OhioBWC - Employer - Service:  (Professional employer organizations (PEOs))

Professional employer organizations (PEOs)

PEOs provide services to client employers such as: human resources management; employee benefits; payroll; and workers' compensation. This allows PEO clients to focus on their core services to maintain and grow their bottom lines. The PEO clients contract with PEOs to assume these other responsibilities and provide expertise in human resources management. A PEO:

  • Provides integrated services to manage critical human resource responsibilities and employer risks;
  • Establishes and maintains an employer relationship with the employees at the client's work site (share employees);
  • Contractually assumes certain employer rights, responsibilities and risk.

PEOs are co-employers
The PEO relationship involves a contractual allocation and sharing of employer responsibilities between the PEO and the client. This shared employment relationship is called co-employment. As co-employers, PEOs contractually assume substantial employer rights, responsibilities and risk through their employer relationships with their clients' workers.

For workers’ compensation purposes, PEOs assume the responsibility of reporting payroll, claims and paying premium for the entire client work force (shared employees) or a portion of the client work force and are recognized as the employer of record.

The PEO Industry in Ohio is governed by Ohio Revised Code 4125.01, which is effective on Nov. 5, 2004. For more information about the PEO industry; laws and rules; guidelines; or forms, click on the appropriate link below.