What is a PEO?
Professional employer organizations (PEOs) enable clients to cost-effectively outsource the management of human resources, employee benefits, payroll and workers' compensation. PEO clients focus on their core competencies to maintain and grow their bottom line.
Businesses today need help managing increasingly complex employee related matters such as health benefits, workers' compensation claims, payroll, payroll tax compliance, and unemployment insurance claims.
Businesses across America have discovered the incredible value of PEOs because they provide:
- Relief from the burden of employment administration.
- A wide range of personnel management solutions through a team of professionals.
- Improved employment practices, compliance and risk management to reduce liabilities.
- Access to a comprehensive employee benefits package, allowing clients to be competitive in the labor market.
- Assistance to improve productivity and profitability.
- from NAPEO, What is a PEO?
Your company ("client") enters into an agreement with the PEO to establish a three-way relationship between you, your employees and the PEO. You and the PEO become co-employers, instead of the traditional employer company/ employee relationship.
This allows the PEO to provide you with employment administration relief and to transfer or share many employer liabilities via our employer services including:
- Payroll (including tax filings)
- Workers Compensation
- HR Back Office Help
- Employee Benefits
- Government Compliance assistance
- Safety and Risk Management
The PEO takes responsibility for HR administration and compliance, for which it charges a service fee. Your employees continue to work at your company location, and you continue to exercise control over your business.