If you work in human resources in the United States, chances are you’ve heard the term “PEO” or “Professional Employer Organization,”, but did you know there are different kinds of PEO?
The two types of PEO offer slightly different services to employers. But, the end goal is to make your human resources (HR) management easier and cheaper. Whether you want to outsource your company’s HR management for your employees in the U.S., or you want to hire internationally in new markets, the PEO model may be the most cost-effective and timesaving option for you.
Domestic Professional Employer Organization or Co-employment
A unique concept to the United States, domestic PEOs operate under a co-employment model. Using the services of a domestic PEO, employers outsource many HR management tasks, including benefits, payroll, workers’ compensation, recruiting risk and safety management, training, and development.
This model is sometimes referred to as “employee leasing,”. The employer retains day-to-day control over how they manage their employees, while their provider, or PEO, handles HR management, benefits administration, etc.
International Professional Employer Organization (PEO)
A newer concept, but one not specific to U.S. employers, is the International PEO. Using this solution, companies can hire employees in other countries without having to establish a foreign corporate entity. The benefits of this approach are:
As your employees’ employer of record, the International PEO informs you of and manages monthly withholdings, from income tax to employer social security contributions, drafts local employment contracts, and much more. International PEO can take care of supplemental insurance and work permits as well.
Like under the domestic PEO, the client maintains the day-to-day management of each employee; international PEO ensures that employment relationship is compliant and the company can leave the target country easily if needed.
Velocity Global is the leading provider of International PEO, contact us today if you would like to learn more about your options for international expansion.