FAQs

 

Frequently Asked Questions:

 
1. What is a PEO broker?
A. A PEO broker uses their understanding of the PEO market to help companies find the right PEO outsourcing solution for their business. The broker works for the company looking for PEO services and not for the PEO. Brokers have become very popular in the PEO market because the PEO market is so complex and difficult to maneuver successfully without expert knowledge of the differences between each PEO.

2. How is Foundation PEO different from other PEO brokers?
A. There are different brokerage models in the market. Some brokers just act as a digital clearing house for pricing and others just pass on leads to different PEOs. We believe that the best way to broker PEOs is to be more hands on. We want to meet our clients to make sure we understand their needs to help us decide which PEOs would have the right suite of services and culture to create a long-term fit for both companies. We stay actively involved throughout the RFP process and help the business compare the different proposals in an “apples to apples” manner. We also stay in touch with the business to monitor the on-boarding process and the satisfaction with the PEO’s services.

3. What exactly is a PEO?
A. A PEO (professional employer organization) is an integrated outsourcing company that provides HR services, payroll, risk management, workers’ compensation and benefits. The PEO can aggregate all of the employees that use its services to achieve scale and leverage when purchasing services for their clients. This means that a company with 50 employees could get the benefit of thousands of PEO employees being used to price benefits for that 50 employee company.

4. What is co-employment?
A. Co-employment is something unique to PEOs in the outsourcing industry when compared to payroll companies and ASOs. Co-employment is the concept of the employee being shared by the client company and the PEO. The client company will maintain their ability to direct their employee’s daily work activities while the employee is held under the PEO’s FEIN. Having the PEO use their FEIN allows the PEO to aggregate the employees for pricing of services in the market. It also allows the PEO to be held accountable for payroll issues around tax withholdings, garnishments and other required reports.

5. What does “fractional usage” of a HR representative mean?
A. Most companies do not have enough HR problems to warrant having a full time HR specialist employed at their company. However, when there is a need for HR support, you really need “expert advice” from a specialist who can quickly and efficiently help a business deal with an HR issue. Fractional usage allows the PEO to maintain the HR specialist as their full time employee while allowing you access to that person when you have a situation arise.

6. Why is the PEO industry so complex?
A. The PEO industry is still a relatively young industry and so it has yet to completely solidify standards across all PEOs. With 700+ PEOs, there can be significant differences in the quality and service that is provided. These differences puts the business owner at a disadvantage when buying PEO services. For example, some PEOs only have paper on-boarding for new clients, while others are completely electronic. Additionally, some PEOs have national capability to handle employees in multiple states, while other PEOs operate in one or just a handful of states. A PEO broker can help a business save a significant amount of time by ensuring that they are talking to the right PEOs for services.