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.
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
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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.