PEO Solutions for Businesses in California

California has about 40 million residents, making it the most-populated state in the nation and providing a sizable number of eligible workers for U.S. businesses to employ. Recent data shows Golden State businesses doing just that; a recent one-month gain of 43,700 jobs accounts for more than 16% of the nation’s overall jobs gain.¹ There are 4.1 million small businesses in the state, according to the Small Business Administration, and they employ almost 7.5 million people.²

California employers also must navigate an active legislative and regulatory environment that creates numerous mandates and employment law requirements. Keeping ahead of the curve on this ever-changing HR landscape can prove daunting. In fact, 64% of companies say they spend more than 570 hours annually on HR administration, and annual spending for business can be as high as $350,000.³

If you’re looking to put more focus on growing your business instead of handling the administrative tasks of running it – and in a more cost-effective way – you might want to learn more about a Professional Employer Organization (PEO).

Why Work With a PEO in California?

When a PEO is used by a business, the PEO supports HR, payroll, benefits, risk management, and compliance. You may also hear this referred to as co-employment. In a co-employment relationship, a PEO and a business establish responsibilities. Employers still maintain management responsibilities over the business and their employees. Whether you need HR support because you don’t have a team or if your team needs additional support, a PEO can help.

Did you know that there are nearly 20 state leave laws in California? Did you know that Cal/OSHA increased its inspections by 5% in the 2023 federal fiscal year and identified hazards that potentially impacted an estimated 1.4 million workers? These are just two of the areas where a PEO could help your business. A PEO can also help with the time-consuming and costly tasks of recruiting, hiring, and retaining talent. Businesses working with a PEO experience 20% less turnover and save, on average, $1,775 per employee per year, according to a NAPEO study.⁴

How Can Paychex Help Your Business Gain Efficiencies and Insights?

Combining human input with the analytics available from an all-in-one HR technology platform, Paychex HR PEO* can help you improve productivity and streamline HR administrative tasks. For example, with automated payroll processing, payroll tax remittance, and the reduction of hassles associated with the administration of state unemployment insurance are key gains. Additionally, our PEO facilitates:

• HR administration: From recruitment and retention to training and development, and handbook development with company policies.
• Employee benefits: Keep your business competitive with access to retirement plans and health insurance offerings similar to those at Fortune 500 companies. You also can save time as our PEO vets benefit packages and handles the time-consuming administrative tasks, which can come in handy because almost all California businesses are mandated to offer a workplace retirement program such as CalSavers.
• Risk management: Purchasing workers’ compensation insurance, which is mandatory for businesses in California, can be more affordable with Paychex HR PEO’s collective buying power. Your business will also have a safety specialist to provide training that can help reduce risk for your employees and keep you updated on requirements from Cal/OSHA such as the Indoor Heat Illness Prevention regulation.
• Compliance: Your dedicated HR Professional can proactively identify risk and offer actionable HR advice on changes involving local, state, and federal regulations; COBRA; and minimum wage requirements, of which California has seen significant changes in recent years.
• HR technology: Get help simplifying tasks, improving communication while allowing employees easy access to update information in areas such as payroll, benefits, and personal data.

Working with a PEO has its advantages for California businesses and their employees, including streamlining your HR administration and providing peace of mind about your compliance obligations.