Zenefits vs Justworks, which one should I pick and why?
Platforms like Justworks bring payroll, compliance and benefits into a single platform. Specifically, you can
- choose medical, dental, and vision insurance
- onboard new employees and contractors quickly and easily
- set up recurring and one-off payments, including salary, hourly, contractor payments and expense reimbursements
- automatically secure worker's comp and disability insurance, which is mandatory in most states and is charged on a pay-as-you-go basis
- be included on Justworks' unemployment insurance in most states, so you don't have to deal with your state's unemployment agency
If you haven't started to worry about all this yet, you will as soon as you start paying taxable wages.
(Justworks does all this by acting as a co-employer or PEO, which means that we do most of this on your company's behalf with our EIN. You've probably heard of TriNet, which is also a PEO.)
The traditional setup involves setting up a payroll processor, working with an insurance broker (such as Zenefits) and doing all the government setup stuff yourself. It's totally doable, but ultimately it's time-consuming and a headache. It's also easy to get fines or penalties from your state if you don't do everything correctly and on time. If you have employees who live or work in other states, this can get overwhelming fast.
Note that both Justworks and brokers are getting insurance from the same carriers and can get you the same coverage at the same price point.
Ultimately it comes down to how you want to spend your time as an entrepreneur. What I can tell you with certainty is that companies that use Justworks don't spend much time worrying about this stuff, and when they do have a question they just give Justworks a call.
Full disclosure: I'm a founder of Justworks.
- It's a great system that is easy to use/ clean and thorough UI
- Has a great database of information and template documents like an employee handbook, offer letter, others
- It's fairly inexpensive compared to other systems.
- The customer service is pretty exceptional (prompt, courteous, and helpful)
- The benefits they've negotiated are very good, as are the perks they offer
- It's a compliant payroll system, so you don't have to be worried about making mistakes
I recommend the system to everyone. We've saved so much time by using them, and the team likes the clarity of it from the employee aspect as well.
As of 2016, go with Justworks.
Zenefits is a great system but it's a framework, not a ready-to-go solution. What Zenefits provides is free software that can integrate with various HR service providers and manage everything in a single console - but you still have to select all those providers yourself, including payroll, benefits, compliance, taxes, etc.
If you want the control of managing exactly which company does each service then Zenefits can work to tie everything together into one system but it's still a lot of setup and various subscriptions to handle.
Justworks is a different model where they act as a PEO (professional employer organization) and HR agency all in one so everything from onboarding to taxes to benefits is handled by them as a single entity. You only have to deal with a single vendor for everything and you'll know the same team is handling all of the separate but important details. It's completely seamless, their online UI is fast and works great, and most importantly, they save a lot of time and effort.
As of Feb 2016 - Zenefits has also been in the news for issues of selling health insurance without proper licensing in California and Washington. This might or might not matter but isn't a great sign for an HR company.