Professional Employment Organizations (PEO)

Professional Employment Organization (PEO)

A Professional Employment Organization (PEO) manages the paperwork responsibilities associated with having employees for its client companies and becomes the employer of record. The PEO and the client company have a co-employer relationship that allows them to share and manage many employer-related liabilities and responsibilities. The client company typically pays the PEO for the employee costs plus an administrative fee, which is also known as employee leasing.

Responsibilities Assumed by the PEO

•	Paying employee wages, workers’ compensation premiums, payroll-related taxes, and employee benefits
•	Maintaining compliance with all Federal, State, and local regulations, including taxes and employment
•	Recognized by the Internal Revenue Service as the "employer of record" for liability for federal income and unemployment taxes and is responsible for these payments
•	Providing workers' compensation coverage, filing and managing claims, and maintaining OSHA logs
•	Complying with the broad range of employment laws and regulations including: COBRA, Title VII, ADA, FMLA, HIPPA, Equal Pay Act, and Age Discrimination in Employment Act

Difference between Employee Leasing and Temporary Services

PEO’s normally do not recruit, train, or provide staff to their client companies as temporary staffing firms do. A PEO arrangement usually involves all or most of the employees of the client company in a long-term employment relationship.