensation

Selecting a PEO

1.Assess your workplace to determine your human resource and risk management needs.

2.Make sure the PEO is capable of meeting your goals. 3.Ask for client and professional references.

4.Does the PEO have a demonstrated history of adherence to the industry's professional performance practices, including responsible financial management of its business? Check to determine if the PEO’s financial statements are independently audited by a CPA.

5. Is the company is a member of NAPEO.

6.Investigate the company's administrative and management expertise and competence.

7.Understand how the employee benefits are funded. Is the PEO fully insured or partially self-funded? Who is the third-party administrator (TPA) or carrier? Is their TPA or carrier authorized to do business in your state?

8.Understand how the employee benefits are tailored.

9.Review the service agreement carefully. What provisions permit you or the PEO to cancel the terms of the contract?

10.Make sure that the company you are considering meets all state requirements.

WHAT IS THE TYPICAL COST PER EMPLOYEE ?

According to the US Department of Labor and the Chamber of Commerce study, if a company has between 10 and 24 employees, it should cost a typical company between 4 and 8 percent of their gross-payroll to perform all the non-revenue producing tasks related to running the business.

What’s It Cost Now

~U.S. Dept. of Labor & U.S. Chamber of Commerce~

# Of Employees 1-9 10-24 25-49 50+Administrative Cost 8-12% 4-8% 3-6% 2-5%

~Small Business Administration Says~Cost Per Employee for firms with:

All Firms <20 EE’s 20-499 EE’sType of RegulationAll Fed Regulations $5,633 $7,647 $5,411Economic $2,567 $2,127 $2,372Workplace $ 922 $ 920 $1,051Environmental $1,249 $3,296 $1,040Tax Compliance $ 894 $1,304 $ 948

It Costs $5,400 per Employee

The Burden of Employment Law There are 96 Federal labor laws

and regulations facing employers today.

PEO’s offer support and understanding of what these laws mean and how they can effect their clients business.

In many cases the PEO absorbs some of these law burdens from the client.

The Current Setup

In most cases the current corporate setup has the “On-Site Employer” attached to each employee directly with no buffer in between.

The “On-Site Employer” has 100% direction and control of the employees and maintains 100% of the liability.

Potential PEO Issues:Potential Issues Administration Fee based

on % of payroll

Some PEO’s will continue charging for FUTA & SUTA after limits

Limited to insurance companies & plans offered

Co-Employment causes a contractual allocation & sharing or ER Responsibilities

Treated as Large Employer for Health Benefits

Potential Results Could incur higher

expenses for the same level of service

Huge overpayments

Lack of flexibility

Employee confusion

Misnomer – The on site employer size would be the determining factor

The Current Setup

100% liability In the area’s that the PEO’s expert staff and professionals specialize in:

Human Resources

Unemployment

Workers Comp

Safety/Risk Management

Commercial Insurance

Employee Benefits

Payroll

Co-Employment

The liability of having employees will be greatly reduced through a legal employment arrangement called: Co-Employment

In a Co-Employment arrangement, the On Site Employer still has the same relationship with the employees, but now the PEO assists in a way that drastically relieves a large portion of your back-office workload.

Co-Employment

The PEO takes over these non-revenue producing tasks:

Human Resources

Unemployment

Workers Comp

Safety/Risk Management

Insurance

Employee Benefits

Payroll

Co-Employment

The On Site Employer still maintains direction and control of the employees-whether in the office or out at a jobsite.

But instead of having to bear the administrative load and liability of the back-office duties, the liability will be transferred to the PEO.

How Is This Cost Effective?

PEO’s stabilize their clients cash flow by eliminating down payments and costly premium deposits.

The Workers Comp is paid with each week’s payroll based on the actual payroll so the insurance cost is always commensurate with the size of the clients body of employees.

PEO is processing the payroll each week, there is no need for annual audits.

PEO’s are able to ensure that their clients unemployment taxes are insulated in a large group, managed by a team of experts.

PEO’s allow their key employees to focus on revenue producing tasks

Multiple Venders Vs. PEO Attorney

Payroll Company

Workers Comp Carrier

Safety Consultant

HR

Employee Benefits

Life/Health

401K

PEO: One source brings the solution to many issues.

Benefits of The Product1. Transfers some of the substantial liability that

business owners have.2. Improves Cash Flow and allows for a more

accurate budget forecast.3. Human Resources Solutions. 4. Insulation for the client companies state

unemployment tax rate. (In many states)5. Customized employee handbooks.6. Competitive Workers Compensation Rates.7. Enhancement of clients current safety

program.8. Employer Practices Liability Insurance.9. Full suite of employee benefit programs.10. Flexible payroll processing and tax

remittance.

OUR BUSINESS MODEL Daneker & Dean pre-screens it’s Professional

Employer Organizations (PEO’S)

We find the best PEO’s that have long term stability

Best Practices and proof of tax remittance.

Several PEO’s to chose from.

The PEO that fits the clients needs.

Eliminate the yearly renewal process related to workers compensation placement.

REVENUE SHARE INCENTIVE PROGRAM

Why Daneker & Dean 100%

Independent Industry

Watchdog Trusted Experts Client Advocacy

THANK YOU

Jerry McGinn

215-350-7304

jerrym@danekerdean.com

www.danekerdean.com