SUTA dumping is fraudulent arbitrage of State Unemployment Tax where fraud-y PEOs put employees from high insurance rate companies into a new entity with a low insurance rate and pocketed the difference. This was made illegal by the SUTA Dumping Protection Act of 2004 which is why you typically get asked questions when signing up for payroll whether or not you are trying to do this.
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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.