PEOs Are Not Staffing Companies.

It is a common misconception that PEOs are identical to staffing companies.

Staffing companies offer their own employees to their clients, on a temporary or temp to perm arrangement, for a specific job function.

Staffing Agencies
PEOs, by nature of the co-employment agreement, are the employer of record for Admin and Payroll Tax for their clients’ employees. The client retains complete control of the employees’ work, schedule and pay. The PEO plays no role in the activities of the client’s employee. And the co-employment agreement stipulates that the PEO is the employer for Admin and Payroll only.


By virtue of temporary placement, staffing companies take on a disproportionate risk for both Workers’ Compensation and General Liability Insurance. Injuries to their employees at the client’s work site does affect their Work Comp rates and also their NCCI Experience Modifier, which beyond a certain point makes Work Comp cost prohibitive.

PEO Staffing Company Solutions

Staffing companies can capitalize on the PEO’s sheer strength of numbers and secure Work Comp utilizing the PEO’s NCCI Modifier. This also allows them to satisfy Affordable Care Act requirements and offer health benefits to their employees at reduced rates. And, with the quasi -outsourcing similarities, PEOs can also offer Staffing Companies tremendous value added assistance to secure General Liability and other lines of business insurance.

To learn more about how a PEO can help your business, call 832-434-1406 or email