A professional employer organization (PEO) is a firm that provides a service under which an employer can outsource employee management tasks, such as employee benefits, payroll and workers’ compensation, recruiting, risk/safety management, and training and development. The PEO does this by hiring a client company’s employees, thus becoming their employer of record for tax purposes and Social Security purposes. This practice is known as co-employment.
What are the advantage of Professional Employer Organization?
Whether or not a PEO is right for your business depends mostly on these 3 factors:
Factor 1. Number of employees
In general, having more than 10 but fewer than 100 employees could mean a PEO that makes sense for your business. The logic here is that if you don’t have many employees, you can probably handle HR tasks yourself without too much strain. On the other hand, if you have several employees, it’s probably more economical to outsource your HR functions to an organization like a PEO.
Factor 2. Do you want to offer a range of benefits?
PEOs like usually offer a wide array of benefits, including Social Security, Medical insurance, life insurance, and more. These benefits are administered by the PEO, so much of the burden is lifted on your end.
Fit Small Business is part of a PEO for these very reasons. They handle a wide array of benefits that our employees enjoy–health insurance, payroll, compliance, and more–with a fairly reasonable price tag.
Factor 3. Are you in need of HR help?
A PEO can handle the HR administrative tasks like, administering benefits, payroll, vacations and paid time off. This reduces the workload on your end and takes some liability off your shoulders.
Again, if you’re able to do these things yourself without too much trouble, you probably don’t need a PEO, but if you find yourself spending 5-10 hours a week or more on HR tasks like this, it could be worth it to hire a PEO.
How we hire our employees
- We guide you through country specific regulations like monthly withholdings, taxes, social insurances, and employment regulations
- We provide you with an accurate estimate of monthly payroll costs
- We draft a locally-compliant employment contract for you to review and customize
- We send the client-approved employment contract to the employee for final negotiations
- We hold a joint kick off call between Velocity Global, you and your employee
- On-board employee on day 1 of employment
- Monthly on time and accurate administration of payroll, expenses, commissions, allowances and local benefits
- Shepherd you through terminations, whether voluntary or involuntary
Speed to satisfaction
- We take the time to understand our clients and assess their needs, as well as the needs of the employees we support
- You receive an easy to read, fully transparent monthly invoice from Velocity Global for all payroll and fees globally in US dollars
- You are guaranteed incredibly fast turnaround, often within 24 hours or less – regardless of time zone differences
- You and your employee have our support through the duration of the project, maintaining our commitment to spectacular service and responsiveness
- You can focus on your employee’s success in the country while leaving the employment and payroll particulars up to us
- You aren’t required to sign long-term service contracts so that you can stay flexible as business demands change
The Next Steps of International PEO
- With a few simple questions, we’ll determine total cost, start date, and logistics for on-boarding your employee in country
- You sign a contract directly with Velocity Global, and will then receive a monthly invoice for all payroll burden and fees in USD
- We draft a locally-compliant employment contract while your employees continue to operate under your direction
- Leave the monthly payroll processing up to us, so you can focus on your employee’s success in country
How do employees differ from a “Contractor”
While this list should not be considered exhaustive or complete, generally speaking:
- A contractor is rarely paid variable comp – Example: commissions or bonuses
- A contractor does not have business cards in the company name
- A contractor is free to work for other people/companies – and often must prove to governing bodies that they are not employees
- A contractor does not use company provided equipment or receive home office reimbursement