What does PEO stand for?

Quesstion: What does PEO stand for?  Answer: PEO is an acroym for Professional Employer Organization. Read more below!

What is a PEO?

A PEO is an “Employee leasing” service. Employee leasing is where the PEO hires the employees of the customer, and then leases those employees back to the customer. The business model of a PEO enables the client company to outsource their tax, payroll, and insurance related operations to the PEO. Since the leased employees are legally employed by the PEO, the PEO is then responsible for functions such as processing garnishments, fighting unemployment claims, filing taxes, payroll processing, and many more. Leased employees continue to work under the direction of the client company (Not the PEO), allowing the client company to focus on their revenue producing operations. Theoretically, specialization and economies of scale enables the PEO to perform the HR related duties at cheaper rate than the client company, and then extend these savings to the client, creating value. If the cost of revenue has been reduced via the PEO service, then the client company has become more profitable.

What Does PEO Stand For? | By Mike Smith