Employment Models Compared
EOR vs PEO vs AOR: Which Employment Model Fits Your Staffing Firm?
EOR, PEO, AOR, GEO, ASO: the alphabet soup of outsourced employment confuses even industry veterans. The models differ on two questions that matter: who is the legal employer, and which workers the model is built for. This guide compares them all so you can pick the right structure for your placements.
The short version: an employer of record (EOR) fully employs your placed W-2 workers. A PEO co-employs a company’s internal staff. An AOR (agent of record) handles engagement and payment for 1099 contractors without employing them. Everything else is a variation on those three.
EOR vs PEO vs AOR at a Glance
| Factor | EOR | PEO | AOR |
|---|---|---|---|
| Who is the legal employer | The EOR, fully | Shared: you and the PEO (co-employment) | Nobody; contractors stay self-employed |
| Built for | Contract and temp placements (W-2) | A company’s own internal employees | Independent contractors (1099) |
| Payroll taxes and filings | EOR’s EIN, EOR files | PEO files under co-employment | Contractor self-pays; AOR issues 1099s |
| Workers’ comp | EOR’s policy | Shared PEO policy | Typically none (not employees) |
| Employment liability | Carried by the EOR | Shared with you | Classification compliance is the risk to manage |
| Best fit in staffing | Placing W-2 contractors without being the employer | Your own internal recruiters and staff | Paying legitimate 1099 contractors compliantly |
Employer of Record (EOR): Full Employment, Off Your Books
The EOR becomes the complete legal employer of your placed workers: payroll under its EIN, tax filings, workers’ comp, unemployment, onboarding, and multi-state compliance. You keep recruiting, client relationships, rates, and margins. For staffing firms placing W-2 contractors, this is the model that removes the employment burden entirely. Our full employer of record guide covers how it works step by step.
Professional Employer Organization (PEO): Co-Employment for Your Internal Team
A PEO shares the employer role with you for your own internal staff: your recruiters, your admin team, your salespeople. It pools small companies for better benefits and handles HR administration, but liability is shared and the model was never designed for contract placements. The practical rule: a PEO can be great for your firm’s own employees, and the wrong tool for the workers you place. Trying to run staffing placements through a PEO creates exactly the co-employment exposure most clients are trying to avoid.
PEO vs Staffing Agency: A Different Question
“PEO or staffing agency?” gets asked constantly, and it is worth separating because the two are not competing options. They solve opposite problems. A staffing agency finds and supplies workers you do not have. A PEO administers workers you already employ. If you need three warehouse associates next Monday, a PEO cannot help you: it has no recruiters and no bench. If you have twelve employees and want better health benefits and someone else running HR, a staffing agency cannot help you either.
The confusion comes from the overlap in the middle: both handle payroll, both deal with workers’ comp, both touch compliance. But the sourcing question is the dividing line. A hiring company usually needs a staffing agency to fill a role and a PEO to support its own headcount, and plenty of businesses use both at once for exactly those separate reasons.
For a staffing firm owner the question flips around. You are the one supplying workers, so the real decision is who employs the people you place. That is the EOR question, not the PEO question, and it is why staffing firms that go looking for a PEO usually discover halfway through the conversation that an EOR is what they actually needed.
Agent of Record (AOR): For 1099 Contractors
An AOR does not employ anyone. It engages, vets, and pays independent contractors on your behalf, handling contracts, W-9s, invoicing, and 1099 filings, plus the classification documentation that keeps a legitimate contractor relationship defensible. When a worker genuinely qualifies as 1099, AOR is the clean way to run it. When they do not, the answer is W-2 through an EOR, and our W-2 vs 1099 vs C2C guide explains where that line sits. For a fuller breakdown of the role itself, see what an agent of record does.
The Other Acronyms: GEO and ASO
GEO (Global Employment Organization) is essentially an EOR for international hiring: employing workers in countries where you have no entity. If your placements are US-based, a domestic staffing EOR is the relevant model. ASO (Administrative Services Organization) provides HR and payroll administration without becoming or sharing the employer: you keep full employment and liability, and the ASO does the processing. It sits between doing everything yourself and a PEO, and like a PEO it is built for a company’s internal workforce rather than staffing placements.
Which Model Fits Which Situation
| Your situation | The right model |
|---|---|
| Placing W-2 contract workers, don’t want to be the employer | EOR |
| Placing W-2 workers and staying the employer | Run it yourself (with back-office support), or ASO-style administration |
| Paying legitimate 1099 independent contractors | AOR |
| Benefits and HR for your own internal staff | PEO or ASO |
| Filling an open role you cannot source yourself | Staffing agency (not a PEO) |
| Hiring workers outside the US | GEO / global EOR |
Where BOSS Fits
BOSS is built for the placement side of that table. As an EOR, BOSS fully employs your placed W-2 workers, with payroll, taxes, workers’ comp, and insurance coverage carried by BOSS. As an AOR, BOSS engages and pays your legitimate 1099 contractors compliantly. And if you want to remain the employer, the Core and Funded Plans give you the automation without the handoff. One platform, and the employment model becomes a choice per placement instead of a constraint.
Not sure which model your placements need?
Describe your book of business and we’ll map it to the right structure in one conversation.
EOR vs PEO vs AOR FAQs
What is the difference between an EOR and a PEO?
An EOR becomes the full legal employer of the workers; a PEO shares employment with you through co-employment. PEOs are designed for a company’s internal staff, while EORs are built for placing workers, which is why staffing firms use EORs.
What is the difference between a PEO and a staffing agency?
A staffing agency finds and supplies workers you do not have. A PEO administers workers you already employ. They are not alternatives to each other: a PEO has no recruiters and cannot fill an open role, and a staffing agency does not run HR and benefits for your internal team. Many companies use both, for those separate reasons.
Can a staffing firm use a PEO instead of an EOR?
Rarely a good fit. A PEO can cover your own internal staff, but for the workers you place it creates co-employment exposure rather than removing it. Staffing firms that start out shopping for a PEO usually find that an EOR is the model that matches what they actually place.
What is the difference between an EOR and an AOR?
An EOR employs W-2 workers. An AOR engages and pays 1099 independent contractors without employing them, handling contracts, payments, and 1099 filings. The choice follows the worker’s correct classification.
Is an ASO the same as a PEO?
No. A PEO co-employs your workers and shares liability. An ASO administers HR and payroll while you remain the sole employer with full liability. ASO gives you administration without co-employment; PEO gives you both.
Can a staffing agency use a PEO for placed workers?
It is usually the wrong fit. PEOs are built for internal employees, and running placements through co-employment creates the exposure clients want to avoid. For placements the purpose-built options are EOR (W-2) and AOR (1099).
What is a GEO?
A Global Employment Organization employs workers in countries where you have no legal entity, essentially an international EOR. For US-based staffing placements, a domestic staffing EOR is the relevant model.
Does BOSS act as an EOR or an AOR?
Both. BOSS acts as the Employer of Record for placed W-2 workers and as Agent of Record for legitimate 1099 contractors, on one platform, so each placement can run under the correct model.