Definition of a Professional Employer Organization

A Professional Employer Organization (PEO) is defined as an organization that provides an integrated and cost effective approach to the management and administration of the human resources and employer risk of its clients. This is acheived by contractually assuming substantial employer rights, responsibilities, and risk and, through the establishment and maintenance of an employer relationship with the workers assigned to its clients.

More specifically, a PEO establishes a contractual relationship with its clients whereby the PEO:

• assigns workers to client locations, and thereby assumes responsibility as co-employer;
• reserves a right of direction and control of the employees.
• Employer responsibilities are shared with or allocated to the client, consistent with the client's responsibility for its product or service;
• pays wages and employment taxes of the employee out of its own accounts;
• reports, collects, and deposits employment taxes with state and federal authorities;
• establishes and maintains an employment relationship with its employees which is intended to be long term and not temporary; and
• retains a right to hire, reassign, and fire the employees.

Businesses today need help managing increasingly complex employee related matters such as personnel management, health benefits, workers' compensation claims, payroll, payroll tax compliance, and unemployment insurance claims. Businesses contract with a PEO to assume these responsibilities, which then allows the client to concentrate on the operational and revenue-producing side of its operations.

You get more out of your business when you get more out of your people. However, you may not have the experience and expertise to become a human resources expert. With the increasing number of employment-related government regulations, HR management has become a colossal task, demanding considerable resources. Human resource outsourcing can help make your business more productive and profitable by turning your workforce challenges into competitive advantages.

ProFile, Inc. is a leading PEO (Professional Employer Organization), not a staffing agency, and we provide HR outsourcing strategies to small and medium-sized businesses to maximize the value of your employees for increased productivity. Our PEO services provide administrative relief by assuming and/or sharing many of your responsibilities as an employer, so that you can focus your energy on other business essentials.