Pronunciation: \pē- -\ ō\
Function: abbreviation
Definition: Acronym For Professional Employer Organization
A business processes outsourcing company that provides complete HR (human resources) management for small and medium-sized employers under a contractual co-employment relationship through which the PEO assumes responsibility for many employment-related obligations and liabilities.
What Can A PEO Do For An Employer?
Reduce the cost and relieve the administrative burdens of human resources management:
  • payroll
  • tax reporting
  • time and attendance record-keeping
  • garnishments
  • exempt and non-exempt employee determination
  • I-9 employment eligibility verification
Provide employment practices liability insurance protecting against lawsuits for:
  • discrimination
  • wrongful termination
  • harassment


Provide workers’ compensation insurance
Professionally manage occupational risks:
  • safety and loss control
  • workers’ comp claims management

Offer large group employee benefits:
  • health insurance
  • limited medical
  • retirement / 401k plans
  • life insurance
  • disability
  • dental
  • flexible spending accounts
  • employee assistance plans
Ensure compliance with the dozens of federal and countless state and local employment laws:
  • EEOC
  • FMLA
  • OSHA
  • ADEA
  • ADA


Professionally manage employment functions:
  • recruitment and selection
  • termination
  • background checks
  • drug testing
  • employee handbooks
  • performance appraisal systems
  • job descriptions
  • training and development
  • outplacement services
  • relocation services
PEO Clients Can Improve Their Bottom Line By Making Better Use of That Always-Scarce Commodity: Time
Partnering with a PEO makes it possible for a company to spend more time building and running its business instead of devoting countless hours and expense to managing the myriad details associated with employment responsibilities.

PEO Clients Manage HR More Effectively And Professionally For Less Cost PEOs provide a cost-effective alternative to hiring an HR staff or asking one of the company’s employees to handle HR in addition to the other duties that already fill the day. PEOs put a full complement of experienced HR specialists (payroll, benefits, regulatory compliance, tax reporting, workers’ compensation) at the service of their clients every day.
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