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What is a PEO? Is it different than a HR Advisor?

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artur asked 1 year ago
Not sure how to choose.
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1 Answer
Riia O’Donnell replied 1 year ago
There are differences between a PEO and an HR Advisor. A PEO (professional employer organization) is a joint employer with businesses. When a business (typically small to mid-size companies) enters into a contract with a PEO, the company ‘leases’ their own employees from the PEO. Why do they do this? For a fee, the PEO processes the employee’s payroll, making all needed deductions and paying all the required taxes. For small businesses that don’t want to handle payroll, this can be a great way to outsource a difficult task.
PEO’s also often allow small businesses to get their employees benefits they wouldn’t otherwise have access to – like healthcare coverage. Because ABC Company’s employees are leased from and paid for by the PEO, along with other company’s employees, the PEO may be able to purchase coverages at a lower price than ABC Company could do so on their own. Combining all the employees at many companies often makes coverage more affordable through the PEO. PEOs should be licensed and certified to assure they are qualified and make the appropriate tax payments.
HR Advisors are simply that – they advise a company on all things HR. For small businesses that don’t have a dedicated HR professional on staff, these contractors provide assistance with legal compliance, recruitment and hiring, employee matters, complaints and more. HR Advisors can be used on an hourly basis – companies are billed for the time and services they use, or they can be on a retainer – available as/when needed. HR Advisors can be remote or on-site to answer questions, provide support and help businesses deal with basic or complex compliance and employee matters.
Zenefits Advisory Services offers businesses the best of all worlds: payroll processing, benefits administration and access to highly trained and qualified HR professionals.
Stephanie replied 12 months ago

Yes and another reason my organization went with a PEO was for compliance purposes as well. We are a remote organization employing in approx 20 states, so having the PEO keeping an eye on labor compliance has been the biggest benefit for us.

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