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What Is a PEO? |
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A professional employer organization (PEO) is a company that builds an infrastructure of people, tools and processes that enable client companies to cost-effectively outsource the management of human resources administration.
Businesses today need help managing increasingly complex employee related matters such as employee relations, health benefits, workers' compensation claims, payroll, payroll tax compliance, and unemployment insurance claims. By outsourcing these burdensome tasks to a group of professionals, companies can focus on their core competencies and grow their bottom line.
A PEO delivers these services by establishing and maintaining an employer relationship with the employees at the client's worksite and by contractually assuming certain employer rights, responsibilities, and risk.
Between 1980 and 2000, the number of labor laws and regulations grew by almost two thirds, says the federal Small Business Administration, which estimated owners of small or mid-sized business spent up to a quarter of their time on employment-related paperwork. PEOs assume much of this burdensome responsibility and help companies comply with all these regulations. |
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