PEO Was Made Up to Dress Up the Image of Employee-Leasing

Employee leasing was started in the 1960s and is a predecessor to professional employer organizations (PEO). It was used to exploit loopholes in the US tax system. The idea evolved from staffing agencies to include HR and worker safety services until someone coined the phrase PEO to sound more like HMO and clean up the image of employee leasing.

Their image was further cleaned up by the SUTA Dumping Protection Act of 2004 which prevented SUTA dumping.

See also:

• Employer of record
• Back office

Links to this note

• Peos Kick You off If One Employee Overutilizes Insurance

  A business can get kicked off of their PEO or unable to use a PEO if even a single employee “overutilizes” insurance benefits. When it comes to health insurance this can mean one person has a severe illness or medical condition.