What is a PEO and an ASO?


PEO stands for Professional Employer Organization. 

It is a company which provides a co-employment relationship, where a PEO becomes the legal "employer of record" for all your employees. Under this arrangement, the PEO hires your employees and lease them back to you - hence the term "employee leasing. 

The PEO uses their own ID to submit payroll records and file taxes, offer benefits, and provide workers' compensation insurance. It's important to recognize that you always run the show. You maintain control over all business operations and the 'hiring" of your employees and control what they do. 

All you are doing is transfering to the PEO Vendor (payroll service company) the employer responsibilities and liabilities. The "big gain" to your business is to streamline all the HR processes, spread some of the risk, and ensure compliance with all local, state and federal regulations.

ASO stands for stands for Administrative Service Organization. 

In most cases, it refers to a PEO using the ASO Model where the employees remain your employees (all employees paid are reported on your own Tax ID number (FEIN). 

Under the ASO model the PEO supplies HR services, including but not limited to payroll, HR and insurance options. 

The ASO model is also used to refer to the traditional payroll services  offered by your accountant.


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