Frequently Asked PEO Services Questions

Find answers to your PEO services questions.

What Is A Professional Employer Organization (PEO)?

A PEO company, or Professional Employer Organization, is a business that provides human resources outsourcing to companies through the use of a co-employment relationship. The PEO relationship involves a contractual allocation and sharing of employer responsibilities between the PEO and the client company.

Can My Business Benefit From Partnering With A PEO Company?

When you partner with a PEO, your business can benefit in a number of ways:

  • Focus On Your Core Business: By removing non-revenue producing tasks, you can spend more of your time on what matters most, growing and maintaining your business.
  • Lower Expenses and Increase Profits: By outsourcing your human resources, benefits, and payroll administrative tasks, you can take advantage of our economies of scale and broad expertise. In turn, this will help lower your total overhead business cost and add revenue back into your company’s pocket.
  • Become an Employer of Choice: By providing better employee benefits programs for employees, you are better able to attract and retain great talent for your business.
  • Maintain Peace of Mind: Enjoy the guidance on legal compliance and improved risk management, safety support, training and claims processing services, our team of experts can provide and maintain peace of mind knowing your business is in good hands.

What Is Co-Employment?

Co-employment is a relationship where the PEO acts as the administrative employer of record for the client company and the client is the worksite employer. This relationship is based on a true partnership. The PEO helps small and medium-sized businesses achieve economies of scale not otherwise available on their own.

What Are The Roles of Each Employer In A Co-Employment Relationship?

The PEO:

  • Responsible for payment of wages, managing workers’ compensation claims, and other various administrative functions related to the assigned employees
  • Handles the regulatory paperwork and compliance issues
  • Gives managers advice on proper human resources procedures, including terminating and discipline
  • Provides client and/or its worksite employees with workers’ compensation insurance and unemployment insurance
  • Offers and administers employee benefits, including health insurance, 401(k), a Section 125 plan, voluntary insurance products, and more!

Client Company:

  • Responsible for directing and controlling the daily activities of their respective business
  • Responsible for ensuring a safe work environment
  • Keeps track of actual hours worked and reports those hours to the PEO for processing
  • Transfers payroll funds to the PEO each pay period

Does The PEO Have To Process My Payroll?

Yes. Paying wages is an essential component of the co-employment relationship. Without this, the PEO would not be able to provide workers’ compensation, health benefits, and other PEO services related to the co-employment relationship.

Employers provide the salary and hours for each worksite employee and the PEO processes the payroll and gives all payroll-related taxes and reports.

Will We Lose Our Company Relationship With Our Employees By Partnering With A PEO?

No. The management relationship you  have with your employees will continue. Partnering with a PEO enables you to improve this relationship by offering improved HR-related products and other PEO services.

Who Is Responsible For Compliance With Employment Laws And Regulations?

Ultimately, the responsibility for complying with most employment laws and regulations lies with the client. However, the PEO can provide you with guidance and education to help you remain compliant.

Who is Responsible for the Employment Taxes?

While the client is responsible for providing the funds to cover payroll and payroll taxes, the PEO administers the payment of wages to employees and payment of taxes to the appropriate agencies.