STPS

Do we Recommend PEO Services for Trucking Companies?

Many trucking companies consider using Professional Employer Organizations (PEOs) to manage HR tasks. But are PEOs the right fit for the unique needs of the trucking industry? Trucking businesses have complex pay structures, strict regulations, and industry-specific challenges that PEOs may not handle effectively. This can lead to issues like payroll errors, compliance problems, and a loss of control over managing drivers.

At Superior Trucking Payroll Service, we have helped hundreds of trucking companies manage complex pay structures. Our deep understanding of trucking-specific needs ensures that you get accurate, efficient payroll services designed just for your business.

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In this article, we’ll explore whether we recommend PEO services for trucking companies and why specialized payroll services might be a better option for your business.

What is a PEO for Trucking Companies?

A Professional Employer Organization (PEO) is a company that helps businesses handle their HR tasks. These tasks include processing payroll, managing employee benefits, and ensuring the business follows employment laws. A PEO will also help with competitive prices on worker’s comp insurance and health insurance benefits.

PEOs work by becoming a co-employer with the company, which means they share the responsibility of employees. By working with a PEO, businesses can focus on their main goals while the PEO handles some HR duties. This can save time and money, and it helps companies to avoid costly mistakes related to payroll and legal issues.

Do We Offer PEO Services for Trucking Companies?

At Superior Trucking Payroll Service, we focus exclusively on payroll services for the trucking industry. While we don’t offer PEO services, we also don’t typically recommend them for trucking companies.

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Why We Don’t recommend PEO Services for Trucking Companies

We don’t recommend PEO services for trucking companies because they often don’t address the specific needs and complexities of the trucking industry. Trucking companies need solutions tailored to the trucking industry.

  • Complicated pay structures:

    Truck drivers may get paid based on miles driven, delivered loads, or detention time. This can make payroll tricky, and mistakes can lead to upset drivers.

  • Compliance with regulations:

    Trucking companies must follow strict rules about hours of service, overtime, and taxes. Getting these wrong can result in hefty fines.

  • Tax expertise:

    We help trucking companies with tax filings and deductions and keep up with changing laws. A general PEO might not have the deep knowledge needed to handle these details correctly.

  • Per Diem Programs:

    Trucking companies often use per diem programs to reduce drivers' taxable income and save on payroll taxes. PEOs may not fully understand or implement per diem programs correctly, leading to tax complications and missed savings opportunities.

By sticking to what we do best—payroll and tax services for the trucking industry—we can provide higher-quality service than a general PEO.

5 Reasons to Think Twice About PEOs for Your Trucking Business

While PEOs offer broad HR services, they may not be the right fit for trucking companies. Here are some downsides to consider:

  • Loss of Control Over Drivers:

    When you work with a PEO, your employees—especially your drivers—become co-employed by the PEO. This means you could lose some control over important decisions like hiring, firing, and day-to-day management. Trucking companies often need flexibility to handle these tasks quickly and efficiently, and a PEO’s structured processes might slow you down.

  • Slow Hiring Process:

    In the trucking industry, fast and efficient hiring is critical to keeping your trucks on the road. PEOs often have lengthy hiring procedures, including background checks, drug testing, and employment verification. While these steps are important, delays in the hiring process could leave your trucks idle, costing you time and money. Slow hiring can be a significant disadvantage in an industry where missing deadlines can impact contracts.

  • Impact on Company Culture:

    Your company’s culture is built on how drivers and staff interact daily, follow safety rules, and perform their jobs. A PEO might impose policies that don’t align with the culture you've worked hard to create. For instance, a PEO could implement strict policies on time off or disciplinary actions, which might not match the more flexible environment your drivers are used to. This can lead to driver dissatisfaction and higher turnover rates.

  • Lack of Trucking-Specific Support:

    While PEOs handle many general HR tasks, they often don’t address the specific needs of trucking companies. Tasks like driver recruitment, retention strategies, and maintaining compliance with Department of Transportation (DOT) regulations are crucial to your business. Still, they may fall outside of a PEO’s expertise. You would still be responsible for managing critical records, such as driver qualification files and Hours of Service (HOS) logs.

  • Hidden Costs:

    Another factor to consider is the potential for hidden fees. While PEOs may advertise savings on workers’ compensation or benefits, you might encounter unexpected charges for additional services, like compliance checks or specialized reports. Exiting a PEO agreement can be difficult, with some companies locking you into long-term contracts that are hard to break without penalties. This can cause payroll disruptions and gaps in benefits when transitioning back to your own system.

Before deciding whether to use a PEO, it’s important to consider whether it aligns with your trucking company’s needs. In many cases, we don’t recommend PEOs because they can create more challenges than they solve. A PEO can help with general HR tasks, but it can also remove some control over your drivers, make hiring slower, change your company culture, and come with hidden costs—especially in the trucking industry.

Every trucking company is different, so consider whether a PEO meets your specific needs. The trucking industry has unique demands, and not every solution fits. Before signing up, take the time to consider if a PEO is right for your business.

Your next step is to explore how our specialized payroll management can save you time and money, without the downsides of PEOs. Read ‘Payroll Management: What We Do for Our Clients‘ to see how we handle your specific trucking needs.

Article: Payroll Management: What We Do for Our Clients
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Written by Mike Ritzema

Before founding Superior Trucking Payroll Service, Mike was the CFO of a trucking company with 80 trucks and a thriving brokerage. This experience gave him the perspective that a payroll solution has to make the lives of the office people better.  All the solutions he has designed are to benefit everyone.  Our company mission is to help trucking families and that includes the company owners, the drivers, and the office.