PEOs, or professional employer organizations, partner with companies to help manage HR, payroll, benefits and more.
PEOs (professional employer organizations) partner with companies to provide comprehensive HR outsourcing to help manage a company’s human resources, employee benefits, regulatory compliance and payroll outsourcing.
A PEO works through a co-employment arrangement, which means the PEO contractually shares certain employer responsibilities and risk with the company.
By partnering with a PEO, companies are able to:
ADP® offers an IRS-certified PEO* solution called ADP TotalSource®. For you, it means ADP's PEO meets the high standards set by the IRS. It ensures your federal employment taxes are paid. It means you're not subject to double IRS taxation that can occur when you join a noncertified PEO. It is a win-win for you and your employees.
See everything you can accomplish with ADP TotalSource®.
Millions of workers in the United States are currently co-employed through PEOs.
PEOs are a good fit for almost all industries, including (but not limited to):
The contract between a client and the Professional Employer Organization (PEO) establishes the co-employment relationship. The PEO assumes certain aspects of employer responsibilities. Your employees become co-employed by both you and the PEO, thereby giving you access to the PEO's built-in HR, compliance, benefits, payroll and tax infrastructure.
Certification by the IRS gives business owners confidence that a PEO partner meets the high standards set by the U.S. government and is recognized as the employer for federal employment tax purposes if certain other conditions are met.
A certified PEO is:
ADP TotalSource is a certified PEO.*
No. It is important to note that every PEO is a little different. ADP's PEO is responsible for processing your employees' payroll and withholding and for paying payroll taxes, maintaining workers’ compensation coverage, providing employee benefits and career development programs, providing human resources guidance, and providing worksite safety guidance. You continue to operate your business as you did prior to the PEO relationship. You remain an employer and do not lose any of your management or supervisory rights.
In fact, because PEOs help you manage HR and minimize risk, you actually have greater control of your business, because you can focus on your priorities — and not HR.
No. In fact, with ADP’s PEO, we learn your challenges and aspirations, and recommend strategies to help you achieve your goals. You are able to leverage the best of both worlds: the flexibility and control of owning your own business, along with the benefits and expertise of a large organization.
If you want help in this area, ADP can help you shape your company culture and employment brand to represent the company you are today — or wish to be in the future.
A PEO gives your business a risk partner that shares certain employment risks. As a vested partner, ADP TotalSource tasks our risk-and-compliance experts to keep up with ongoing changes to HR and safety regulations. We can help you react and comply with the changes that affect your business.
A PEO will also help you comply with other complex employer requirements.
No. The relationship between you and the PEO is distinct from the PEO's relationship with other companies. No contractual relationship is ever created between all of the PEO clients. You are not responsible for any employees other than your own.
In a co-employment relationship, you share certain employer responsibilities with the PEO that cannot be achieved through typical HR outsourcing. For instance, with ADP’s PEO you gain access to robust benefits offerings and employee perks typically only provided by large organizations, and you may get additional protection for your business should you face an employee lawsuit.
No. While the co-employment model is a part of every PEO, there are a few key ways in which providers differ from one another:
Learn more about our PEO offering, ADP TotalSource.
You have complete control over whom you hire and the work they perform day in, day out.
ADP's PEO supports businesses with as few as two employees and as many as several thousand employees.
ADP's PEO provides you with dedicated experts, some of whom will come on-site when appropriate. The individuals are not, however, at a desk in your office every day.
*The IRS does not endorse any particular certified professional employer organization. For more information on certified professional employer organizations go to www.irs.gov.