by Flex HR

How To Leave A PEO – Whats the difference between a PEO vs ASO?

How To Leave a PEO Business

Ever think about getting out of your Professional Employment Organization (PEO)? Managing your daily business operations and processes are a very complex undertaking. The PEO becomes the employer. Human Resources is the most vital component that holds these tasks together, so it’s imperative you have the proper HR expertise on hand. Many companies do not, and so they outsource their HR to a PEO service or an Administrative Services Organization (ASO). An ASO model brings you the next level of HR support, providing strategic HR, an HRIS system to take you into your growth strategy and the flexibility to you to have your own policies and best practices. Continue reading to learn the difference between a PEO vs ASO.

The number one reason employers leave a PEO is the day to day high cost with little to no HR Support. The number 2 reason is to gain control over their staff and make them actual employees of their company.



What is the Difference Between PEO vs ASO? 

How to leave a PEO vs ASO Graphic

Leaving Your PEO

Leaving a PEO may seem overwhelming, but Flex HR will help you every step of the way, so that the transition can go as smoothly as possible for all size businesses.

  1. Understand Your PEO HR Contract

    Re-read the contract to comprehend the termination requirements, timeline, and any penalties.

  2. Select An HR Expert For Support

    When leaving and working with a PEO, the HR administration and HR tasks fall back on the employer. Most organizations choose an ASO firm like Flex HR to take over their HR functions such as payroll, benefits enrollment, onboarding, etc. Basically, supporting you with customized solutions and not a part of the box approach. A true HR outsourced firm is built with HR expertise and not bundled with must use benefits and must be employees of the PEO.

  3. Data Collection

    It’s vital for employers to gather information prior to telling their PEO they want to leave. Flex HR takes care of this for you. We pull your employees’ information and start up a new payroll, so you don’t have to worry about this task. Important documents include:

    • Company & employee (active and terminated) gross net for taxes, deductions and earnings
    • Census
    • Compensation information
    • Employee time off/accruals
    • COBRA participants
    • FSA participants and balance
    • HRA participants and balance
    • Performance evaluations
    • Termination records
    • Workers Compensation

  4. Employee Paperwork Completion

    Leave it to us to help gather all missing paperwork and ensure all the proper forms are organized and accounted for. The company’s workforce will go from being paid under their PEO’s FEIN back to their employer’s FEIN and will need to complete typical onboarding forms again such as:
    • Direct Deposit
    • Federal and tax withholdings
    • I-9
    • Employee Handbook
    • Benefit Plans
    • Tax Filings
    • Employer of Record
    • State Unemployment Tax

  5. Payroll Process Set-Up

    There are many aspects to transferring payroll, but you are in good hands because Flex HR will prepare everything for you. We ensure all tax accounts and pay policies are in order to ensure a smooth payroll changeover.

  6. Benefits & Insurance

    Employee benefits are such an integral part of keeping your employees happy. Flex HR collects all the information to quote benefit options and select plans that fit the employment relationship culture of the company, and of course we then get it all implemented for you. We also make sure all FSA, HRA, 401(k) and other insurance plans and policies transfer effortlessly; however, you will get to design a benefits package that meets your culture and employee needs.

  7. Ensure Compliance

    Flex HR guarantees you will be in compliance every step of leaving the PEO. Important compliance safeguarding is meeting the Fair Labor Standards Act, wage and hour, and COBRA notices that need to be sent out. We will keep you compliant.

  8. HR Policy & Administration Implementation

    HR functions are the glue that shape and keep a business composed. Flex HR allows you the employer to implement best practices; not like practices the PEO can offer and how it wants to operate under. It’s important to define roles and responsibilities of the entire workforce and outline all process and policies in an employee handbook.

Our Flex HR professionals will transition business owner and client company out of your PEO as smoothly as possible. Flex HR is a Human Resources Administrative Organization (HRAO) and also an Administrative Services Organization (ASO Model) which will protect your most valuable assets of your company: your people. Leaving a PEO essentially gives you, the employer, your employees back. This means you get to focus on your core business responsibilities, company culture, employee retention and productivity, while we handle all the HR functions for you. Because we are a Human Resources Outsourcing (HRO) firm, Flex HR can support any and all your HR requests, simply acting as your backroom support, as well as strategic support, to meet your growth needs.

Our Flex HR specialists serve thousands of different organizations, in countless industries, varying from a few to over 75,000 employees. We are a national association of professional HR outsourcing.

To Learn More about Flex HR Contact Us.