A Professional Employer Organization (PEO) pools together small businesses under one FEIN to streamline administration, shift certain employer liability, and save time so that a business may focus on its core goals. However, the employer retains control over the entire operation of his/her business.
An entrepreneur does not start a business to become an expert on handbooks, payroll taxes, and employment law! However, once the first employee is hired, a second business is opened – the business of being an employer. That is where a PEO comes in and, in a nutshell, handles every aspect of non-revenue generating employee administration.
Think of a PEO has another trusted advisor. Just like businesses need a CPA firm with expertise in all elements of accounting and business planning and a Law Firm with expertise in all aspects of the law and contracting, they use a PEO with expertise in human resources including benefits, payroll & tax, performance management, workplace liability, safety, compliance, record keeping, hiring, retention and separation.