In a co-employment relationship, both the business and the PEO share certain employer responsibilities. The PEO typically processes payroll, withholds and pays payroll taxes, maintains workers’ compensation coverage, administers employee benefits and provides human resources guidance. This leaves you to manage regular business operations, like providing products and services to customers, and making decisions about which employees to hire or terminate.
But not all PEOs are the same. In fact, hiring the wrong PEO could leave your business at risk for their mistakes. That’s why it’s important to verify that any PEO you are considering is an IRS Certified PEO.
Certified PEOs (CPEOs) have met the rigorous financial, legal and reporting requirements of the IRS. Working with one may afford you certain financial protections and tax benefits, because they have voluntarily certified with the IRS, which ensures tax liabilities remain entirely with the PEO. Only a small percentage of PEOs are certified by the IRS.
The certification program requires a CPEO to post a bond each year guaranteeing payment of its federal employment tax liabilities.
Certification eliminates the wage-base “restart” for certain federal payroll tax purposes if you join or leave a CPEO relationship midyear.
PEOs must renew their certification periodically, proving that they consistently meet fiduciary standards and other requirements.
In addition to IRS certification, PEOs may be recognized by the Employer Services Assurance Corporation (ESAC). Those with ESAC accreditation have demonstrated financial stability, ethical business conduct and adherence to operational standards and regulatory requirements.
A Professional Employer Organization (PEO) can be a game-changer for small to mid-sized business owners seeking streamlined and efficient human resource solutions. By engaging in a co-employment relationship with an ESAC accredited CPEO, such as ours, businesses can benefit from expert assistance in payroll and tax administration, benefits management, regulatory compliance, risk reduction, and comprehensive human resource services. Partnering with our PEO not only helps businesses navigate complex HR challenges but also allows them to focus on their core competencies, leading to enhanced productivity and reduced employer liability.
At Lyons HR, we’re proud to be one of fewer than 3% of all PEOs nationally that are ESAC accredited and IRS Certified. If you’re interested in exploring how our particular PEO services can elevate your business, we invite you to schedule a free discovery meeting with our experienced team.
Lyons HR can help you address all these concerns and more, as you grow your business and position it for whatever the future looks like. Functioning like an off-site HR department, we can manage any or all your talent management needs, from recruitment through retirement. At Lyons, We Are HR. Read our related posts or contact us today to learn more.
Lyons HR functions like an off-site HR department. We offer PEO services, HR services and Payroll services for small to mid-size businesses.
Our affiliations with several accrediting agencies, including the Employer Services Assurance Corporation (ESAC) and the Internal Revenue Service (IRS) ensure our clients receive the highest level of service with demonstrated financial security. Lyons HR is proud to be the first PEO to receive the IRS certification.