Please upgrade to the latest version of Flash Player.

Click here if you already have Flash Player installed.

FAQ

What is a PEO?

A PEO is a company that contractually assumes critical human resource responsibilities and certain employer risks for its clients.

How does a PEO work?

When a company contracts with a PEO a "co-employment" relationship is created between the PEO and its client. The PEO assumes responsibilities for the "business of employment", including those related to workers compensation, human resources, labor law compliance, employee benefits, payroll, and employer taxes. The client maintains control and manages its employees, product development, marketing, sales and service.

Why use a PEO?

Contracting with a PEO allows a business organization to focus its time and energy on the "business of its business" and not on the "business of employment". A business will have ample time to conduct its daily operations by utilizing a PEO's expertise in payroll, accounting, human resource training, regulatory compliance, risk management, insurance and benefit programs. Essentially, a PEO offers a business a complete human resource package that will enable it to recruit and retain a higher-level caliber employee.

Who is responsible for the employee's wages?

A PEO assumes the responsibility for payment and reporting of all employee wages. As the "employer of record" the PEO shall pay all employer side tax contributions of OASDI and Medicare.

Who is responsible for workers compensation and unemployment taxes?

States recognize the PEO as the "employer of record" for the purposes of providing all workers' compensation coverage. A PEO also assumes the responsibility for payment of all state and federal unemployment taxes.

How should a business select a PEO?

A successful partnership begins when a business selects a PEO that will manage its human resource needs. When choosing a PEO a business should apply high standards. The following are necessary components of a PEO: