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What should I look for when comparing PEO providers?

When selecting a Professional Employer Organization, evaluate the provider's financial stability, credentials, longevity, compliance expertise, service model, and technology. Key factors to consider include:

• IRS Certification and ESAC Accreditation: A certified PEO (CPEO) has met rigorous IRS financial and reporting requirements, providing clients with specific tax benefits and financial protections. An ESAC-accredited PEO is the gold standard for PEO reliability and financial assurance. ADP TotalSource is an IRS-certified and ESAC-Accredited PEO.
• Dedicated HR Support: Service models vary widely. Some PEOs rely on general call centers, while others provide dedicated specialists. ADP TotalSource assigns each client a credentialed HR Business Partner (HRBP) for ongoing strategic support.
• Comprehensive Benefits Offering: Evaluate the breadth and quality of the benefits package, including healthcare, retirement plans, and ancillary benefits for the states where you have employees. A strong PEO should provide access to competitive benefits with expert guidance on plan selection and administration. It should also offer you multiple plan choices in each state.
• Scalable Technology: Look for an intuitive platform that integrates HR, payroll, benefits, and time tracking in one system. ADP TotalSource provides an all-in-one platform with employee self-service and a top-rated mobile app.
Multi-State Coverage: If you have or plan to hire remote employees, confirm the PEO provides compliance and full benefits support in all states where you operate. ADP TotalSource offers full coverage across all 50 U.S. states.

Can a PEO support my business compliance across multiple states?

Yes, ADP TotalSource provides comprehensive HR, payroll, and tax compliance support across all 50 U.S. states. This is critical for businesses that operate in or employ people in multiple states. Our compliance experts help you manage:

• State-Specific Labor Laws: We proactively monitor and help you adapt to changing local, state, and federal employment regulations.
• Payroll Tax Filings: ADP handles multi-state employment tax calculations on your behalf.
• Risk and Safety: We provide workers' compensation insurance coverage and claims management regardless of where your employees reside.

Will my employees notice a difference when we partner with a PEO?

Yes, your employees will likely notice a positive upgrade in their overall experience. While you continue to manage day‑to-day responsibilities like hiring, scheduling, and setting pay, ADP TotalSource works with you to help elevate the employee experience through:

• Better Benefits: Employees gain access to high-quality health insurance, retirement plans, and exclusive corporate perks.
• User-Friendly Technology: Employees can easily access pay stubs, manage benefits, and request time off through the top-rated ADP mobile app and self-service portals.
• Faster Support: Employees get quick, accurate answers to their HR and benefits questions through our dedicated and award winning MyLife Advisors.
• Improved Onboarding Experience: New hires experience a smoother, more professional onboarding process with digital paperwork, automated workflows, and clear guidance from day one.

What is co-employment? How does co-employment work?

Co-employment is a shared employment arrangement between a business and a PEO, each with defined responsibilities. You retain control of day-to-day operations, hiring decisions and employee management, while the PEO handles administrative HR functions like payroll, benefits and compliance. This structure gives small and midsized businesses access to competitive benefits, workers' compensation and talent support, plus HR expertise, all in one place, without you giving up control of your workforce. Co-employment falls under HR outsourcing, but it is not the same as an employer of record (EOR). 

Does a PEO take over hiring, firing or managing my employees?

No. A PEO doesn't make hiring, firing, scheduling or pay decisions for your business, and it doesn't change how you run day-to-day operations or shape your company culture. Those decisions stay completely with you, while the PEO takes on the administrative HR workload behind the scenes.

What's the difference between a PEO and an Employer of Record (EOR)?

PEOs and EORs both help manage HR and payroll, but they're built for different situations. A PEO like ADP’s partners with your business through co-employment, where you retain control of day-to-day operations and employee decisions, while the PEO shares responsibility for payroll, benefits and workers' compensation, plus HR compliance guidance. This suits U.S. businesses that want to scale HR support as they grow. An EOR becomes the legal employer of your workers, typically in countries where you lack a legal entity, handling contracts, payroll, taxes and local compliance. EORs support international employment, whereas PEOs support U.S. employees.

What's the difference between a PEO and an ASO?

An ASO offers many of the same administrative HR services as a PEO — payroll, benefits support, compliance guidance — but without the shared-employer relationship. That means an ASO typically can't provide the same access to large-group benefits plans or take on the same employment-related liability that comes with a PEO's co-employment model.

What's the difference between a PEO and hiring an in-house HR team?

Think of a PEO as instant infrastructure for your organization. Partnering with ADP’s PEO gives you access to a full team of experts across HR disciplines, best-in-class technology, proven processes, compliance monitoring, benefit plan design, and payroll processing and tax filing. You could hire for all of that in-house, but it would come at a much higher cost. With ADP’s PEO, the people, processes and technology work together as infrastructure personalized for your business.

What's the difference between a PEO and payroll software?

Payroll software handles the mechanics of paying your employees, but it doesn't manage benefits administration, compliance guidance, HR support or workers' comp the way a PEO does. A PEO includes payroll as part of a broader, service-backed HR solution.

What happens to my employees' benefits if I leave a PEO?

When you leave a PEO, your business becomes solely responsible for setting up and administering its own benefits plans, so you'll need to secure new coverage through another provider. It's worth planning that transition with your HR team or new provider ahead of time to avoid a coverage gap for your employees.

Is a PEO a good fit for my business size?

Depending on your size, chances are a PEO is a good fit for your business. ADP’s PEO supports businesses with as few as five employees and as many as 1,000+. A PEO’s value increases at the point where HR, benefits and compliance begin to grow in complexity.