PROFESSIONAL EMPLOYER ORGANIZATION (PEO)
Over the years, the Professional Employer Organization concept has been growing in popularity.† A Professional Employer Organization is referred to as a PEO.
- It allows a transportation company to focus on their core business, which is trucking; and
- It's a program that, if structured properly, meets the personnel management demands of the 21st Century, and beyond.
For many small to medium-sized trucking companies, they struggle on the day-to-day issues of;
- Personnel management.
- Payroll processing.
- Benefits procurement and administration.
- Human Resource responsibility.
When companies try to handle all these complex issues themselves, it becomes an overwhelming task.† If you hire a properly-run Professional Employer Organization, many of these issues are physically removed from your premises, and are handled by an off-site team of specialists.† Therefore, you and your management team saves;
- Overhead; and
- You have the potential to improve cash flow.
A PEO program can also reduce such direct cost as;
- Workers' Compensation Insurance
- Unemployment insurance; and
- Health benefits.
If you are like many owners or managers of trucking and logistics businesses, you are already leasing office space, production or warehouse space, operating or leasing office equipment and vehicles of various types.† For many of the same reasons you initiated those leases, you might want to consider a PEO program.
THE SOLUTION TO YOUR PERSONNEL ADMINISTRATION PROBLEMS
Ahern & Associates is a transportation consulting firm with extensive experience in reviewing Professional Employer Organization programs.† The management of Ahern & Associates, Ltd. has substantial experience in a wide range of programs.
Ahern specializes in the application of PEO concepts in the trucking industry.† We understand the concerns of our clients; we analyze the PEO, and we are able to thoughtfully recommend a program and process that will enhance the working relationship necessary for success.
HOW DOES A PEO WORK?
The PEO Administrator Company "hires" your current employees, becoming their administrative and W-2 employer.† You, as the client, remain the supervisory manager of the day-to-day activities and you do not lose control.
- The PEO Leasing Administrator manages complete payroll and tax obligations.
- They provide a variety of cost-effective Employee Benefit Plans, including Workers' Compensation Insurance; and
- In many instances, they offer optional choices of personnel services that could include:
- Medical & Dental Benefits;
- Pension & Disability Coverage;
- Human Resource Management;
- Section 125 Cafeteria Program;
- 401(k) Plan;
- Recreational/Vacation Packages.
In essence, if you hire a properly structured and financially secure Professional Employer Organization, you are able to outsource numerous functions with a higher the level of expertise.
The trucking industry is a complex industry.† We are highly regulated by the Department of Transportation; we are inundated with CSA compliance issues and Hours of Service issues, and if you can outsource some of your services, it is something that needs to be considered.† However, it's also important to understand that all PEO companies are not the same.† It is very important that you review their financial stability and the basis in which they process and administer your program.
Many times I'm asked if a PEO disrupts the normal business routine, and normally, it does not.† In fact, once you go through the transition it allows you to focus on your transportation business and grow your operations;
- You don't need to worry about payroll preparations.
- Tax deposits.
- Quarterly and annual tax reporting; or
- Specific insurance premium payments on some insurance coverages.
The time you previously spent on personnel administration, payroll, and the negotiation of employee benefits, workers' compensation insurance, etc. can now be devoted to generating more business: improving your bottom line and creating new products and services to enhance your business.
Is a Professional Employer Organization for everyone?† No!† Does it provide certain levels of expertise?† Yes!† Anytime you are able to outsource employee issues, such as: benefit claims, taxes: employee-related issues, including wage garnishments, EEOC, NLRB, DOL, and any other federal and state agency-related issues, it's a way to outsource those functions to someone who, in many instances, is much more capable.† Does that eliminate your exposures if something happens?† No!
It is very important that as you are reviewing a PEO program that you get competent advice from a third party that understands how these services work.† The basic premise of any PEO is to collect a fee for services rendered.† Therefore, it's very important that you get the services that you anticipate before you engage into a written contract.†
WHY SHOULD YOU CONSIDER A PROFESSIONAL EMPLOYER ORGANIZATION?
- In many instances, it can improve the company's overall cash position.
- It frees many companies of the internal costs and excess paper flow of processing payroll and benefits.
- In many instances, you have access to legal advice, regarding employee relations without hourly attorney charges.
- You are able to utilize and retain high-quality employees, by offering benefits comparable to those of much larger companies.
- You have a free source for tracking the local, state, and national regulatory compliance requirements.
- You have access to Human Resources advisors to assist in recruiting and termination procedures, loss control, risk management, drug and alcohol problems, and overall employee policies and procedures.
In essence, a PEO Administrator handles the following responsibilities:
- Calculates wage and payroll deductions.
