The term “ASO” stands for Administrative Services Organization. The most important difference between an ASO and a PEO is that the service provided through an ASO does not establish a co-employer relationship with the employees. Much like a PEO, an ASO oversees the day-to-day administrative aspects of managing a company’s human resource functions.

While an ASO does not sponsor employee benefit programs or workers compensation coverage, the ASO is generally active in arranging coverage and assisting the client in securing coverage. The client company remains the sole sponsor when working with an ASO. 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. 

An ASO will handle your company’s payroll and tax filing, the paperwork is filed under your federal employer’s identification number. An ASO can also offer assistance with legal questions on compliance although it remains the client company’s responsibility to act on these issues.