ASO vs PEO

Administration Service Organization (ASO)

Client wages are reported under the client’s Federal Employer Identification Number (FEIN). Unlike a PEO, there is no co-employment when using our ASO services.

For those of you who do not feel comfortable with the co-employment relationship, we offer ASO services. You may select from a wide range of services that can be tailored to your needs. An ASO is functionally the same as a PEO, but internally there is no shared status and no co-employment relationship. The employees remains100% yours.

We prepare Payroll, submit Federal, State, and Local tax, Benefit Auditing and Payment Remittance, Workers’ Compensation Reporting, Payment and audits, Union reporting and Certified Payrolls.


Professional Employer Organization (PEO)

Client wages are reported under the PEO’s Federal Employer Identification Number (FEIN)

Talent HR Solutions as a PEO enables you to increase your bottom line by shifting some of the responsibilities to us, thus lowering your employment cost.

  • Reduce costs related to compliance with employment laws and often costs of failure to comply with such laws.
  • Time savings by having the PEO handle routine and redundant task.

In a PEO arrangement, a co-employment relationship is created whereby you retain ownership of your company and control over your operations. As co-employers, we both contractually share or allocate employer responsibilities and liabilities. We both have a common-law relationship with the worksite employees. Talent HR Solutions is the “Employer of Record” and retains a right to hire, reassign and discharge the employees. We offer assistance in matters involving human resource management and compliance with employment laws; as a client you direct and control worksite employees in manufacturing, production, and delivery of your products and services.

ASO vs PEO

How do they differ?

Which is best for my firm?

Small and growing businesses in Hawaii often find themselves in a position where they need assistance managing their employment and administrative functions. PEOs (Professional Employer Organizations) and ASOs (Administrative Service Organizations) are available to fill these needs. But in order to forge a relationship with a PEO or an ASO, a company needs to understand the differences between these types of organizations. What are their strengths? What are their weaknesses? The differences will ultimately affect your business, and making the right decision is crucial.

 An ASO is a kind of middleman for administrative services for your company. The ASO you contract with will handle payroll and tax filing for your company, and the paperwork is filed under your federal employer’s identification number. Questions about regulatory compliance will be handled by the ASO you choose. An ASO can offer you assistance with legal questions or matters relating to regulatory compliance but these remain, fundamentally, the client company’s responsibility. The ASO will handle day-to-day administrative matters relating to human resources: all staffing matters and the corollary issues are bundled services in a contract with an ASO. But basically, the ultimate responsibility for insurance coverage, regulatory matters, and safety management remain in the hands of the client company. Many companies find this preferable because they retain control and can still be very hands-on without having to handle mundane details on a daily basis.

A PEO offers more comprehensive, all-encompassing services to your company. A PEO really takes over every aspect of staffing for your company. All legal responsibility for staffing (handling HR paperwork, tax paperwork, workers compensation matters) is handled by the PEO; in addition, employee benefits, health insurance plans, and regulatory compliance is handled by the PEO. In general, a traditional PEO contract means that all of these benefits are handled by the PEO, under the PEO’s name; the client company is not involved with these matters (though a 401K policy may be offered in the client company’s name). Basically, the PEO takes on all the challenges of administrative functions in addition to the responsibility for the correct implementation of these functions. This requires a high level of trust between the client company and the PEO. For a company that prefers to focus solely on its business operations and does not want to be at all distracted by administrative matters, the PEO is the preferred choice. Some PEOs offer packages in which certain individual functions can be selected and others rejected; for example, the client company can choose to handle health benefit packages for their staff but leave all other matters to the PEO. Overall, however, companies seeking PEO services are happy to let the PEO do everything it can to make the client’s job easier.

Deciding whether to go with a PEO or an ASO is a complex process. No two companies are going to have precisely the same needs. Talent HR Solutions is uniquely qualified to identify which system and which services your company needs most. Talent HR Solutions stays on top of changes in legislation that affect matters like worker’s compensation, for example. The ramifications of legislation, price fluctuations, and market factors are all taken into account when Talent HR works with you to determine what services you need.

To establish your needs and figure out how best to meet them, contact www.talenthrsolutions.com. We can answer your questions about ASOs, PEOs, and their respective value to your company. Talent HR Solutions will help you reduce costs in the areas of payroll, worker’s compensation, medical premiums and labor cost in Honolulu, Hawaii.

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