A company that enters into a co-employment relationship with a client business to handle payroll, benefits, workers comp, and HR compliance.
A Professional Employer Organization (PEO) is a service provider that takes on legal employer status for tax and benefits administration of a client business's workforce, while the client retains operational direction of the work itself. The PEO pools many small and mid-sized client businesses into one large benefits and workers comp pool, which is how small employers gain access to benefits packages and workers comp pricing typically available only to much larger employers.
PEOs typically serve businesses with 10–500 W-2 employees, though both ends of that range are flexible. Pricing is per-employee-per-month (PEPM), bundling admin fee, workers comp premium, benefits premium, technology, and HR support.
The industry has two trade certifications worth verifying: IRS Certified PEO (CPEO) status, which transfers federal employment tax liability to the PEO under the 2014 Small Business Efficiency Act, and ESAC accreditation, which signals financial stability and ethical conduct.
A company that enters into a co-employment relationship with a client business to handle payroll, benefits, workers comp, and HR compliance.
A Professional Employer Organization (PEO) is a service provider that takes on legal employer status for tax and benefits administration of a client business's workforce, while the client retains operational direction of the work itself.
Most PEO buying decisions touch several related concepts at once. Professional Employer Organization (PEO) typically comes up alongside the other terms in this category. Closely related terms include Co-employment, Certified Professional Employer Organization (CPEO), Employer Services Assurance Corporation (ESAC).
This is one entry from our PEO glossary covering payroll, benefits, workers comp, HR compliance, and PEO mechanics. Browse all terms.
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