A PEO (Professional Employer Organization) is a “co-employer” relationship that allows a company to outsource the management of human resource functions such as, payroll, employee benefits, unemployment, and worker's compensation. By legally hiring the company's employees, the PEO becomes the employer of record for the purposes of taxation and insurance. The employees are then “leased” back to the company. The company continues to control the selection and management of employees, but the PEO assumes responsibility for payroll obligations and tax filings. Essentially the employee has two employers: one to manage their service or production and another to manage their payroll and benefits.