The Professional Employer Organization Concept (PEO)
Also referred to as Employee Leasing, the PEO concept is based on the PEO processing your payroll under their Federal Employer Identification Number (FEIN). By doing this, the PEO is recognized by the IRS, workers' compensation carriers and benefits providers, as the, liable, employer of record, or offsite administrative employer, for these administrative functions and benefits.
This "shared employer" relationship, not only benefits a business owner by allowing you to transfer the responsibility of all these functions to just one company, it allows you to transfer the liability as well. The employer maintains the responsibility and liability for the onsite, face-to-face functions; hiring/firing, policy & procedure, supervision and overall direction and control of your business, which is the revenue side of the business.
An employee is a business's greatest asset as well as its greatest liability. A PEO, like Consolidated Personnel Services, allows you to keep the asset while transferring much of the liability.