Employee Leasing Models

There are several terms in the employee leasing jargon that defines various business models in employee leasing. The main distinction among these models is the level of services carved out under the service agreement between the employee leasing company and the client company. Below is a description of the most commonly used terms for such distinction in services:

PEO services, also referred to as services of professional employer organization: This service is referred to as employee leasing services. The National Association of Employee Leasing Companies doesn’t make a distinction between a PEO and an Employee Leasing Service. Distinctions made by other organizations are suppersilous and cannote a difference in the length of a relationship that can’t be determined at the onset of the relationship and are subject to change anyways.

Under a true employee leasing relationship, the employee leasing service remains the employer of record for the employees of the client.

In an ASO relationship, the employee leasing service steps in and performs the services that would otherwise be performed by the client company.

In an HRO relationship, the employee leasing service performs the HR functions of the client company and the client company continues to perform its other services.