What is a PEO?
Professional employer organizations (PEOs) enable clients to cost-effectively outsource the management
of human resources, employee benefits, payroll and workers' compensation. PEO clients focus on their core
competencies to maintain and grow their bottom line.
Who uses a PEO?
Businesses of all sizes are finding value in a PEO arrangement, because PEOs provide expertise in HR
management and also offer robust Web-based HR technologies. PEO clients include many different types
of businesses ranging from accounting firms to high-tech companies and small manufacturers. Many different
types of professionals, including doctors, retailers, mechanics, engineers and plumbers, also benefit from
PEO services.
How does the PEO arrangement with C2 work?
Once your company contracts with C2, C2 will then co-employ your worksite employees. In this co-employment
relationship both C2 and your company have an employment relationship with the worker. C2 and company share
and allocate responsibilities and liabilities. C2 assumes much of the responsibility and liability for the
business of employment, such as risk management, human resource management, and payroll and employee tax compliance.
Your company retains responsibility for and manages product development and production, business operations,
marketing, sales, and service C2 and your company will share certain responsibilities for employment law compliance.
As a co-employer, C2 will provide a complete human resource and benefit package for worksite employees.
Are PEO's such as C2 recognized as employers at the state and federal levels?
Yes. PEOs operate in all 50 states (C2 operates in 47 States, in three US territories and 11 countries
internationally). Many states provide some form of specific licensing, registration, or regulation for
PEOs. These states statutorily recognize PEOs as the employer or co-employer of worksite employees for
many purposes, including workers' compensation and state unemployment insurance taxes. The IRS has accepted
the right of a PEO to withhold and remit federal income and unemployment taxes for worksite employees. The
IRS has promulgated specific guidance confirming the authority of PEOs to provide retirement benefits to workers.
Why would a business use a PEO such as C2?
Business owners want to focus their time and energy on the "business of their business" and not on the
"business of employment." As businesses grow, most owners do not have the necessary human resource training;
payroll and accounting skills, the knowledge of regulatory compliance, or the backgrounds in risk management,
insurance and employee benefit programs to meet the demands of being an employer. C2 gives small and medium
size business owners access to many benefits and employment amenities they would not have otherwise.
What is co-employment?
As a PEO, C2 Portfolio enters into what is called a "co-employment" relationship with client companies in which
various employment responsibilities are shared. As the worksite employer, you still direct employees in their
day-to-day job-related activities - everything, in fact, except for the human resources administrative function.
As co-employer responsible for payroll withholding and related matters, C2 Portfolio provides and manages
employee benefits, provides employee paychecks and is the "employer of record" on employee W-2s. We deal with the
IRS, Social Security, workers' compensation, EEOC, state labor boards - all the compliance and regulatory matters
that go with employment responsibilities
Will my employee still work for me?
Yes. Technically, your employees will be co-employed by you and C2. You will continue to make all the day-to-day
decisions and your employees will continue doing the job they've always done. C2 will simply handle your
human resources responsibilities, healthcare benefits, retirement savings plans and compliance requirements.
Do business owners lose control of their businesses as a co-employer?
No. The client retains ownership of the company and control over its operations. As co-employers,
C2 and their clients contractually share or allocate employer responsibilities and liabilities. C2
assumes responsibilities and liabilities associated with a "general" employer for purposes of administration,
payroll, taxes and benefits. C2 is also responsible for workers' compensation, and it focuses on working
with its clients to improve safety and compliance. In general terms, C2 focuses on employment-related issues
and the client is responsible for the actual business operations.
What is the difference between employee leasing and a PEO arrangement?
A PEO or co-employment arrangement involves all or a significant number of the client's existing worksite
employees in a long-term, non-project related, employment relationship. The PEO brings services to the client,
including the management of human resources, employee benefits, payroll and worker's compensation. The PEO assumes
employer responsibility for employment tax, benefit plans and other human resource purposes. Through the use of a
PEO relationship, client companies make a long-term investment in their workers, because in most cases, the PEO
provides access to health insurance, retirement savings plans, and other critical employee benefits for their
worksite employees. If a PEO relationship is terminated, the co-employees will cease to work for the PEO but
will continue as employees of the client.
By comparison, a leasing or staffing service supplies new workers 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. Some would define employee leasing as a supplemental, temporary employment arrangement where one
or more workers are assigned to a customer for a fixed period of time, often for a specific project. This concept
creates little long-term equity or investment between the worker and customer.
