The theory of an employee leasing company is not something new. Agencies have been providing temporary employees to businesses for decades. But employee leasing for the long term has recently become more mainstream with business owners looking for options in dealing with an in-house human resources department or hiring and managing employees independently.
In California, employee leasing companies take care of locating qualified candidates, distributing payroll, and dealing with employee benefits allowing you more time to concentrate on your actual business.
What Is a California Employee Leasing Company?
An employee leasing company, also known as a professional employer organization (PEO), seeks out talent for your work environment. They deal in personnel for a wide range of businesses, including but not limited to:
- IT technology
- Real estate
If you are the owner or manager of a business, you can benefit from a PEO.
Services a PEO Can Provide for Your Company
Along with employee recruitment, a PEO can provide all services that an internal human resources department would handle. Such issues include:
- Payroll including 1099 and W2 information and forms
- Benefits such as medical insurance, paid leave, and retirement
- Risk assessment to aid in the prevention of workplace injuries
- Workers’ Compensation claims, including investigation and filing forms, when necessary
Your Business’ Employee Policies and Labor Law Compliance
As with an HR department, your employee leasing company can help you develop essential universal policies for your business that comply with federal and California employee labor laws, customized for your type of business. Some of those policies could include:
- Employee classifications
- Timekeeping for hourly workers
- The necessity for breaks, including meal breaks
- Safety issues
- Harassment and discrimination issues
- Employee conduct issues
Remember that this is your business, and the PEO is available to assist you. Your PEO will not implement any employee policies or procedures without a thorough discussion with you and having you sign off on them ahead of time.
Who Benefits Most from a PEO?
Companies of any size and their employees benefit from an employee leasing company. A PEO takes care of the daily issues of employee management, so company owners do not have to. Employees are pleased with the knowledge and efficiency of the PEO team.
Some advantages of working with a professional employer organization include:
- Lower Employee Turnover as employees through a PEO are interviewed in-depth regarding their training, experience, and needs, before being introduced to you
- Cost-Effectiveness for human-resource-related issues through proper compliance plus potential savings in benefit costs and worker’s compensation insurance
- Access to Better Employee Benefits due to the knowledge and experience the PEO brings to the table
You will also get a better night’s sleep. Let’s face it; most bosses are not prepared to deal with the everyday management of their employees. That is what the staff at a PEO does every day, and most of them are very good at it.
Is the Cost of an Employee Leasing Company Worth the Expense?
When you contract with a California PEO, you should fully understand its fees and cost structure. PEO administrative fees are figured in one of two ways:
Percentage of Payroll
This is often the choice of a new business or a small one. Depending upon the services you require, you pay between 2-12% of your total payroll expenses as an administrative fee to your PEO. That fee generally falls somewhere about in the middle.
Flat-Rate Per Employee
Allowing flexibility for growth, this rate is also based on your payroll. You will average between $40-$160 per employee per month. Again, look toward an average figure in the middle per employee per month.
You will likely see significant savings when you weigh the cost against setting up and managing your HR department.
How Your Partnership with a PEO Works
Business owners who do not fully understand what a professional employer organization does may be concerned about the employees their hire through them. While you relegate the responsibility of human resources to the PEO, the PEO does not oversee the work an employee is tasked with, nor their performance. As the business owner or manager, you remain in charge of hiring or letting go of employees.
Partnering with a PEO does not affect the way you run your business. What it does do is provide you peace of mind when it comes to your employees – that you are complying with state and federal labor laws and providing solid benefits for your employees.
Why Use NetPEO?
Consider NetPEO, an agent connecting you and your business with one or more professional employer organizations that best fit your needs. We network with PEOs across the state and the country.
To find a fit for your business, we take the time to learn about your company and its needs for employee services. We can then match you, the business owner, with PEO specialists we feel will work the best for you and your type of business. We may offer you more than one choice to look at in a California employee leasing company.
You can then decide on the company of your choice and how you want to utilize them. If you feel you do not need all the services they have to offer, there is no need to sign up for the inappropriate ones. You choose how your PEO specialists can best work for you.
Our Services Do Not End with a PEO Match
NetPEO is dedicated to providing top-quality satisfaction. We continue routine communication with you even after setting up your PEO services. We continually want your reviews and input.
If needed, tell us how we can do better. Our focus is to help you, the business owner and manager, with your employee services.
If you are reading this, you have realized you want help in hiring and managing your employees. Reserve a half-hour window of time to chat with a member of the NetPEO team and let us see how we can help you. Contact us today!