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How does a PEO arrangement work?

Q: How does a PEO arrangement work?
A: In a relationship among a PEO, a worksite employee, and a client company, there exists a co-employment relationship in which both the PEO and the client company have an employment relationship with the worker. The PEO and the client company contractually allocate some of the shared traditional employer responsibilities and liabilities. The PEO assumes the responsibility and the liability to the "business of employment", such as risk management, personnel management, human resource compliance, payroll and tax compliance. The client company manages product development and production, marketing, sales and service. The PEO assumes and establishes an employment relationship with the worksite employee and provides a complete human resource and employee benefit package.

 

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