How PEOs Help Small Businesses

Home/How PEOs Help Small Businesses


The Florida Association of Professional Employer Organizations is comprised of organizations which provide integrated, cost effective solutions for the management and administration of human resources for its clients by contractually assuming employer rights, responsibilities, and risk, and by establishing and maintaining an employer relationship with the workers assigned to client companies.

The PEO –

  • Reserves a right of direction and control of the employees and may share such responsibility with the client, consistent with the client’s responsibility for its product or service
  • Pays wages and employment taxes of the employees
  • Reports, collects, and deposits employment taxes with state and federal authorities
  • Establishes and maintains an employment relationship with its employees that is intended to be long term and not temporary
  • Retains a right to hire, reassign, and fire the employees

The Florida Association of Professional Employer Organizations (FAPEO) surveyed to determine the size of the PEO industry. PEOs employ more than 700,000 employees, serve over 50,000 companies, and pay $24 billion in payroll, making the PEO industry one of the largest employers in the state of Florida.

PEOs develop lasting relationships with their clients. Due to strong client satisfaction, PEOs enjoy a nearly 86 percent client retention rate.
PEO Industry Statistics

Work-site Employees Businesses Served Total $ of Payroll
768,343 56,096 $24,270,370,320

(Source: Florida Association of Professional Employer Organizations 2009 Industry Census)

How Do PEOs Benefit Employers, Employees & Government?

Benefits to Employers

  • Controls costs
  • Saves time and paperwork hassles
  • Provides professional compliance (e.g., payroll, IRCA, EEOC)
  • Reduces turnover and attracts better employees
  • Provides claims management (e.g., workers’ compensation, unemployment insurance)
  • Provides better benefits packages
  • Provides professional human resource services (e.g., employee handbooks, forms, policies and procedures)
  • Reduces accounting costs

Benefits to Employees

  • Comprehensive benefits previously unavailable
  • Better employer/employee communications
  • Payroll on-time and accurate
  • Professional assistance with employment-related problems
  • Professional orientation and employee handbook
  • Up-to-date information on labor regulations and workers’ rights, worksite safety
  • Efficient and responsive claims processing
  • Portable benefits (employees can move from one PEO client to another without loss of eligibility for benefits)

Benefits to Government

  • Consolidates several small companies’ employment tax filings into one
  • More professional preparation and reporting
  • Accelerated collection of taxes
  • Extends medical benefits to more workers
  • Expands the communication of government requirements and changes to small businesses
  • Resolves many problems before they reach court
  • Allows government agencies to reach business through a single-employer entity