What Is a PEO?
A Professional Employer Organization, or PEO, provides client companies with outsourced human resource services such as payroll, state unemployment insurance and administration of associated claims, workers’ compensation, and oversight of aggressive claim management (TPA adjusters), as well as employment law compliance assistance by providing expert advisement, policy development and documentation, and compliance protocols. PEOs require a contractual agreement that specifies the duties and responsibilities of the PEO and the client company. This establishes a model known as “joint employment” or “co-employment.” Unless otherwise required by a specific State mandate, the PEO assumes the “statutory” employer role while the client company assumes the “common law employer” role. This arrangement allows the client company to transfer many of its key employer responsibilities to the PEO while managing their employees’ day-to-day activities.
The PEO is considered the “Employer of Record” for tax and insurance purposes and federal and state employment laws like wage and hour regulations. In general, the PEO bears most of the employer liability risks (the agreement will specify specific thresholds of liability the PEO and client company have accepted and under which circumstances).
The PEO generally provides the employee benefit programs, such as retirement plans and health coverage, at a cost-saving to the client company based upon the advantages of economies of scale. The PEO can also absorb and spread risk across all its clients (risk absorption and transfer). PEOs give small to mid-sized businesses access to more extensive company benefits.
What Is an ASO?
The term “ASO” stands for Administrative Services Organization. Much like a PEO, the ASO can provide many services but are offered on a carte basis.
An ASO does not become the co-employer of the client company’s employees but rather is an outsourced administrative entity providing services to the client company (the client company is the sole employer). However, the ASO may handle tax and insurance filings; they are submitted under the client company’s tax IDs. While an ASO can offer guidance on compliance, risk, and human resource matters, it is solely the responsibility of the client company to act upon them. The client company bears the entirety of employer liability. Employer benefit plans, retirement plans, profit-sharing arrangements and other benefits and insurances are provided through the client company.
What is an HRO?
We are not your employees’ employer in this model, but we provide virtually the same suite of services that a PEO offers — for a fraction of the cost. We offer you the best of both service models without becoming the “employer of record.” Zynergia provides a toolbox full of resources and services to choose from in areas like benefits administration, employee onboarding, managed payroll, employee handbooks, employee training, and regulatory compliance.
We handle transactional HR tasks so that you can concentrate on company culture, employee retention, productivity, and patient services. We offer a single outsourcing solution that gives you more time to attend to your organization’s strategic execution, productivity, and profitability. The Zynergia cloud-based workforce management solutions integrate HR, time and attendance, and payroll functions to deliver better visibility and control of your labor costs, productivity, and compliance.
While Zynergia can deliver as an ASO or PEO, we consider ourselves a Human Resources Outsourcing (HRO) service provider. HRO is one of the fastest-growing segments of the Business Process Outsourcing (BPO) market. Many businesses turn to HRO firms to help them manage payroll, benefits and HR administration, workplace compliance and recruiting. Companies are always looking for ways to reduce costs and improve efficiencies and productivity. By outsourcing certain HR functions, business leaders gain time to play a more strategic role in their organizations. Solutions are tailored to individual client needs, designed to be practical day-to-day and deliver long-term strategic benefits through HR management. Our services can be used independently or integrated for a comprehensive plan, giving you flexibility and expertise when you need it most.