The PEO relationship involves a contractual allocation and sharing of employer responsibilities between the PEO and the client. This shared employment relationship is called co-employment. As co-employers, PEOs contractually assume substantial employer rights, responsibilities and risk through their employer relationships with their clients' workers.
For workers’ compensation purposes, PEOs assume the responsibility of reporting payroll, claims and paying premium for the entire client work force (shared employees) or a portion of the client work force, and are recognized as the employer of record.
A PEO that wants to report payroll and make payments online under the client employer’s policy must become an authorized representative for the client employer. For additional information about this process, see the Overview of the AC-2 Process.
For information about the prospective billing reporting and payment responsibilities for both a PEO and client employer see the Prospective Billing Overview .
The below links will assist a PEO in maintaining its client policies: