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Joseph, Lawyer
Category: California Employment Law
Satisfied Customers: 5299
Experience:  Extensive experience representing employees and management
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I keep hearing about Professional Employer Organizations or

Resolved Question:

I keep hearing about Professional Employer Organizations or Staffing Employee companies do you know if they can do what I want. Are they even legal in California?
Submitted: 2 years ago.
Category: California Employment Law
Expert:  Joseph replied 2 years ago.
Do you mean temporary employee agencies, or employee search companies that can find employees for you for the business? Like agencies that supply you with employees and the employees are actually employees of the agency?
Customer: replied 2 years ago.

A company that hires employees pays all the taxes and workers compensation insurance but uses the employees to complete work for other companies. I keep seeing PEO used as a term for companies that send workers to complete work for other businesses but cover all the tax reporting and workers compensation. I just want to know if PEO's are legal ways of opperating a business that provides employees and all their benefits to other businesses.

I really need to figure out how to legally use one business to employee workers for serveral small one person businesses. I need to provide all recordkeeping, answering phones, banking, errand running and some general labor. I need one company responsible for all employment tax reporting. All employees would be completing work at one time or another during the work week for several different businesses.

Im looking for a legal way of doing what i must do out of necessity.


I want to start a new business that provides services for small businesses that can not afford to hire their own employees. I help 5 small businesses that are owner operated, I do their recordkeeping, check emails, banking and other small jobs. They are in need of part time help and between the 5 companies I could hire 3 people full time to do the work. Can I hire people under my business EIN pay taxes and provide workers compensation and benefits. But have the employees work at the business locations when needed.
In california can a business provide workers for other business without a labor contractor license?

Expert:  Joseph replied 2 years ago.
Hello Carrie,

Yes, you can start your own professional employee organization, as long as you assume responsibility for workers' compensation and payment of wages, you can legally hire these employees as part of your corporation and have them work for the other owner operated businesses.

Since you would be providiong labor to small family owned farms (and some other businesses) you would need to obtain a Farm Labor Contractor's License from the California Department of Industrial Relations in order to provide workers to work at farms.

This requires that you pass an examination, which requires that you pay a license fee of $500 and application fee of $100. The application does not appear to be particularly difficult and seems to only include the informaiton listed on the application form available here:

I hope this helps. Please let me know if you have additional questions.
Joseph, Lawyer
Satisfied Customers: 5299
Experience: Extensive experience representing employees and management
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