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A Guide For The Transportation Industry: Outsourcing HR Functions To A CPEO

The freight and transportation industry has undergone significant changes over the past years. Managing freight audit and payments (FAP) needs to be rethought in light of the rapid globalization of the world, which means being more efficient and data-driven than ever before. In spite of this, small business owners who manage fleets are provided with many resources that ultimately assist them in focusing on more important aspects of their business.

Requirements Set By FedEx

Should you choose to make your life easier and partner with a professional employer organization (PEO), you must partner with a certified professional employer organization (CPEO). A CPEO is a PEO that has met the requirements set by the IRS. Being certified as a CPEO means that we can offer our clients specific financial protections and tax benefits.

A CPEO is solely liable for federal employment tax payments on wages that are paid to its worksite employees. Therefore, if the CPEO fails to pay payroll taxes, the IRS cannot go after the client to collect employment taxes. The liability falls entirely on the CPEO, not the client.

Contractors of FedEx must comply with the following requirements: 

  • Use only CPEOs certified by the IRS
  • Ensure that any CPEO used by the service provider is registered and in good standing with the state(s) in which it operates
  • Upon request of FedEx Ground, you must provide proof of CPEO registration with additional related information which includes:
    • Proof of workers’ compensation coverage
    • Unemployment insurance
    • All federal and state payroll taxes were withheld

As a contractor of FedEx, you take on all liability related to your business. However, FedEx wants to ensure its contractors are complying with all rules and regulations. That’s why when you choose to outsource your business functions including HR, benefits, payroll, and/or risk management, it must be with a CPEO.   

Get Started Today!

All small business owners in the transportation industry looking to partner with a CPEO to save them time and money have come to the right place. When you partner with GMS, you are guaranteed a partnership with a CPEO that will ensure you are compliant. Sales representative Danielle Kossman voiced, “Having partnered with many FedEx contractors, we’ve been able to provide a single-source solution for risk management, benefits administration, payroll, HR, and employment practices liability insurance (EPLI). You can rely on GMS to ensure you comply with the ever-changing rules and regulations.”

We understand that choosing to partner with a PEO is a huge decision. However, it ultimately benefits your business in the short and long term of the partnership. Contact us today to get started.