A Professional Employer Organization (PEO) is defined as an organization
that provides an integrated and cost effective approach to the management
and administration of the human resources and employer risk of its clients,
by contractually assuming substantial employer responsibilities and risk, through the establishment and maintenance of a co-employer relationship
with the clients employees.
More specifically, a PEO
establishes a contractual relationship with its clients whereby the PEO:
 |
Pays wages and employment
taxes of the employee out of its own accounts; |
|
Reports, collects, and
deposits employment taxes with state and federal authorities; |
|
Establishes and maintains an
co-employment relationship with its employees which is
intended to be long term and not temporary; |
|
Assumes responsibility as an
employer for specified purposes of the workers assigned
to the client locations; and |
|
Shares the responsibility of
co-employees wages and safety with the client.
|
Businesses today need help
managing increasingly complex employee related matters such as personnel
management, health benefits, workers' compensation claims, payroll, payroll
tax compliance, and unemployment insurance claims. Businesses contract with
a PEO to assume these responsibilities, which then allows the client to
concentrate on the revenue-producing side of its operations.
A PEO provides integrated
services which more cost effectively manage critical human resource
responsibilities and employer risks for clients. PEOs deliver these services
by establishing and maintaining an employer relationship with the workers
assigned to its client and by contractually assuming substantial employer
rights, responsibilities, and risk.
|
