Professional Employer Organization (PEO)

LBMC Employment Partners, LLC, was the first Tennessee-based PEO to receive the Certified Professional Employment Organization (CPEO) designation in the first round of IRS certifications.

It’s probably an acronym that you have heard, but what does it really mean, and is a PEO (Professional Employer Organization) right for you?

What is a PEO?

A PEO is a co-employment relationship that optimizes human resources for your business. The benefit of being part of a PEO means no matter your company size, your employees will be part of a larger pool, giving you lower benefits costs, and a lower cost per employee for all HR services.

The management of employees become more and more complex each day. Alleviate the complexities of Human Resources Management by outsourcing non-core business functions while you focus on revenue-producing operations.

Becoming a member of a PEO provides companies with:

  • Complete HR support
  • More time to run your business
  • Expert compliance management of Cobra, HIPAA, OSHA, ERISA, etc.
  • Efficient payroll processing and payroll tax administration
  • Access to Certified HR Professionals
  • The power of group access for healthcare, retirement services, dental insurance, and disability benefits
  • Access to a larger benefits network, and the ability to offer large-scale benefits to employees

LBMC Employment Partners, LLC, has been a member of NAPEO since June 1999 and is the only IRS certified PEO headquartered in the State of Tennessee.

IRS Certified
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LBMC Employment Partners is constantly rising to the challenge, doing things no other PEOs have done before. We had the unfortunate experience of cycling through several PEOs and couldn’t find the right match. Whether it was too expensive, late payroll, entering incorrect employee information, or just flat out not responsive. Being a local firm who can relate to us has been a breath of fresh air. The transition was seamless. LBMC Employment Partners has saved the day and the relationship we have with them has already reached a comfortable level. The people they have working for them has given us great customer service.
Controller at a Nashville distribution company
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LBMC EP was very detailed as far as what the relationship was and how they could support during the transition. They provided a manual with all materials as far as forms and protocols. They taught me the HR side, as well as the details of the payroll system. They wanted to ensure that I had the tools I needed to be successful. They were more than willing to be available if I had questions along the way. They’re an advocate for the employee and employer…The HR team is familiar with our employees, when you call, they are knowledgeable about the employee and the situation. Our employees are comfortable calling them directly if they have any concerns.
Administrator at a healthcare company in Chattanooga, TN
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As a small company, we grew weary of juggling multiple vendors for payroll and HR, so it made sense for us to consolidate those services. The issue became cost and time, and LBMC EP provides tremendous cost savings. We are not willing to divert our manpower and our work force from doing dedicated work for our clients. LBMC EP is a lot better skilled and trained in these areas. We depend on them as a partner, and they have exceeded our expectations. Additionally, by utilizing LBMC EP we have access to benefits packages that only much larger companies would typically have.
Administrator at a Knoxville engineering consulting firm
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When we decided it was time to find an HR professional to handle things like payroll, taxes, and our employee handbook, LBMC Employment Partners gave us peace of mind. I know that payroll is done professionally, 24 times a year, and I can trust that it’s going to be done as it should be. LBMC is just a phone call or email away, and I feel like they really care about our business and our staff. They remember our employees, and cares about our mission. They are truly helping us to be successful.
Executive Director of a not-for-profit organization in Franklin, TN
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We have been a long-time client of LBMC Employment Partners’ payroll services. Over the past 15 years we have never worried about them being late or something being wrong. A couple years ago, we added on retirement planning. After noticing an increase in health insurance prices, our account rep noted that LBMC could help cut those costs by serving as a PEO. The benefits of joining their PEO were significant, and we immediately started the transition process. We knew a PEO was the right approach and I had no problem understanding the benefits because everyone at LBMC Employment Partners did a great job of explaining the concept and the transition was seamless.
Chief Financial Officer at a Manchester bank
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On our own we could only afford to purchase individual health care policies for our employees, and they were expensive and lacked vision, dental, and life insurance. We also outsourced payroll to another company. Everything was disjointed, complicated and expensive. We invited LBMC Employment Partners to do a cost analysis for us and found their PEO to be a great fit for us. Now, I can rely on LBMC EP to help me with all the personnel, benefits, and payroll matters, so that I can spend more time on my members, our community, and outreach — the things that are most important. The work that LBMC EP handles is a blessing — I’m thankful for their partnership.
Executive Director of an East Tennessee not-for-profit organization
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I have always offered our employees 100% paid benefits. Due to rising insurance premiums, this was getting harder to do. By joining a PEO, insurance costs are manageable again. My insurance premiums were cut in half the first year. LBMC Employment Partners serves as a member of our team making sure that we are in legal compliance and acts as a sounding board, which enables us to run efficiently and focus on our customers.
Owner at a Chattanooga retailer

The Differences Between a CPEO and a PEO

For employers who use a PEO for outsourcing employee management tasks, such as payroll, tax payments, employee benefits, and workers’ compensation, it’s important to understand the difference between a CPEO and a PEO.

With the PEO essentially being the employer of record, it is responsible for filing federal taxes on clients’ employees under the PEO tax ID number. Reports of fraud were alleged as a result of some PEOs collecting the clients’ federal payroll taxes but failing to remit the payments to the IRS. The client company would not be aware of the fraud until it heard it from the IRS — usually many months later. Similar fraud instances have occurred with health benefits. The client company was still responsible for the federal payroll tax payments, not the PEO. The CPEO designation changes that for clients who opt to sign a CPEO client service agreement.

PEO companies who maintain the new IRS CPEO designation offer a greater peace of mind as the IRS also requires ongoing reporting, bonding, and audits by the CPEO to assure all employment tax payments are being made as needed. A CPEO may also enjoy certain tax credits on behalf of its clients, and CPEO clients continue to be eligible for various employment-based federal tax credits.

LBMC EP’s CPEO Designation 

LBMC Employment Partners meets the strict auditing and reporting standards of the Small Business Efficiency Act (SBEA) and will assume financial responsibility for federal employment tax payments for its eligible clients’ worksite employees. Additionally, federal payroll tax liability payments will also be guaranteed under LBMC EP’s posted surety bond as added protection.

The CPEO certification is voluntary, however, LBMC EP wanted to pursue the new designation to prove its commitment to operate at the highest standard.

The IRS does not endorse any particular certified professional organization. For more information on certified professional employer organizations, go to www.irs.gov. 

LBMC Employment Partners Leadership Team

Link to Rebekah Professional Employer Organization

Rebekah Harney

Partner and Chief Business Development Officer, Employment Partners

phone icon email icon Nashville
phone icon email icon Nashville
Link to Anna Professional Employer Organization

Anna Maddox

Chief Human Resources Officer, Employment Partners

phone icon email icon Nashville
phone icon email icon Nashville
Link to Sharon Professional Employer Organization

Sharon Powlus

President and CEO, Employment Partners

phone icon email icon Nashville
phone icon email icon Nashville

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All content and services on this page are offered by LBMC Employment Partners, LLC. LBMC Employment Partners, LLC, is part of the LBMC Family of Companies and is an independent entity with services and products being provided exclusively by LBMC Employment Partners, LLC.