The acronym “ASO” stands for Administrative Services Organization. An ASO is an organization that provides outsourced solutions to meet the administrative and HR needs of the client, with the client retaining all employment-related risks and liabilities. The term ASO was established in the late 1990s in order to distinguish between companies using PEOs and companies using an HR company simply for administration. The principal difference between the two types of service is that, in an ASO arrangement, the client remains the employer of record for tax purposes. Ultimately, with this structure, tax and insurance filings are done through the ASO, but under the client company’s tax identification number.

 

HOW IT WORKS—Under this arrangement, a contract is signed saying that the ASO will administer all of the HR needs of the client. The ASO would administer the client payroll and submit its payroll related taxes to the IRS on behalf of the client. Workers' compensation and unemployment claims are handled by the ASO, but the liability of these claims is still on the client. A benefits package is administered and put in place for the client based on the client’s census of employees. The client can also utilize a full team of Certified HR professionals both on and off site when needed.

 

WHAT ARE THE BENEFITS?—The benefits to using an ASO provider over a company who just provides payroll are enormous. Under this platform, you are able to group together multiple aspects of your back office under one roof. With our one stop shop Human Resource Information System, your company can effectively have access to its payroll, workers' compensation information, employee benefits, and HR all in one place. Our goal is to consolidate the number of vendors you use for your HR functions and streamline your back office.  By consolidating the number of vendors you use, many times you will see a decrease in cost spent on HR Functions. Not only that, but the ASO platform gives you access to a full team of HR Professionals to help with any employee related issue that may arise.

 

WHAT IS INCLUDED?—The ASO model includes all of the same services as the PEO model. The four core areas the ASO handles for its clients are Payroll, Employee Benefits, Workers' Compensation and HR Management. Please see the SERVICE GRID for a full list of services.