What Is a Professional Employer Organization?


No matter what size a company is, it can be challenging for managers and human resources professionals to handle all the administrative details. Some companies choose to adopt a legal arrangement called co-employment. In this situation, the company outsources certain tasks to a Professional Employer Organization.

How a PEO Works

What is PEO? When a company decides to contract with a Professional Employer Organization, it usually involves more than just turning over tasks such as payroll and tax withholding to an external provider. In many cases, the PEO actually serves as the employer to a company’s workers within certain guidelines. This means the PEO can legally handle workers’ compensation solutions, unemployment claims, payroll, health care benefits, and other human resources tasks, freeing up the company’s in-house managers to provide project management and guidance to their team members.

Benefits of a PEO

Working with a PEO can provide many benefits, especially for small businesses. Allowing the PEO to take care of issues such as workers’ compensation, unemployment claims, and taxes can save a company time and ensure it is in compliance with all essential regulations. Source: insuremyworkcomp.com/. The reduction in a company’s liability and in-house workload may help improve morale and increase productivity.
Many PEOs can provide customized partnerships designed to maximize the efficiency of the co-employment agreement. This solution may help many business owners reduce administrative work and ensure their employees receive comprehensive human resources support from dedicated experts.