Professional Employer Organization
Q: What is a PEO?
A: A Professional Employer Organization, or PEO, provides companies with outsourced HR services, such as payroll, state unemployment insurance, worker’s compensation, and employment law compliance assistance.
PEOs do this through a shared tax ID with their client company—a model known as “joint employment” or “co-employment.” This arrangement allows the client company to transfer many of its key employer responsibilities to the PEO, while continuing to manage their employees’ day-to-day activities.
Q: Who is the employer of record if I'm part of a PEO?
A: The PEO is considered the “Employer of Record” for tax and insurance purposes, as well as federal and state employment laws like wage and hour regulations. If legal problems arise that are related to the HR function, the PEO assumes some of that risk. Formal agreements between the PEO and client company are used to spell out the division of responsibilities between the two.
Q: Does working with a PEO mean I have to lay off all of my HR staff?
A: You can choose to outsource your HR entirely to a PEO, or you can use a PEO to support and supplement your existing staff. Outsourcing can help fill in knowledge gaps and relieve overburdened staff. Many clients of Syndeo work with us and retain an HR team.