What is an ASO?
What is a ASO?
An Administrative Services Organization (ASO, or also called Comprehensive Services) is a company that acts in many respects the same way as a PEO, providing the same services. However, they do not become a Co-Employer: that is, your employees remain under your Federal Employer ID Number (FEIN). All the employer liability remains with you and not with the provider.
Who benefits from using an ASO?
ASO companies have a stronger focus on support functions, since they do not carry any liability. HR, Benefits Administration, Payroll and Compliance support are common services provided by ASOs.If, for example, your company is at a point where it has sufficient internal HCM infrastructure, a customized ASO solution might be adequate.
Are there advantages to using a ASO?
Many companies that have partnered with a PEO in the past want to exit that relationship for multiple reasons. ASO is a good first (or even permanent) step for these companies, as it will take them some time to ramp up the internal infrastructure they need to fully support their employer operations.The ASO also provides expertise in issues that might not come up often, so the company does not have to hire a specialist or consultant.
Is there any risk to using an ASO?
Under an ASO arrangement, the client retains the full employer liability, which is shared under the PEO. The cost for ASO services is lower, however.