National Association Of Professional Employer Organizations

A professional employer organisation (PEO) is an outsourcing firm that provides services to small and medium-sized businesses. Typically, the PEO offering may include human resource consulting, safety and risk mitigation services, payroll processing, employer payroll tax filing, workers' compensation insurance, health benefits, employers' practice and liability insurance, retirement vehicles (401(k)), regulatory compliance assistance, workforce management technology, and training and development. The PEO enters into a contractual co-employment agreement with its clientele. Through co-employment, the PEO becomes the employer of record for tax purposes, filing payroll taxes under its own tax identification numbers. As the legal employer, the PEO is responsible for withholding proper taxes, paying unemployment insurance taxes and providing workers' compensation coverage. via Wikipedia ↗