What is a PEO?
A business owner is an employer by default: "The government has deemed American Business Owners non-compensated, highly penalized tax collectors, providers of Workers' Compensation, Health Insurance and the redeemer of social ills."
A Professional Employer Organization (PEO) can be utilized to outsource a significant portion of the administrative burden of being an employer. The PEO can process payroll, handle the payroll tax administration; provide workers' compensation and employee benefits. PEOs can also assist in labor law compliance, risk management, EAP, hiring, firing and other HR functions.
Theoretically, PEO is a vendor consolidation and outsourcing management tool, which is facilitated through a co-employment agreement.