A professional employer organization (PEO) is when companies share the load of managing personnel responsibilities. Typically, one company will manage all the paperwork for employees, including dealing with various tax and insurance requirements, while the other company will manage all the physical worksite requirements, including day-to-day management and workplace safety. This arrangement is particularly useful for the marijuana industry, because it allows PEO services to take care of payroll taxes, thereby avoiding the 10% penalty the IRS assesses to cash-only marijuana businesses.
If you would like to learn about how PEO services can help your business, please contact Ms. Mary Staffing today.
What Is a Professional Employer Organization?
PEOs are not new. They’ve been around since the 1960s, and have proven useful for businesses of many different types.
Basically, PEOs allow a company to outsource many of the necessary functions of a human resources department, especially the paperwork, insurance, and tax requirements. Under this arrangement, the employees essentially become co-employees, with both companies sharing liability and risk for employees, but benefiting because the arrangement allows for greater specialization.
Sharing Responsibility with Our Professional Employer Organization
PEO services come in a wide variety of forms. There are many potential ways that responsibility can be divided among employers. In our typical arrangement, we take on the following duties:
- Pay employee wages and withhold federal and state income taxes
- Pay federal and state employer tax obligations
- Manage workers’ compensation claims
- Provide necessary insurance, including:
- Unemployment insurance
- Workers’ compensation insurance
- Employment Practices Liability Insurance (EPLI)
- Health insurance
- Assist with regulatory paperwork and compliance
Whereas your company will maintain the following duties:
- Day-to-day management
- Maintenance of the work environment, including safety
- Tracking hours worked for each employee
- Accurately reporting hours worked
- Paying payroll funds to us
PEO services let each company focus their efforts in the part of employee management where they have the greatest strengths.
Benefits of a Professional Employer Organization
PEO service benefits for your company include:
- Avoiding the IRS 10% cash handling fee
- Worry-free payroll management by experts
- More time to focus on your business
- Compliance with federal and state tax requirements
- Timely tax filing guarantee
- Workers comp and UI covered
- Recruiting services included at NO Extra Costs
The benefits to your company will help you remain competitive, improve profits, and avoid pitfalls that can trip up businesses in the medical marijuana or cannabis industry.
PEO services also benefit your employees by offering:
- W-2 employment status for tax ease
- Weekly paychecks
- Direct deposit or printed check options
- No need for cash payment
- Pay stub access
- Healthcare benefit packages
These distinctions can set your business apart from others in the medical marijuana/cannabis industry, so that you can attract and retain some of the best talent.
If you would like to learn more about our PEO services, please contact Ms. Mary Staffing today.