The PEO model and compliance duties

12 April 2022
2 minutes
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How employment, payroll and compliance responsibilities are split under a PEO arrangement, and what stays with the hirer.

The division in one line

The PEO is the employer. The hirer directs the work. Everything else follows from those two facts.

Writing it down matters more than it sounds: most difficulties in this model come from a duty nobody explicitly owned.

What the PEO owns

The employment contract and the statutory rights that come with it.
Payroll, PAYE, National Insurance and RTI submissions.
Auto-enrolment and pension contributions.
Employer’s liability, public liability and personal accident cover.
Holiday, sick pay and parental leave administration.

What the hirer keeps

Day-to-day direction of the work, health and safety on site, and the commercial terms of the assignment. The hirer also meets the employment costs — that is the defining difference from an umbrella arrangement.

Why the split is worth the paperwork

It puts the compliance duties with the party equipped to carry them, and leaves the hirer with the part it is actually best placed to manage: the work itself.

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Frequently asked questions

The questions hiring firms and contractors ask most often about this subject.

Craig Moss

leads an exciting management role at Promultis

Craig Moss is a seasoned professional in the employment and recruitment industries, based in Kings Langley, UK. With over 30 years of experience, including a successful tenure as a central London realtor handling properties up to £3 million, he now leads an exciting management role at Promultis. Specialising in compliant payroll solutions for contract recruitment, Craig helps clients increase margins by up to 30% while navigating complex legislation. His people-focused approach, honed through decades in sales and people management, ensures both recruiters and workers benefit from tax-efficient, compliant solutions. Passionate about building strong relationships, Craig thrives on delivering results that drive business success.