What’s The Difference Between Employer of Record vs. PEO?

December 15, 2022

Employer of Record and Professional Employer Organization are both organizations that can be helpful for small businesses looking to expand and/or outsource. But what exactly do these companies do? And what’s the difference between them? Read on to learn more about Employer of Record vs. PEO.

What’s an Employer of Record?

An Employer of Record (EoR) is a company that acts as the legal employer of your employees. This company will usually handle some of the administrative work for your business. They will also usually handle contracts and HR matters for your employees. However, your business will still be in charge of daily operations, practices, and overall company culture.

What’s a Professional Employer Organization?

A Professional Employer Organization (PEO) is a company that works with you to provide HR benefits to your employees. PEOs will handle HR for various companies at once, which means you might get better insurance rates and/or plans when working with a PEO.

Employer of Record Vs. PEO

It can be hard to tell the difference between an Employer of Record vs. PEO, since they are both external companies that can provide you with HR services. The key difference is that an EoR acts essentially as a stand-in for your company, whereas a PEO is essentially your co-employer. This means that the PEO will share liabilities with you, while an EoR is meant to cover your risks. PEOs are also usually a more present force within your company, whereas EoRs will not play a large role in the daily lives of your employees.

Start With a Consultation

Both EoRs and PEOs are good options for those who want to outsource their HR services. However, one might be better for your company than the other. A consultation will help you choose what’s right for your business needs. Your consultant can also give you helpful tips for creating the best HR practices for your company’s future.

We Can Handle All of Your HR Needs

Whether you’re looking for an EoR or a PEO, Elevation HR is here to help. Our caring, dedicated HR professionals can help you manage your company effectively. Ready to learn more? Click the link above to contact our team today!

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