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Professional Employer Organisation

What is a Professional Employer Organisation?

A Professional Employer Organisation (PEO), also known as an Employer Services Provider (ESP), is a company or organisation that provides comprehensive human resources and employment-related services to other businesses. A PEO essentially becomes a co-employer with the client company's employees, sharing certain employer responsibilities and liabilities.

While there are several similarities between a ‘Professional Employer Organisation’ and an ‘Employer of Record’, there are also a few distinctions between them. These terms are sometimes used interchangeably, but it’s important to know how they differ from one another.

How is a PEO different from an EOR?

Unlike an Employer of Record (EOR), which does not handle many conventional HR-related responsibilities, such as tracking employee time, establishing a company directory, or developing an employee handbook, a PEO can and may do all of these as well as the other general payroll, tax filing and legal compliance responsibilities that an EOR typically handles.

A PEO may take ownership of payroll administration, including payroll processing, tax withholdings, and reporting; benefits administration, such as health insurance and retirement planning; full employee onboarding (rather than just specifically when it comes to their employment, contract and tax related information) and employment-related risk management in compliance with employment laws and regulations; and other HR-related paperwork.

When should I opt to work with an EOR?

If you don’t already have a physical presence or entity in a given country where you choose to hire or operate, working with a PEO is not a good fit.

While a PEO can help supervise your company's employment-related tasks in other countries, you still need to have a legal entity or ‘satellite’ location there. The specifics will vary based on the country's regulations and the nature of your business.

When working with an EOR, on the other hand, you don’t need to have a physical entity where you are hiring employees. The EOR has a local entity, which is the legal local employer for your workers.

What companies hire PEOs?

PEOs are often a great fit for small- to medium-sized businesses that may not be able to afford a full-time human resources team member.

Likewise, medium- and large-sized businesses may want to partner with a PEO to separate some tasks typically overseen by an HR department. For example, they may want their in-house HR team to focus on recruitment and interviewing while their PEO manages the day-to-day HR matters.

Is Boundless a Professional Employer Organisation?

Boundless is an Employer of Record (EOR), but not a Professional Employer Organisation. While we do not specialise in assisting businesses with human resource-related issues or responsibilities, we do work with them to ensure they remain legally compliant when hiring employees from abroad, which includes some HR-related functions. We provide compliant employment agreements and other documents, advice on statutory benefits, register employees for those benefits as well as non-statutory ones such as health insurance and pension, where applicable, and insist on being informed about and kept in the loop in case of terminations.

When working with an EOR like Boundless, you don't need a physical entity or HR team everywhere you employ workers. Instead, Boundless takes care of all local employment concerns, including employment contracts and any other relevant documents, payroll, taxes, statutory benefits and rights, flexible benefit stipends and, in some places, health insurance and pension.

If you’re looking for talent across borders and need to be sure you’re following local regulations, the team at Boundless can help. Get in touch with us to schedule a free consultation with one of our experts.

The making available of information to you on this site by Boundless shall not create a legal, confidential or other relationship between you and Boundless and does not constitute the provision of legal, tax, commercial or other professional advice by Boundless. You acknowledge and agree that any information on this site has not been prepared with your specific circumstances in mind, may not be suitable for use in your business, and does not constitute advice intended for reliance. You assume all risk and liability that may result from any such reliance on the information and you should seek independent advice from a lawyer or tax professional in the relevant jurisdiction(s) before doing so.

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