Professional Employer Organization (PEO) / Employer of Record (EOR)
Updated: Jan 16
What are PEOs?
PEO is a professional company that specializes in providing customers with various human resource services, including salary, benefits (through a pre-negotiated benefit plan with insurance companies), worker compensation and human resource compliance. In addition, PEO has established legal entities, company IDs and salary registrations in various jurisdictions around the world, thereby eliminating common tax and legal barriers. To this end, the client must sign a specific joint employment agreement with the PEO so that the PEO becomes the employer of record in the applicable country.
What are typical PEO services?
PEO's service and product levels have been improved to meet the market's demand for more robust and technologically advanced solutions. The following services are always included in "off the shelf" or standard contracts; some PEOs may charge additional fees to support specific HR processes, such as recruitment, selection and enhanced talent management (e.g., job posting, salary and position benchmark analysis, applicant tracking solutions).
Typical Services Provided by PEOs
- HRIS and HR Data Management
- Payroll & Tax Registration and Administration
- Time and Attendance Tracking and Administration
- Health & Welfare, Retirement Plans and Administration
- Leave Administration
- Workers' Compensation
- Employment Insurance
- Employee Onboarding
- HR Policy and Compliance Documentation
- Workplace Safety Guidance
- Employee Help Line
- Online Portal and Mobile App
- Employee Relations
PEO requires companies to establish a "co-employment" relationship. According to the terms of this agreement, the customer’s employees are jointly employed by PEO, and PEO assumes certain responsibilities for the customer’s employment rights and risks, such as issuing income tax forms under its employer identification number, and collecting, depositing and reporting pension to local jurisdictions. The client organization still retains daily management responsibilities, including daily business operation management, budget setting, employee performance management, etc.
Cost for services
The fee structure may vary depending on the PEO and the scope of services, from the standard per employee per month (PEPM) to a certain percentage of the total compensation. Generally, the cost of running a PEO model may be a percentage of the total salary of all employees, and the additional module may be an additional cost of PEPM. Customers can choose to pay for additional non-standard PEO service fees, or they can choose other methods to bridge the service gap with other third-party suppliers and/or internal resources, especially for strategic HR insights, changes and communication support performance management and customized welfare solutions.
Bestar is an Employer of Record. We help companies expand internationally to Asia without the hassle of setting up overseas branches and subsidiaries. Through our platform, companies can quickly and easily hire international employees without having to deal with complicated domestic legal, tax and human resource issues. Whether testing new markets or expanding the talent pool globally, Bestar is the most trusted workforce management solution in the market. We took the burden and risk of global expansion off the shoulders of our customers and placed them on our shoulders.
We can provide compliant labor management solutions during mergers or acquisitions, and help portfolio companies quickly gain international market share with minimal costs. In particular, Bestar helps equalize wages and benefits when workforce must be transferred from sellers to buyers under a carve out, thereby potentially eliminating the need for TSA.
Bestar was established in 2010 and is the industry's leading global expansion solution. The company emphasizes compliance with legal business entities recognized in many countries/regions in all aspects.
Bestar is committed to helping companies hire employees in countries where there is currently no recognized business entity or infrastructure. Our role is to provide a risk-free, compliant alternative to hiring employees without the need to establish an entity or hire independent contractors. Our legal structure is that we assume 100% of the employer’s management responsibility, and you have 100% guidance and control over the employees. Our solution is simple, fast, risk-free and cost-effective.
If you would like to know more, please contact Bestar.