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Companies that do not want to be burdened with all the personnel and human resources work that comes with employing workers will often turn to employment service companies such as professional employer organizations and employee leasing companies. Professional employer organizations, or PEOs, are companies that are contracted by other companies to handle many human resource and employee-related matters. PEOs usually handle their clients' payroll matters, workers compensation matters, human resources work and employee benefit matters. Workers for companies that contract with PEOs are actually employed by the company, not by the PEO. This is not the case when it comes to employee leasing companies. Employee leasing companies specialize in employing workers that they lease out to other companies. Although leased employees do work for the companies that lease them, all their personnel matters, including health benefits, workers' compensation claims, payroll, payroll tax compliance and unemployment insurance claims, are handled by the employee leasing company because the employee leasing company actually employs them.
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