California, by itself, would be about the fifth largest economy in the world. And that makes perfect sense. It’s the world’s leading location for the entertainment industry, the home of Silicon Valley, and an agricultural powerhouse. This is just the tip of the iceberg. Opportunity is everywhere for California based startups and small businesses.

Why Do You Need a California PEO Company?

Yet that same business environment can be confusing, especially from a labor law, payroll, and HR perspective. There’s so much to know that its difficult for a business owner or manager to be up-to-date with all the latest information. This is where a professional employer organization (PEO) comes in. It does the HR work so you don’t have to.

Making a selection can be difficult, and there is a lot to need to know about California PEO service providers. Fortunately, we have all the information you need right here.

High-Level Overview of California PEO Services:

PEO service providers can help companies in California in different ways. They consolidate all standard HR services from onboarding to employee termination. Some of the main services provided are benefits provision and administration for employees, payroll management, filing quarterly tax filings, managing workers comp, government compliance management (especially important in California) and employee risk mitigation.

Most California PEOs will also help your business with recruiting, expense reporting, training new employees and much more. Additionally, by transferring your HR functions to a PEO, you gain access to a large employee base that is grouped together for discounted pricing on benefits and workers comp. This lets your HR department control costs and act more efficiently.

Factors for Evaluation of a California PEO Service:

PEO services have many facets to them and all of them vary from company to company. They are all important and we’ve studied each while reviewing the market for the best all-around PEO option, especially in the state of California (not all PEOs operate equally in each state). We’ve reviewed the following features and services when looking at each individual PEO:

• – Tax processing
• – Payroll processing
• – Health insurance options and support
• – HR regulation compliance assistance or management
• – HR management and consulting support
• – Recruiting and onboarding support
• – Safety compliance and risk management
• – Time, attendance, and productivity tracking tools
• – Customer service and feedback
• – Additional features and specializations

There are dozens of high-profile PEO service companies to choose from, so it is important to get the fundamentals down and it was important for us to see which services work best where.

No matter which PEO you end up choosing, we will ensure you receive a full California-tailored PEO solution that fits your needs. Therefore, if a standard service is not mentioned in the recommendations above, please consider it as available.

Benefits Of Using a PEO In California

Insurance Cost Savings – Companies use PEOs to save time and money. Most of the savings come from reduced insurance costs for their business. By using a PEO, you get to leverage their large pool of client employees to get better rates for your business on a variety of items, most notably health insurance.

Less Paperwork – Paperwork is a burden. There are so many more interesting things to do in such a nice state. A PEO uses their technology platform to minimize the amount of paperwork your organization has to manage.

Compliance and Legal – A PEO manages all compliance and legal issues regarding your employees, even the most confusing of state regulations, which is a larger problem in California than most other states. Know that you are safe having the checks and balances managed by the PEO’s system.

FAQ About PEO Companies in California:

What is a PEO? – A PEO (Professional Employer Organization) allows a business to outsource its employee management, have other HR tasks handled for them, and gives personnel management support when needed (most PEOs do this). They manage your payroll, tax forms and payments, insurance (health care benefits and workers compensation) and other benefits such as retirement plans, life insurance, long-term disability insurance, vision insurance, dental insurance, employee wellness programs, and on-boarding new employees.

What Are the Benefits of Using a PEO? – The main benefits of using are PEO are reduced HR costs and their time-saving measures and services. Additionally, they handle HR compliance issues and allow your business to provide more value to its employees, making it a more attractive employer.

How Much Does it Cost To Use A PEO in California? – Generally, it costs between $1,000 – $2,000 per year per employee to use a PEO. The more employees you have, the lower the cost can go. Many California PEOs might offer additional consulting services or additional options, in which case the cost may increase.

How Does the PEO charge? – PEO’s generally charge a percent of overall payroll or an admin fee per employee. We prefer PEO’s that charge the admin fee because those fees are more transparent. We find that PEOs that charge a percent of payroll have more hidden fees when it comes time to pay the bill.

Does it Cost Money to Switch to a PEO? – Generally, there is a setup fee which ranges from $1000 to $15,000 depending on the size and complexity of the business.

How Long Does it Take to Get Started Once I Choose a PEO? – It can range between 3-6 weeks, depending on the PEO. The average time to set up is about four weeks.

Can I Get Health Insurance for Myself and My Family as the Founder? – Some PEO’s offer this option. Others don’t. You will want to ask when doing your comparison shopping.

As the Founder, Should I Pay Myself Using a PEO? – While this may vary depending on the corporate structure of your business, you almost certainly should be using the PEO to do your own payroll.

Are There any Unique Facets about California PEOs? – California is a great market in which to find a PEO, and many providers will have offices in the states, if they’re not headquartered there. We recommend looking for a PEO you can easily communicate with. There are also more PEO services that can provide specialised advice for particular industries, so keep on the lookout for a PEO that tailors services to your type of business.

What is the Best PEO in California? –   Check out our state-based PEO guide here

Conclusion

We understand that California is an economy in itself and trying to pick out a service represent the best of the best PEOs for the state was a difficult task. Nonetheless, we’re confident that one of the above options is the HR and payroll solution your business needs.

What do you think is the best California PEO? Have you used one before? Do you have any questions you’d like to ask us about our provided information? Please leave a comment below, as we’d love to hear your thoughts.