HR Glossary

Professional Employer Organization (PEO)

Professional employer organization, also known as co-employment, refers to a firm that provides staffing service and is contracted to undertake the employers responsibilities and risk for his/her workforce.

what-is-professional-employer-organization-peo

Professional employer organization definition (PEO)

Professional employer organization, also known as co-employment, refers to a firm that provides staffing service and is contracted to undertake the employers responsibilities and risk for his/her workforce.

PEO process

Through this arrangement employers outsource employee management tasks such as employee benefits, payroll and workers’ compensation, recruiting, risk/safety management, and training and development.

The PEO then becomes the employer of record for tax purposes and the client company continues to direct the employees’ day-to-day activities.

PEOs charge a service fee is from 3 to 15% of total gross payroll.

A great example of a professional employer organization are New Horizons Global Partners and HROne.

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