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What's the difference between PEO ad employer of record?


Nick Ganzha
Title: CEO, founder
Company: Acumen International
(CEO, founder, Acumen International) |

Pablo, let me answer here, if it's not a bit belated for now:

In US PEOs (Professional Employer Organizations) are companies that generally provide services such as: human resource consulting, safety and risk mitigation, payroll processing, employer payroll tax filing, workers' compensation insurance, providing workforce management technologies, etc.

A PEO service in the USA is a form of co-employment, meaning such a company enters a contractual co-employment agreement with its client. While a PEO co-employs your company’s workforce, you (the client) as a factual employer ultimately have partial legal liability for employer responsibilities, e.g. reporting unemployment claims. A PEO company in this case shares with you your risks as an employer. It can ensure that you're on a safe legal ground when you terminate an employee, for example, or deal with employee lawsuits. But generally you act as a legal employer for your employees.

For a Global PEO that appeared as an expansion of this concept to apply to an international workforce, instead, the employer has no legal bond with the employees: the third-party PEO provider acts as a legal employer on behalf of the (f)actual employer. However, this actual employer (the client) preserves a full control over their global workforce.

An EOR (Employer of Record) service can take place both domestically and internationally. If the employer has no legal ties to the employees, it counts.

As for Global EOR or GEOR, you can use this term interchangeably with a Global PEO. They both describe the same processes with regards to international workforce onboarding, compensation, and termination if necessary, as mentioned above.

Varun Jain
Title: Founder
Company: Miles Education
(Founder, Miles Education) |

Well written, Nick Ganzha!


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