Professional Employer Organizations (PEO) are organizations which provide integrated, cost effective solutions for the management and administration of human resources for its clients by contractually assuming employer rights, responsibilities, and risk, and by establishing and maintaining an employer relationship with the workers assigned to client companies.
PEO’s responsibilities include:
- Reserves a right of direction and control of the employees and may share such responsibility with the client, consistent with the client’s responsibility for its product or service
- Pays wages and employment taxes of the employees
- Reports, collects, and deposits employment taxes with state and federal authorities
- Establishes and maintains an employment relationship with its employees that is intended to be long term and not temporary
- Retains a right to hire, reassign, and fire the employees
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