PEO (Professional Employer Organization)

A Professional Employer Organization (PEO) is a third-party service provider that offers comprehensive HR solutions to small and medium-sized businesses. PEOs enter into a co-employment arrangement with client companies, where the PEO takes on certain HR responsibilities, such as payroll processing, employee benefits management, compliance with labor laws, and risk management. This allows businesses to outsource administrative tasks, reduce legal risks, and offer competitive benefits to their employees. By pooling employees from multiple companies, PEOs can provide more favorable insurance rates and better benefits packages. While the business retains control over day-to-day operations, the PEO manages the back-office HR functions.