My company doesn’t want to use a PEO, what do I do now?
If your company is NOT considering using a Professional Employer Organization or is considering leaving your current PEO to do things "in-house", here is a quick check list of things to get done.
Establish your federal payroll tax (FEIN) withholding account.
establish applicable state tax withholding account(s).
Establish a Federal Unemployment tax (FUTA) account.
Establish a State Unemployment tax account.
Determine risk type for workers (workers compensation classifications) and shop for Workers' Compensatio insurance.
Purchase Workers' Compensation coverage and pay up front for at least three months of coverage.
Ensure your payroll system is set up to file Federal forms including W-2s, W-3s, W-4s, 940s and 941s (quarterly).
Obtain, prepare and file Immigration & Naturalization I-9 forms (new versions) for existing staff and new hires. Handle any respondent No-match letters from the Social Security Administration (SSA).
Handle paperwork and assume employer liability for all court orders, wage garnishments and tax levies. Ensure levy deduction priorities are followed.
Submit reports for New Hire Reporting to State Agencies.
Determine your company’s willingness to contribute to employee benefits.
Research, price, compare, obtain and monitor employee benefits which might include medical, prescription card, dental, life insurance, AD&D, disability coverage, Employee Assistance Program (EAP) and Credit Union. Determine and communicate effective date of new coverage for employee benefits.
Ensure 1993's Health Care Financing Administration (HCFA) filing requirements are met along with administrative requirements associated with the new 1997 Health Insurance Portability and Accountability Act (HIPAA).
Recognize your liability and implement policies to ensure compliance under the ADA, Title VII (EEOC), Civil Rights Act of 1991, Fair Labor Standards Act and Age Discrimination in Employment Act.
Make arrangements to set up and manage reporting requirements for IRS Section 125 (Cafeteria) plan if you intend to keep this tax advantage.
Make arrangements to set up a 401(k) plan . (Be aware of the differences between Highly Compensated Employees (HCEs) and your other workers since you will not be part of a "large employee base" plan).
File Federal Form 5500 for your 401(k) plan.
Analyze your cash flow to account for the switch from a scheduled budget allocation for employment services to irregular payments and periodic lump-sum amounts for these services.
Implement a payroll solution with either an in-house software solution or a service bureau. Ensure all payroll and tax withholdings are accurate.
Because a PEO offer relief from many of these business related challenges, thousands of companies across the USA are now using a PEO to help make their business more successful.