What is a Professional Employer Organization (PEO)?


Professional Employer Organizations (PEOs) enable clients to cost-effectively outsource the management of Human Resources (HR), Employee Benefits, Workers’ Compensation and Payroll. PEO clients focus on their core competencies to maintain and grow their bottom line.

Businesses today need help managing increasingly complex employee related matters such as Health Benefits, Workers’ Compensation claims, Payroll, Payroll Tax Compliance and Unemployment Insurance Claims. They contract with a PEO to assume these responsibilities and provide expertise in Human Resources management. This allows the PEO client to concentrate on the operational and revenue-producing side of its operations.

A PEO provides integrated services to effectively manage critical Human Resource responsibilities and employer risks for clients. A PEO delivers these services by establishing and maintaining an employer relationship with the employees at the client’s worksite and by contractually assuming certain employer rights, responsibilities and risk.


For your Business, a PEO:

  • Provides experienced professionals in HR, benefits, payroll and risk management.
  • Delivers professional assistance with compliance (payroll, OSHA, EEOC).
  • Provides specialized reports and secure internet access to payroll, benefits and personnel data.
  • Provides access to professional HR guidance and materials.
  • Manages unemployment and Workers’ Compensation claims.
  • Supplies a standardized employee handbook, policies, procedures and practices, as well as the option for custom policies and procedures.
  • Improves cost control.
  • Delivers access to better benefits.
  • Helps reduce turnover.
  • Provides quality benefits to attract and retain the best employees.
  • Provides you more time to focus on your bottom line.
  • Gives you the opportunity to grow your business faster.

For your Employees, a PEO:

  • Provides access to comprehensive benefits which may include 401(k), Section 125 plan, comprehensive health insurance benefits, Flexible Spending Plan and Employee Assistance Program (EAP).
  • Delivers on-time and accurate payroll.
  • Provides professional assistance with employment-related issues.
  • Supplies employee handbooks, policies, procedures and practices.
  • Offers up-to-date information on labor regulations, workers’ rights and worksite safety.
  • Processes Workers’ Compensation claims efficiently and responsively.
  • Enables employees who move from one PEO client to another to avoid loss of eligibility for benefits.
  • Provides improved access to payroll information and benefits.
  • May offer credit union membership and banking privileges.

For Government, a PEO:

  • Consolidates several companies’ employment tax filings into one.
  • Provides professional preparation and reporting of payroll taxes and new hire information.
  • Extends access to medical benefits to more workers.
  • Provides access to 401(k) retirement savings opportunities to more employees.
  • Improves the communication of government requirements and changes to small businesses and their employees.
  • Reduces litigation by helping to resolve many workplace disputes before they reach court.
  • Allows government agencies to reach businesses through a single-employer entity.