Zamp HR’s Professional Employer Organization (PEO) Services

Over 173,000 businesses employing over 4 million people outsource their HR functions to a Professional Employer Organization (PEO). The total employment represented by the PEO industry is roughly the same as the combined number of employees of Walmart (US only), Amazon, Kroger, and Home Depot. Why do so many companies use PEO services rather than other HR outsourcing solutions? The answer lies in the question “what is a PEO?”

What is a PEO?

A professional employer organization is a comprehensive HR outsourcing service that takes on certain administrative responsibilities from employers. Unlike dedicated payroll outsourcing services or administrative services organizations, a PEO can provide access to employee benefits at a lower cost than would otherwise be possible for small- and medium-sized businesses. At the same time, PEOs are the only HR outsourcing solution that can both process and file payroll taxes [LINK TO: payroll tax filing services landing page] for you.

This is made possible through a client service agreement (CSA) or service level agreement (SLA) that splits administrative responsibilities between the PEO and the client. You maintain control over day-to-day worksite functions like hiring and firing while the PEO is designated as an administrative employer for tax purposes. This agreement is referred to as “co-employment” because payroll taxes are filed under the PEO’s Federal Employer Identification Number (FEIN) rather than your business’ FEIN.