- Process payroll deductions and wage garnishments.
- Reconciles payroll accounts.
- Prepare management information reports, and
- Prepare and deliver payroll reports.
From a tax standpoint:
- They calculate and deposit Federal and State withholding.
- They track payment of FICA, FUTA and SUTA taxes.
- They prepare and file of all payroll tax reports.
- This eliminates late fees or penalties on payroll taxes.
- They prepare year end W-2 forms.
- They handle employee inquiries.
In reference to employee benefits, in some instances, a PEO is able to offer benefits at a substantially reduced cost to your employees.
The most important functions a PEO is involved with includes:
- Unemployment compensation claims.
- Workers' compensation claims.
- State Department of Labor claims.
- Federal wages and hour claims.
- Unfair labor practice claims.
- Discrimination claims.
- IRS payroll audits.
- State Department of Revenue audits.
- Department of Employment Security audits.
- Wrongful termination actions.
- Employment regulatory compliance audits.
- They keep you updated on regulatory requirements.
However, ultimately, regardless of what your contract states, if the PEO does not perform, you can still be deemed legally responsible.† The premise behind joining a PEO is to take advantage of purchasing a plan designed to lower employee support costs; increase morale and efficiency; assure compliance with ERISA, COBRA, OSHA, (if applicable); offer cost effective benefits to retain employees, and outsource regulatory issues to assist companies in compliance.
Arkansas Transit Home, Inc. (ATH) was founded in 1958 by my late father, Wendell Chandler. In fact, to Illustrate how long that is got most trucking companies, our DOT number only has five numbers.
I would like to thank you Andy for making this very important and life changing event possible. It was a great experience.
Arkansas Transit Homes, Inc.
We have worked with you and your colleagues at Ahern Associates for some time now. We find your expertise in the area of logistics (be it in consulting or based on being hired for acquisition analysis) to be out standing. We value the relationship and are very happy to give you this letter of reference..
You should feel free to have any party call us to discuss our experience.
Benesch Attorneys at Law
England has been formally associated with Andy Ahern and his colleagues for approximately the past three years primarily in the area of acquisitions. During that period, we have experienced a professionalism that is refreshing. Andy offers in-depth expertise as well as industry knowledge born from extensive experience, a combination which adds material value well beyond a normal business relationship.
We anticipate a long Ė term, mutually beneficial association. It was a great experience.
Very truly yours,
Keith c. Wallace,Jr.
Senior Vice President / Chief Financial Officer
C.R. England, Ind
Century Carriers, Inc. and its subsidiaries are family owned businesses that was started 1998. When the Transportation business was booming, times were great but, like other family owned businesses we didnít prepare for the economy the past year. My wife and I lost many hours sleep and made many calls to attorneys, banks, and whom ever would listen to our story trying to figure out how we were going to save our business for our future and our children.
Andy and his team has given us hope that there is light at the end of the tunnel and we are making progress, thanks again.
Kevin Henderson, President/CEO
Century Carriers Inc. / Century Expedited Inc.
Originally, I met Andy at a Truckload Carrier`s Conference during a round table discussion on the transition of family business. Andy was very knowledgeable about the topic and expressed many ideas that we hadn`t thought of. During the down turn of our industry in 2001, We called upon Andy, as a consultant, to help us understand how to turn our business around. We hired Ahern and Associates to come in and do businesses review. By giving us a road map to success with their intial audit, they helped turn our business around within thirty days.
Andy Ahern and Ahern & Associates have always delivered exactly what they have promised.
Don Christenson, President
Christenson Transportation, Inc.
We have thought about selling our business one day, but we really didnít know much about how to go about it. Your company contacted us a few months ago about a client of yours that was looking to buy businesses like ours. Now just a few months later, the sale is complete. Everything went very smoothly, Ahern was there to guide us through the beginning of the process. We are very happy with our whole experience with Ahern, especially Andy and Brian. They gave us personal attention any time we had questions or concerns.
John & Jennifer Rainney
I wanted to thank you for your guidance, leadership and support. The professionalism and dedication of you and your staff is outstanding. The knowledge you posses of the transportation industry and its inner workings was been a huge asset to us in our time of transition. With your assistance we have been able to make significant changes within our company to improve structure and productivity. Aherns onsite visit and detailed evaluation of our company has been a very valuable tool. The outside look at how we do business and the suggestions you've made to improve our overall performance have been very valuable. All of your advice and direction has been thoughtful and caring, I feel that you truly care about our business and success. You've done everything you said you would do and then some, working with you and your dedicated staff has been a pleasure and will improve the productivity of our company. I look forward to a long relationship with Ahern and Associates.
Specialized Business Solutions. INC