Professional Employer Organization (PEO)

A legal/contractual arrangement in which a third party jointly employs a group of workers with its client company. The PEO is fully responsible for all wages, benefits, and statutory costs, and may provide other services. PEOs provide a service that is similar to payrolling. However, PEOs employ the workers on a joint employment basis (along with their client companies), whereas payrolling providers are the exclusive employer of record for their workers.