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
Workers
Compensation
Human
Resource
Compliance
State/Fed
Payroll Filing
Payroll Taxes
& Audits
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 nonrevenue producing tasks related to
running the business.
What’s It Cost Now
~U.S. Dept. of Labor & U.S. Chamber of Commerce~
# Of Employees
Administrative Cost
1-9
8-12%
10-24
4-8%
25-49
3-6%
50+
2-5%
~Small Business Administration Says~
Cost Per Employee for firms with:
All Firms
Type of Regulation
All Fed Regulations
Economic
Workplace
Environmental
Tax Compliance
$5,633
$2,567
$ 922
$1,249
$ 894
<20 EE’s
$7,647
$2,127
$ 920
$3,296
$1,304
20-499 EE’s
$5,411
$2,372
$1,051
$1,040
$ 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
Potential Results

Administration Fee based
on % of payroll

Could incur higher
expenses for the same
level of service

Some PEO’s will continue
charging for FUTA & SUTA
after limits

Huge overpayments

Limited to insurance
companies & plans
offered

Lack of flexibility

Co-Employment causes a
contractual allocation &
sharing or ER
Responsibilities

Employee confusion

Treated as Large
Employer for Health
Benefits

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 Product
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Transfers some of the substantial liability that
business owners have.
Improves Cash Flow and allows for a more
accurate budget forecast.
Human Resources Solutions.
Insulation for the client companies state
unemployment tax rate. (In many states)
Customized employee handbooks.
Competitive Workers Compensation Rates.
Enhancement of clients current safety program.
Employer Practices Liability Insurance.
Full suite of employee benefit programs.
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
Jerry McGinn

Client Advocacy
215-350-7304
THANK YOU
jerrym@danekerdean.com
www.danekerdean.com