Any business can find value in an HRO relationship. Our clients include many different types of businesses ranging from not-for-profit organizations to high-tech companies, professional services firms and small manufacturers. Increasingly, larger businesses also find value in HRO arrangements.
3. How do HRO arrangements work?
We provide HRO services through a Professional Employer Organization (PEO) model or an Administrative Services Outsourcing (ASO) model.
Utilizing our PEO model, we enter a contractual relationship with our client to co-employ our client’s worksite employees. In a co-employment relationship, QTI Human Resources and our client each have an employment relationship with the employees. Under the contract, employer responsibilities and liabilities are assigned to either QTI Human Resources or the client company, while others are shared. We assume much of the responsibility and liability for the business of employment, such as risk management, human resource management and payroll and employee tax compliance. Our clients retain full authority and responsibility for their entire business operations including production, marketing, sales and service. As a co-employer, we provide a complete human resource and benefit package for worksite employees.
Utilizing our ASO model, we provide a comprehensive approach to many of the human resources functions supported in our PEO model. The most significant difference lies in the absence of any direct employer relationship with our client’s staff. Our clients retain full management and employer responsibility with us acting only as the administrator for human resources, payroll, benefit administration and workers' compensation and risk management.
4. Why would a business use a PEO?
Most business owners manage their businesses to earn a profit. Day-to-day management of "non-core" activities often creates distractions unrelated to their core business. As the business continues to grow, owners and managers may not have the requisite training or internal resources in the areas of payroll, human resources, risk management, regulatory compliance and employee benefits programs to address the needs of their staff. We bring large-group HR resources, HR expertise and access to benefit plans and programs our clients may not enjoy otherwise.
5. Do the business owners lose control of their businesses in a PEO relationship?
No. In fact, they may gain better control of their business. Our clients retain complete ownership of their company and exclusive control over its daily operations. The management relationship that our clients have with their employees continues, but the partnership with QTI Human Resources enables you to offer improved HR-related products and services.
6. How do employees benefit from a PEO arrangement?
Employees seek financial security, quality employee benefit programs, a safe working environment and opportunities for retirement savings. When a company works with a PEO, job security is improved as the PEO implements efficiencies to lower employment costs. Studies indicate job satisfaction and productivity increase when employees are provided with professional human resource services, training, employee manuals, safety services and improved communications. And in many cases, a co-employment relationship provides employees with an expanded employee benefits package, including a 401(k), life insurance, disability insurance, a flexible spending program and more.
7. What is the difference between PEOs and employee leasing?
Through our PEO model, QTI Human Resources does not supply labor to worksites. We supply services and benefits to clients and their existing workforces. We enter into a co-employment arrangement typically involving all of the client's existing worksite employees in a long-term relationship and sponsor benefit plans for the workers and provide human resources services to the worksite employer. If the PEO relationship is terminated, the workers’ co-employment arrangement with QTI Human Resources ceases, but they will continue as employees of the client.
A leasing or staffing service supplies new workers, usually on a temporary or project-specific basis. These leased employees return to the staffing service for reassignment after completion of their work with the client company. Upon termination of the staffing or leasing company arrangement, the workers have no continuing employment relationship with the client.
8. How do HRO services help clients control costs and grow their bottom line?
Our economy of scale enables client companies to lower employment costs and increase the business's bottom line. QTI Human Resources provides significant technology, service infrastructure and platforms to assure compliant delivery of contracted services. We provide valuable time-savings by handling routine and redundant tasks associated with payroll and payroll taxes, human resources management, employment practices and regulatory compliance issues.
9. Do workers receive comprehensive benefits?
Frequently, a PEO arrangement is the only opportunity for a worker of many small businesses to receive Fortune 500 quality employee benefits such as health insurance, dental and vision care, life insurance, disability insurance, 401(k) retirement saving plans, flex plans, etc. Without PEOs, typically a small business can neither manage nor afford to offer these benefits to their employees. PEOs are able to assist clients by providing these benefit programs at attractive rates to employers and employees alike.
10. Who is responsible for the employees' wages and employment taxes?
Utilizing our PEO model, we assume responsibility and liability for payment of wages, as well as compliance with all rules and regulations governing the reporting and payment of federal and state taxes on wages paid to your employees. The IRS recognizes QTI Human Resources as an employer for federal income and unemployment taxes, and case law affirms the principle that PEOs are responsible for payroll taxes.
11. Who is responsible for state unemployment taxes?
Utilizing our PEO model, we assume responsibility and liability for payment of state unemployment taxes. Most states recognize QTI Human Resources as the sole responsible entity, while few states require us to report unemployment tax liability under our clients' account number.
12. Who is responsible for workers' compensation?
Utilizing our PEO model, we are generally recognized as the employer for purposes of providing workers' compensation coverage, although the exact responsibility depends on various factors, including individual state statutes and insurance carriers.
13. Does QTI Human Resources have to process the payroll?
Yes. Paying wages is an essential component of the co-employment relationship. Without this component, we would not be able to provide workers’ compensation, health benefits and various other services that rely upon the co-employment relationship’s existence. Employers provide the salary and hours for each worksite employee and we process the payroll and file all payroll-related taxes and reports.
14. Why is QTI Human Resources better than a payroll service?
Our services are much more comprehensive than a payroll service provider. We not only administer your payroll but have numerous specialists managing your workers’ compensation, unemployment and benefits programs, as well as handling regulatory compliance, filing and record keeping and human resources.
15. Is QTI Human Resources a member of any trade organizations?
QTI Human Resources has been a member of the National Association of PEOs (NAPEO) since 1995, and is committed to the ethics and principles inherent in this organization. Our leaders have served on NAPEO’s Board of Directors and continue to serve on NAPEO’s Legal Advisory Council and Government Affairs Committee.