PEO vs Payroll Company vs Me & Telecommuting in NH


We have an employee moving to NH from Florida. She will be working from home in her home office doing clerical work, following up on orders, status, ect. Only a computer and phone are needed. No travel. I understand that I need to get workers comp - which is being shopped for us, but what do I need to do as an employer to get her set up? Setting up a new employee in a different state?

 Also, does anyone use a PEO or a Payroll Company for compliance, payroll, ect? What are your thoughts? Would that be an easier route to go? Is this something I should take on myself?

Thank you!


  • 3 Comments sorted by Votes Date Added
  • I'm a cheerleader for outsourced payroll.

    PEOs have mixed reputations.  Do you need a PEO for a single employee in a different state?  What problems do you think you might encounter?  I imagine that occasionaly compliance issues could be brought up with a local employment law attorney when they arise for less than the one year's cost of a PEO.  If the employee has a difficult personality and a hostile attitude, that would change my answer.

  • Well I will preface by saying I work for a payroll outsourcing company that also has a PEO product. I'm not going to sell you on it, though, but I think I can give you the pros/cons

    PEO is professional employer organization, a form of "employee leasing" as it relates to a coemployment relationship between the PEO provider and the company. The level of involvement from the provider depends on the company - some PEOs take a much more hands-on approach and will do some hiring/firing, while others (mine for instance) will not get involved with "day-to-day" responsibilities.

    Whether PEO is a good idea or not depends on why you want PEO. Do you offer your employees health insurance? How is your SUI (State Unemployment Insurance) rate? What about your workers compensation rate? Do you have a dedicated HR person? What is your current payroll process?

    A PEO is generally able to combine employees from many client companies to negotiate more favorable group rates for benefits and insurance. A PEO processes payroll, administers employee benefits, provides basic risk management for insurance, and often assists clients in maintaining human resource systems in compliance with labor and employment laws. Depending on the PEO, you can also gain benefit from 401k & section125 plan administration, safety services, handbook services, HR consultation, unemployment insurance services, and other bundled HR products/services.

    Note that PEOs are EXTREMELY 'picky' when it comes to the business they pick up. There are certain factors that many PEOs follow and will influence whether or not they choose to go ahead with the coemployment relationship... some being a low health insurance participation rate, offshoring/expatriates, financial risk, prior & excessive WC claims, etc.


    There are many options for what to outsource. You can choose to outsource strictly payroll or bundles like payroll & tax pay services, payroll and benefits administration, or even payroll and HR services. Payroll can be a huge burden, and outsourcing this function may be all that you need. The level of outsourcing primarily boils down to what you do and do not want to be bothered with in-house.

  • NH has no state income tax, no state disbaility withholding, and setting up an employer account for unemployment insurance is quite easy.  Reporting one employee to the state for these purposes literally takes 5 minutes, plus writing the check.  Workers compensation insurance for a clerical employee is reasonable and if you have a national carrier, they can add the NH exposure on an "if any" basis for the first year, after that they will use your prior year actual to calculate premiums.  Before you go to an employee leasing company, try it in-house.  Leasing companies are expensive, and often your work comp rate and unemployment rate are based on the class code as a whole for all employees leased (not only to you, but to other companies as well).  If you have a great workers comp mod and a premium UI rate, why chance it with a leasing company that has employer contracts with higher mods and experience ratings?
Sign In or Register to comment.