Professional Employer Organization (PEO)
Alternative Employment is a generic term referring to a variety of services which enable business owners to cost-effectively outsource all or part of their human resources management, employee benefits, payroll and workers’ compensation and other strategic services, such as, recruiting, risk/safety management, and training and development.
Small to mid-size employers can find these solutions particularly beneficial in reducing costs, alleviating labor law compliance burdens, enhancing employee benefits, attracting and retaining skilled employees and, by shifting certain legal liabilities to a third-party.
There are three primary models of alternative employment. Each has their own merits and limitations.
Professional Employment Organizations (PEOs) create a co-employment relationship with the client and employee. State and federal statutes recognize this co-employment relationship: The PEO, as the administrative employer and the client as the work site employer. This relationship allows for the transfer of certain employer liabilities and obligations to the PEO. The PEO takes on the responsibility for payroll, tax, worker’s compensation, and benefits administration under its federal employer identification number. The client retains all the rights and responsibilities of the work site employer, including the right to hire and fire. Additionally, since worker’s compensation and employee benefits are acquired in the name of the PEO, there is the potential for significant premium savings.
Administrative Services Organizations (ASOs) provide similar services for the administration of payroll, taxes and benefits however, it is done under the client’s federal employer identification number with less potential of transferring liabilities. Additionally, since there is no co-employment relationship, worker’s compensation and employee benefits must be acquired in the name of the client and may incur a higher premium.
Staffing Companies provide even fewer services and are generally limited to providing short-term, project-specific or seasonal labor.
Contact us today for more information about alternative staffing solutions or fill out our online quote form.
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