FAQ - Major differences between PEO AND ASO.
What are the differences between Payroll USA, Inc. as a PEO and Payroll USA II, Inc. as an ASO?
PEO is an acronym for "Professional Employer Organization" and ASO is an acronym for "Administrative Service Organization".
PEO Services and Employee Leasing Basics
- Payroll USA as a Professional Employer Organization (PEO) contractually allocates and shares traditional employer responsibilities and liabilities. Payroll USA, Inc. assumes responsibility and liability for the "business of employment," which includes risk management, human resources, improved labor compliance, payroll and employment taxes, and benefits.
- Payroll USA, Inc. as a PEO acts as a co-employer. Payroll USA, Inc. undertakes certain employer obligations, and for many purposes is the employer of your worksite employees.
- Payroll USA, Inc. as employer, is responsible for the payment of wages and employment taxes. All payroll taxes are filed under Payroll USA, Inc's federal employer identification number.
- All wages are paid through Payroll USA, Inc's bank account.
- We secure worker's compensation coverage as the employer of your worksite employees. Payroll USA, Inc. manages all workmen's comp claims.
- Payroll USA, Inc is the employer for state unemployment tax purposes in most states.
- Payroll USA, Inc. is subject to compliance with state and federal employment discrimination laws as well as hourly laws.
- As client you retain the responsibility for the management of employee production, business operations, marketing, sales and service. You have control over all business operations and the work that your employees perform; you "run the show".
ASO Services and Payroll Processing Basics
- Payroll USA II, Inc., as an Administrative Service Organization (ASO) through a Client Service Agreement, is your payroll processing agent.
- The major distinction between a PEO vs ASO, under an ASO arrangement, there is no employment relationship between Payroll USA II, Inc. and your employees.
- Payroll USA II, Inc. is not the employer of record; therefore all payroll taxes are filed using your federal employer identification number.
- All wages are paid through your bank account.
- Worker's compensation coverage is provided under your policy.
- You are subject to compliance with state and federal employment discrimination laws as well as hourly laws.
- Payroll USA II, Inc. provides various services " a la carte".
Facts: Payroll USA II, Inc. is not the "Employer of Record". We are your payroll processing company. This is the "traditional method" of processing payroll.
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