1. Insurance Terms & Definitions/
  2. Insurance Terms Starting With P

Professional Employer Organization

What is a Professional Employer Organization?

A professional employer organization (PEO) is a specialized company that partners with businesses to manage certain aspects of human resources, employee benefits, payroll administration, and other employment-related functions. By collaborating with a PEO, businesses can outsource these administrative responsibilities, allowing them to focus on their core operations and strategic goals. 

Professional Employer Organization in More Detail

At its core, a professional employer organization acts as a co-employer, sharing certain employer responsibilities with the client business. This arrangement allows the PEO to handle essential HR functions such as payroll processing, employee benefits administration, risk management, and regulatory compliance. By leveraging the expertise and infrastructure of a PEO, businesses can access cost-effective employee benefits packages, streamline payroll processes, and ensure compliance with employment regulations.

Overall, a professional employer organization serves as a valuable partner for businesses seeking to enhance their HR capabilities and alleviate administrative burdens. The PEO model allows businesses to tap into specialized HR resources, mitigate compliance risks, and provide competitive employee benefits, all while maintaining their day-to-day control and direction.