PEO - Employee Leasing

PEO - Employee Leasing

What is An Employee Leasing Service?

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Many small businesses do not have the time or resources to meet their administrative and human resources needs. When a business owner realizes the company cannot handle such responsibilities, they typically outsource them. An employee leasing service can often provide the solution.

Employee leasing

Employee leasing service companies take over the human resources or administrative duties for a business. The company usually becomes the employer of record for the client's existing employees and takes over the recruitment and hiring of new ones. At other times, the company is contracted to take over payroll, benefits, and worker's compensation duties. The level of service is dependent on specific client needs.

Types of employee leasing services

There are three models of employee leasing services:

  1. administrative services organization (ASO)
  2. human resources organization (HRO)
  3. professional employer organization (PEO)

Each model provides different levels of employee leasing services. Determine what your business requirements are to find the right model for your administrative and human resources needs.

The ASO model provides payroll, insurance, benefits, and other human resources services to employers. You remain the employer of record for W-2s, worker's compensation claims, benefits, and more. The ASO simply performs the services while you assume the liability.

An HRO model provides human resources management services. Such services include drug testing, employee bonding, discipline, and termination along with benefits processing duties. Your business remains responsible for administrative tasks like payroll and taxes. Read more about HRO services.

A PEO takes over the administrative tasks for another business or client. PEOs are contracted to assume your business' administrative and human resources responsibilities. The PEO is liable for adhering to any and all regulations, laws, and other compliance issues. Even though you're still in charge of the business, the PEO handles the human resources role so you can focus more on operations, production, and revenue-earning endeavors.

Employee leasing solutions

Besides the solutions listed above, here are some HR facets that employee leasing services can help keep your company more informed about:

These employee leasing solutions are provided by either an ASO or HRO, while PEOs can provide all of these solutions in a comprehensive package.

To learn more about working with a PEO or other company that can outsource your HR responsibilities, submit a BuyerZone request for price quote on employee leasing services.

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