Frequently Asked Questions

What is a PEO?

A PEO is a Professional Employer Organization and is the employer of record for filing all employment documents under their federal identification number. PEO’s are typically utilized for a co-employment arrangement under contract with a company to outsource their entire payroll, worker’s compensation, human resource, employee benefits and employment administration functions.

How does a PEO limit a company’s liability?

The PEO becomes the employer of record for the workforce, thereby assuming the liability that is associated with the employee/employer relationship.

Is a PEO the same as an ASO (Administrative Outsourcing Organization)?

No. An ASO will handle all of the administrative needs of your company, such as processing payroll and processing benefits paperwork, but will do so without a co-employment arrangement. Your company will be the employer of record and will retain all liability associated with the employee/employer relationship.

Are PEO’s only for large companies?

Absolutely not. Many small to mid-size firms will benefit from using a PEO. Using a PEO will affect a savings in administration staff, as they provide all employee-related functions such as new hire processing and payroll, plus more. Because the PEO is the employer of record, providing benefits for all its employees, they are often able to secure better premium rates than a smaller employer. In addition, they assume the exposure of an employee/employer relationship, limiting your company’s liability.

Is my company responsible for worker’s compensation if I engage a PEO?

This is one of the biggest advantages of contacting a co-employment relationship with a PEO. The PEO, as employer of record will provide all workers’ compensation coverage and mitigate and manage all workers’ comp claims.

Who is responsible for payroll taxes?

Once an executed agreement with a PEO is in place, the PEO becomes the employer of record and responsible for payroll processing, payroll tax filing and payment of payroll taxes due.

What is HR outsourcing?

The field of Human Resources is unique and requires expertise in the entire employment and benefits law body of knowledge. Legal compliance when dealing with employee related matters that fall under federal and state regulations, such as FMLA (Family Medical Leave Act), COBRA (Consolidated Omnibus Budget and Reconciliation Act) and many, many more, can be a nightmare for those without specific HR expertise. Utilizing a PEO eliminates the need for a company to have in-house, qualified HR professionals. The PEO employs the experts that handle all of your Human Resource requirements. Because the cost burden of these professionals is spread over many companies, the cost savings is passed on to you.