Professional Employer Organization (PEO) in the Philippines - FAQs

Professional Employer Organization
(PEO) in the Philippines - FAQs
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American companies can typical lease 2-3 Filipino employees for the same price of
one American employee. The cost savings are enormous and the ROI on your payroll
dollar is incredible, making outsourcing a temping option for CEOs who want to cut
costs while gaining eﬃciencies.
Why Find a PEO in the Philippines?
PROFESSIONAL EMPLOYER ORGANIZATION (PEO) IN THE PHILIPPINES - FAQS STAFFVIRTUALSV

A Professional Employer Organizations (PEOs) takes on the HR hassles involved with
hiring, ﬁring, beneﬁts and payroll. Its simple to hire a PEO in the Philippines.
What is a Professional Employer Organizations
(PEO)?

All types of businesses lease staﬀ from a PEO, from high-tech companies to small
manufacturers to serviced oriented business. In addition many sole practitioners and
professionals lease staﬀ, such as lawyers, doctors, real estate professionals and
engineers.
Who uses a Professional Employer Organizations
(PEO)?
Get a Quote for PEO in the Philippines

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.
Employee Leasing Companies in the Philippines are also more affordable than in the
United States. Leasing staff from a PEO also provides a company with a larger talent
pool, and talent is the life blood of any organization.
Why would a business use Lease staff from a
Professional Employer Organization(PEO) Company
in the Philippines?

Are PEO Companies in California leasing staff from
PEO companies in the Philippines?
Yes. In many cases PEO companies in California, as well as PEO companies in Florida,
have been reported to lease staff from PEO companies in the Philippines. In effect,
they are leasing staff, and then re-leasing them to someone else. Even they prefer to
hire a PEO in the Philippines.

How does a PEO Work?
A client contracts with the PEO to employ staff to work on their projects. The PEO
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. The PEO will go find and recruit staff and then lease them back to
the client at a fixed hourly, or monthly rate.
The client company retains responsibility for and manages day to day activities of the
leased staff. The staff is essentially the employee of the client, but on the payroll of
the PEO. The client gets all the benefits of a new staff, with none of the HR headaches
associated with hiring and firing.

Is it difficult to find a PEO in the Philippines?
Get a Quote for PEO in the Philippines
No, simply search online and you will find an employment agency in the Philippines
or PEO.

Are PEOs recognized as employers at the state and
federal levels?
Yes. Employee Leasing Companies operate in all 50 states and in foreign countries,
like the Philippines. States statutorily recognize Employee Leasing Companies and the
IRS has accepted the right of an Employee Leasing Company to withhold and remit
federal income and unemployment taxes for work site employees.

Can a business owner who leasing staff from a PEO
add or remove staff easily?
No. The business owner controls everything and can usually add or remove staff
quickly and easily.

Employee Leasing Companies assume 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.
Employee Leasing Companies have long established their role as reporting income
and handling withholding, FICA and FUTA. In 2002, the IRS issued guidance
confirming the ability of Employee Leasing Companies to offer qualified retirement
benefits.
Who is responsible for the employees' wages and
employment taxes?

As the employer for employment tax and employee beneﬁts, the Employee Leasing
Company assumes responsibility and liability for payment of state unemployment
taxes, and most states recognize the Employee Leasing Company as the responsible
entity.
In those states that require the Employee Leasing Company to report unemployment
tax liability under its clients' account numbers, the Employee Leasing Company can
still manage that responsibility.
Who is responsible for state unemployment taxes?

Many states recognize the Employee Leasing Company as the employer of work site
employees for purposes of providing workers' compensation coverage.
Who is responsible for workers' compensation?

How much do your employees really cost?
As an employer, administering employee, workers' compensation, and beneﬁt
programs is costly. It is diﬃcult to precisely calculate administrative costs. However, a
$10/hour employee in California is closer to $15/hour when all overhead admin costs
are added to the hourly rate - not to mention the additional risk of employee related
lawsuits - which are exploding in frequency across the nation. Many companies lease
employees simply to mitigate the risk of frivolous lawsuit.

Who needs Work Comp?
Within the USA,workers’ compensation insurance is mandatory (except in Texas).
Employers are required to carry work comp insurance on their employees. Small
employers who do not carry work comp on their employees (and may be paying small
claims “out of pocket”) risk being personally liable for all medical bills from the
accident in addition to significant governmental fines.
For contractors, having proof of work comp insurance in place is usually required to
be a subcontractor for a larger general contractor. Proof of work comp coverage is
provided by a work comp certification that proves coverage is in place.

Why are more and more companies leasing staff in
the Philippines?
Money is the big reason, leasing staff from the Philippines is cheaper than leasing
them in the United States. Many times, companies can lease 2-3 staff in the
Philippines for the price of 1 back home. In short, CEOs get a tremendous ROI on
their payroll dollar by going to the Philippines, which is an English speaking nation
and “the call center capital of the world”.

Why are more and more companies leasing staff in
the Philippines?
Get a Quote
Over 600,000 Filipinos work for American companies doing all sorts of back office,
administrative and technical tasks. This number is projected to grow to over a million
in the coming years, making the business process outsourcing (BPO) and staff leasing
industry the fastest growing industry in the Philippines.

Professional Employer Organization (PEO) in the Philippines - FAQs

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