Types of Professional Employer Organizations (PEOs)
PEO Terms
Over the last 20 years Professional Employer Organizations (PEOs) have searched for a common definition that was uniquely identifiable to the public. Terms include:
- Professional Employer Organization - PEO
- Employee Leasing Company
- Staff Leasing Company
- Human Resources Outsourcing Organization - HRO
- Administrative Services Organization - ASO
PEO Services
Some industry members have tried to define each of these terms differently in an attempt to differentiate their company's offerings. Unfortunately, this has left consumers of PEO services confused about the PEO arrangement and its value for business owners. At StaffMarket we define a PEO as any company offering to assist businesses with:
- Payroll Services
- Workers' Compensation Insurance
- Safety and Risk Management
- Employee Benefits
- Health Plans
- Human Resources
- Employment Related Regulatory Compliance
Types of PEO Arrangments
Employer of Record Responsibilities
"Classic" PEO
Employee taxes reported and deposited under the PEO’s FEIN.
PEO with "Carve-Outs"
Employee taxes reported and deposited under the PEO’s FEIN.
PEO - ASO
Employee taxes reported and deposited under the Client’s FEIN.
Workers’ Compensation Insurance
"Classic" PEO
Coverage provided under PEO’s master policy.
PEO with "Carve-Outs"
Coverage may be provided by policy in client's name.
PEO - ASO
Coverage provided by policy in client's name.
Safety and Risk Management
"Classic" PEO
Claims management provided by PEO. Safety programs compliance administered by PEO.
PEO with "Carve-Outs"
Claims management provided by PEO. Safety guidance provided by PEO.
PEO - ASO
Claims management provided by PEO. Safety guidance provided by PEO.
Health Plans
"Classic" PEO
Coverage offered under PEOs master policy.
PEO with "Carve-Outs"
Coverage may be provided by policy in client's name.
PEO - ASO
Coverage provided by policy in client's name.
Employee Benefits
"Classic" PEO
Supplemental benefits offered under PEO's master policy. 401K provided by policy in client's name.
PEO with "Carve-Outs"
Supplemental benefits may be offered under PEO's master policy. 401K provided by policy in client's name.
PEO - ASO
Supplemental benefits offered by policy in client's name. 401K provided by policy in client's name.
Human Resources
"Classic" PEO
Multitude of services offered in either “a la carte” or bundled pricing.
PEO with "Carve-Outs"
Multitude of services offered in either “a la carte” or bundled pricing.
PEO - ASO
Multitude of services offered in either “a la carte” or bundled pricing.
Regulatory Compliance
"Classic" PEO
Provided by PEO.
PEO with "Carve-Outs"
Provided by PEO.
PEO - ASO
Client’s responsibility.
