Professional Employer Organization PEO)

Posted in Human Resource Terms, Total Reads: 1040
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Definition: Professional Employer Organization PEO)

professional employer organization (PEO) is a firm that offers a service under which an employer can outsource employee management tasks such as

  • Employee benefits
  • Payroll and workers' compensation
  • Recruiting
  • Training and development


It does all these by hiring employees for a client company, thus becoming their employer on record for tax purposes and insurance purposes.


To put it simply, PEO is an association through which a company selects a provider to become the dedicated HR management and benefits administration partner and deliver a broad range of HR services through a “co-employment” or employee leasing model.


In a standard PEO, the day-to-day control is retained over how you manage your employees, and theservice provider handles the HR management and benefits administration


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