What is an ASO?

Administrative Services Organization (ASO).

The most important distinction between an Administrative Service Organization "ASO" arrangement and a PEO arrangement is the service provided through an ASO arrangement does not establish a co-employment relationship with the employees. By definition, the clients’ wages under the PEO model are reported under the PEO’s Federal Employer Identification Number (FEIN), and the ASO client’s wages are reported under the client’s FEIN. With an ASO the client remains the sponsor of the benefit programs, such as health coverage and retirement plans. Also Workers' compensation coverage is provided under the client's policy and the ASO is not considered an employer for the purposes of federal and state employment laws such as wage and hour, civil rights, and similar laws imposed on employers.

An ASO, much like a PEO, oversees the administrative aspects of managing a company's employee benefits, Payroll Administration, 401(k) retirement plans, safety and risk management and human resources. 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, but the client company remains the sole sponsor.