![]() Recently, courts in the Eleventh Circuit, including the Eleventh Circuit appellate court itself, have faced this issue. One question that continually arises is whether the PEO or the client company is the employer of the client company’s employees for federal employment tax purposes. The provision of employment tax services by PEOs inevitably has led to interpretation disputes between PEOs and the IRS. Offering better benefits, in turn, helps PEOs’ client companies attract and retain talent, something that is especially important in today’s business environment. Beyond that, the typical PEO client also gains access to employee benefits that may have been unavailable otherwise based on the client’s size. 2 In addition to the time gained by outsourcing the administrative burdens of payroll processing, human resources administration, and employment tax compliance, PEOs tout cost savings on benefits, workers’ compensation, and unemployment insurance as an additional benefit of PEO use. ![]() 1 PEOs are attractive to small and mid-sized businesses, in part, because a PEO-client relationship allows each party to focus on its area of expertise: business owners focus on running their businesses, while PEOs handle the administrative side of things. ![]() In the United States today, there are 487 professional employer organizations (PEOs) that provide human resources, payroll, and employment tax services to approximately 173,000 small and mid-sized businesses employing nearly four million worksite employees. ![]()
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