What is a Professional Employment Organization and how can it help a business?

PEO stands for professional employment organization.
When working with a PEO you are entering into a Co-Employment relationship.
This means that the PEO will be sharing certain employer responsibilities with the client.
These will be outlined in the Client Services Agreement, also known as the CSA.
PEOs provide payroll processing, comprehensive human resource solutions, risk management, claims management and last but not least workers compensation coverage.
There are over 900 PEOs in the United States and the industry is not a new or fly-by-night operation by any means.
If you were to combine the total number of employees at Amazon, Starbucks, AT&T, Apple, Wells Fargo and Google, that figure would still be less than the number of employees and W2s represented by PEOs.
Business owners looking at a PEO solution need to take a close look at how the payroll taxes are remitted, because this operation is handled by the PEO because of the co-employment relationship.
For more information on this topic, check out our video on PEO Employer Payroll Taxes.
PEOs are a great solution for businesses of many sizes that would like a specialized HR and Risk Management back office to help guide them through the ever changing employer obligations.
In the majority of cases they will do it for a fraction of the standard market cost.
PEOs can be tricky to understand so be sure to work with an expert each and every time you are thinking about signing a CSA.
Please contact us with further questions on this or any other risk management topic. We will see you again soon!