Why PEO and Employee Leasing are needed

A professional employer organization (PEO) or employee leasing involves outsourcing benefits administration for employees such as payroll, workers’ compensation and human resources. A PEO will hire a companies employees and them lease them back to their original employer under management fee. This company is then considered a PEO’s client.

This is done for tax and insurance purposes. Even though employees are leased out the original employers is still in charge of daily activities.