Corporate What is the difference between temporary staffing services and a PEO?
Like a leasing situation, a temporary staffing service recruits employees and assigns them to
clients to support or supplement the client's workforce in special work situations, such as
employee absences, temporary skill shortages or seasonal workloads. These workers are traditionally
only a small portion of the client's workforce. A PEO contractually assumes and manages employer
responsibilities for all or a majority of a client's workforce. Industry ratios identify the PEO arrangement
as a long-term relationship with nearly 86 percent of the clients and worksite employees remaining with the
PEO for a year or longer. Worksite employees participate in the PEO's full range of employee benefits including,
health, dental, and life insurance, vision care, and retirement savings plans.
How many Americans are employed in a co-employment PEO arrangement?
It is estimated that 2-3 million Americans are currently co-employed in a PEO arrangement. The average
PEO has grown more than 20 percent per year for each of the last six years, according to a survey conducted
by the National Association of Professional Employer Organization (NAPEO). About 700 PEOs that offer a wide
array of employment services and benefits are operating today in 50 states. C2 is one of the leading PEOs in
Northern Virginia. The PEO industry generates approximately $51 billion in gross revenues annually. PEOs have
an average 88 percent client retention rate due to strong client satisfaction. C2 ‘s retention is above average
at XX%. NAPEO member companies, of which C2 is one, are estimated to account for more than 70 percent of the
industry's gross revenues.
How does C2 help its clients control costs and grow their bottom line?
C2's economy of scale enables each of its client companies to lower employment costs and increase
the business's bottom line. Some of C2's clients maintain a simple in-house HR infrastructure; others,
none at all. C2's clients can also reduce their hiring overhead. The professionals at C2 provide critical
assistance with employer compliance, which helps protect clients against liability. C2's also offers its clients,
for no additional cost a significant technology and service infrastructure, including a Shared Services HR Portal.
In addition, C2 provides timesavings by handling routine and redundant tasks for its clients. This enables
its clients – small and medium size business owners - to focus on their companies' core competencies and grow
their bottom line.
How do employees benefit from a PEO arrangement with C2?
Employees seek financial security, quality health insurance, a safe working environment and
opportunities for retirement savings. When a company works with C2 job security is improved as
C2 implements efficiencies to lower employment costs. 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, to include a 401(k), life insurance,
disability insurance, discount plans, a flexible spending plan and more.
Will my employees receive comprehensive benefits?
Frequently, partnering with a PEO like C2 is the only opportunity for a worker of many small
businesses to receive Fortune 500 quality employee benefits like health insurance, dental and
vision care, life insurance, retirement saving plans, job counseling, adoption assistance, and educational
benefits. Absent the PEO, a small business can neither afford nor manage these benefits.
Who is responsible for my employees' wages and employment taxes?
C2 assumes responsibility and liability for payment of wages and compliance with the rules and regulations
governing the reporting and payment of federal and state taxes on wages paid to its employees. PEOs like
C2 have long established their role as reporting income and handling withholding, FICA and FUTA. The
IRS has also issued guidance confirming the ability of PEOs to offer qualified retirement benefits.
Who is responsible for state unemployment taxes?
As the employer for employment tax and employee benefits, C2 assumes responsibility and liability
for payment of state unemployment taxes. In those states that require a PEO to report unemployment
tax liability under its clients' account numbers, C2 can still manage this responsibility.
Who is responsible for employment laws and regulations?
As employers, both the client and C2 have compliance obligations. However, P2E provides worksite employees
with coverage under many employment laws and regulations, including federal, state, and local discrimination
laws, Title VII of the 1964 Civil Rights Act, Age Discrimination in Employment Act, ADA, FMLA, HIPAA,
Equal Pay Act, and COBRA. In many cases, these laws would not apply to workers at small businesses without
the PEO relationship, since many statutes have exemptions based upon the number of workers in a work force.
Once included in the PEO's workforce, these laws protect the workers.
Who is responsible for workers' compensation?
Many states recognize the PEO as the employer of worksite employees for purposes of providing workers' compensation coverage.
Does a PEO arrangement with C2 impact a collective bargaining agreement?
