What is a PEO?

Today, many businesses find they need help managing increasingly complex employee related matters such as health benefits, workers’ compensation claims, payroll, payroll tax compliance, and unemployment insurance claims.

Professional Employer Organizations (PEOs) assume these responsibilities, allowing PEO clients to focus on their core competencies to maintain and grow their bottom line.

A PEO delivers these services by establishing and maintaining a co-employer relationship with the employees at the client’s worksite and by contractually assuming certain employer rights, responsibilities, and risk.

PEOs’ expanded human resource services and employee benefits provide high value and cost-efficient outsourcing options for businesses in many different industries.


In a co-employment relationship, the client company continues to direct their employees’ day-to-day duties and responsibilities.

However, the PEO contractually assumes certain rights, responsibilities and risks, and is the employer of record on an employee’s W-2. As such, the PEO delivers and manages employee benefits, payroll processing and tax administration, workers’ compensation, state unemployment insurance, and EEOC claims as well as other services.

Professional employer organizations enable clients to cost-effectively outsource the management of human resources, freeing them up to focus on growing their businesses.

PEO Industry Information

  • PEOs have been in existence for about 30 years.
  • About 700 PEOs are servicing businesses in all 50 states.
  • Forty percent of businesses that use PEOs upgrade their benefit packages as a result.
  • PEOs help tens of thousands of companies provide benefits such as health care plans, 401(k) tax-free savings accounts and other perks to working Americans.

Information provided by National Association of Professional Employer Organizations (NAPEO). Please visit their website, www.napeo.org to learn more.

SBA Reports

  • Between 1980 and 2000, the number of labor laws and regulations grew by nearly two-thirds, according to the Small Business Administration.
  • Owners of small or mid-sized business spent up to a quarter of their time on employment-related paperwork.
  • Average cost of government paperwork and tax compliance for small businesses with less than 500 employees: $5,000 per employee, per year.
  • Businesses with fewer than 20 employees pay 60% higher compliance costs – $6,795 per employee, per year.

FAQs about PEOs

Why Switch to a PEO?

Since a PEO can aggregate a number of small clients into a larger pool, the PEO is able to create economies of scale. The PEO then passes these advantages on to its clients who probably could not otherwise enjoy the benefits that a PEO can offer, for example, having access to world-class benefits and retirement programs. Offering these benefits allows you to compete with larger employers in attracting the best and brightest in an increasingly tight pool of talented workers.

How does Regis work with its clients in containing or reducing employer-related costs and improving profitability?

We view it as our duty to always find new ways of reducing employment related expenses thereby adding profitability to our clients’ businesses. The more ways we find to do this, the more you save and the more you profit.

How do my employees benefit from a relationship with Regis HRG?

Studies have shown that employee productivity increases when they are provided with professional human resources services, training, employee manuals, sound safety programs, and better communication.

Through our co-employment relationship we are able to offer your employees a comprehensive Health & Welfare Program including flexible spending accounts, a section 125 cafeteria plan that allows their benefits contributions to be deducted on a pre-tax basis, quality retirement plans such as a 401(k), life insurance, disability insurance, discount programs, and many more.

How do I choose the right PEO or is one right for my business?

At Regis we realize that we may not be the right choice for every business. To ensure that we have a mutually beneficial relationship with all of our clients, we do our homework and we encourage our prospects to do the same. We firmly believe in always steering you in the right direction, whether or not you become a client.

Perhaps the best place to start your research is at the National Association of Professional Employer Organizations (NAPEO). NAPEO has set forth some guidelines that all prospects should consider.