No, it isn’t an evil attempt to take over your company. The PEO relationship involves a contractual allocation and sharing of employer responsibilities between the PEO and the client. This shared employment relationship is called co-employment. Each party is responsible for certain obligations of employment, while both parties will share responsibility for other obligations. Both the PEO and the client are the “employer” for some purposes, but neither party will be found to be the employer for all purposes.
The client provides worksite employees with the training and tools needed to perform their job, in addition to the actual place of work. The PEO provides human resources services to worksite employees, such as worker’s compensation Insurance, unemployment insurance and a broad range of employee benefits programs, and is responsible for collecting and remitting payroll taxes.
And if you think it sounds like legal mumbo-jumbo just to give you an advantage, you’re right. We don’t make the laws, we just follow them—but we do it in a way that makes sense for you.