United States: Professional Employer Organizations – What’s The Buzz?

Professional Employer Organizations, also known as "PEOs," are becoming more popular every year.  PEOs service businesses with only one employee and up to hundreds, and in almost any industry imaginable.  They also recently obtained long-awaited federal recognition with President Obama's signing of the Small Business Efficiency Act.  This law, among other things, provides for IRS certification of eligible PEOs, thereby validating the industry and giving its customers new confidence in the PEO relationship.  It is curious, however, that many business owners are unaware of or misunderstand this valuable resource.  In this article, we will take a quick look at the way PEOs operate, the services they offer and their potential benefits.  In later articles we will examine the principle terms of the client service agreements used by PEOs, the details of the Small Business Efficiency Act, and other topics of concern to PEOs and their clients.