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What Is a PEO?
What Is a Professional Employer Organization (PEO)?
A PEO firm, or professional employer organization, is defined as a business entity that provides outsourcing services for human resources to client companies through a co-employment relationship. The PEO relationship involves a contractual allocation and sharing of employer responsibilities between a PEO and the client. This shared employment relationship is often referred to as "co-employment."
What Is Co-Employment?
Co-employment is a relationship where the PEO company acts as the "administrative employer" and the client acts as the "worksite employer." This relationship is based on a true partnership. Because of the co-employment relationship, a PEO company helps small and medium-sized businesses achieve economies of scale that they may not be able to achieve on their own.