No. PEOs like C2 work equally well in union and non-union worksites. The National Labor Relations Board (NLRB)
recognizes that in co-employment relationships, worksite employees are appropriately included in the
client employer's collective bargaining unit. Where a collective bargaining agreement exists,
C2 fully abides by the agreement's terms. C2 endorses the rights of employees to organize, or not
organize, under state and federal laws.
How do I select a PEO?
Begin by looking at your company's specific needs. Do you just need someone to handle your payroll?
What about benefits? Do you need Workers' Compensation insurance or someone to manage it? Do you have a
labor attorney on staff; do you have access to one? Talk to a few PEOs in your area to determine if they
can meet your needs. Check out their references - they may have other clients in the same industry with
similar experience. Interview the PEOs to determine what's best for you.
I am a small business. Isn't this going to cost me a lot of money?
No. Most businesses find that having a PEO like C2 actually saves them money. Because of the large number of
people a C2 co-employs, we should be able to offer you benefits that only large companies can generally afford.
C2 will also assume time-consuming tasks that have been your responsibility in the past, freeing you up to
focus on other things, such as growing your business.
Can I choose to keep some HR functions in-house if I prefer?
Absolutely-hence the names “C2 Portfolio”-you choose from our Portfolio to design your own.
My payment and bonus schedules differ from most companies I know. Can C2 tailor a specific system for my business?
Every client has specific needs and processes. Our flexibility allows us to conform to your
current practices-we run payrolls weekly, bi-weekly, semi-monthly, monthly, etc. You provide us with
minimal data, and we do the rest!!
Does C2 need to be licensed to provide insurance benefits to their workers?
Like other employers, C2 sponsors employee benefit plans for its worksite employees. Such benefits may be
mandated by law, such as workers' compensation and unemployment benefits. Or they may be voluntary benefits
that will help C2's clients attract and retain quality employees, such as health, life, dental and disability
insurance. C2 as an employer sponsor/acquire programs for its employees. As such, C2 is a consumer of insurance
and procures these benefits from licensed insurance agents and authorized insurers.
How does C2 Portfolio fit into my organization?
C2 Portfolio acts as your HR department, reporting directly to you. We assemble a team of experts skilled
in human resources administration, benefits, payroll issues, risk management and safety. Your company
has a designated C2 Portfolio HR Team leaded by a Professional HR Manager. This team is supported by corporate
managers and HR Specialists working behind the scenes to deliver the best practice HR services, answer
questions and help solve problems.
Attracting and keeping the employees my business needs to grow is more of a challenge than ever. How can C2 Portfolio help?
There is no question that attracting and retaining quality talent is a critical success factor for any business,
and the competition is fierce even as the economy softens. The catch for many employers is that it takes time and
money to negotiate, assemble, provide and administer the kind of feature-rich benefit plans that attract the best
job candidates - time and money that often cannot be spared. The result is that these employers are not as competitive
as they could be.
As part of our suite of solutions, C2 Portfolio delivers a comprehensive, attractive and affordable package of employee
health, welfare and retirement benefits, including major medical plans, 401(k), life and disability insurance,
professional development seminars, EAP and much more. Our benefits plans are comparable to those offered by Fortune
500® companies - and can be just the tool you need to sharpen your edge in the battle for top talent.
How can C2 Portfolio help me with my labor costs?
Labor cost volatility can be a business owner's biggest challenge. With a few exceptions (such as FICA and FUTA),
most of the elements of a company's labor costs - benefits, workers' compensation, compliance costs, liability
exposure and the rest - are highly volatile and can adversely affect a company's margins and its ability to conduct
accurate financial forecasting.
A co-employment relationship with C2 Portfolio can help you stabilize your labor costs, which in turn tames
downstream volatility and leads to enhanced margin protection and more accurate financial forecasting. The keys
are shared liability, proactive risk management, expert compliance assistance, and big-company purchasing power
for employee benefits, workers' compensation insurance, employment practices liability insurance and related benefits.
All these are core elements of the C2 Portfolio Solution.
I spend far too much time every week pushing paper and dealing with HR-related issues. How can C2 Portfolio help?
At the core of the C2 Portfolio Solution, an assigned human resources professional (one of several dozen on our staff),
who is ready to support and guide you through the myriad of employee relations issues. These field professionals are
supported by payroll and benefits specialists, 401(k) specialists, on-staff legal experts and a responsive and fully
staffed Employee Service Center to handle employee questions. By taking on the lion's share of human resources-related
administrative tasks, we give you back a significant portion of your day - every day.