PEO (Professional Employer Organization)
Definition
An HR outsourcing solution where a third-party partner shares employment responsibilities with your business, managing key functions like HR, payroll, benefits, and compliance through a co-employment model.
What is a PEO?
A PEO like ExtensisHR becomes the employer of record for your workforce under a co-employment arrangement. While PEOs handle HR-related responsibilities, you retain full control of day-to-day operations and business decisions.
Why is a PEO Important for Employers?
- Frees up internal resources
- Offers enterprise-level benefits to small businesses
- Transfers liability for compliance and payroll
- Enhances the employee experience through dedicated HR support
FAQs
How does a PEO differ from a staffing agency?
A PEO becomes the employer of record for tax and compliance purposes, while you retain control of day-to-day operations—unlike a staffing firm that supplies temporary labor.
Is my business still in control when working with a PEO?
Yes. You manage your team, while the PEO handles HR, payroll, compliance, and benefits administration in a co-employment model.
Do employees receive better benefits through a PEO?
Often, yes. PEOs pool employees across multiple businesses to offer access to enterprise-level benefits at more competitive rates.
How ExtensisHR Can Help
As your PEO, we handle:
- Payroll processing and tax administration
- Benefits administration and regulatory compliance
- Workers’ compensation and EPLI
- Employee handbook, policies, and ongoing HR support