Hiring your first employee in the United States is exciting — but it can also be overwhelming. From employment taxes to healthcare compliance, the U.S. job market has strict regulations. That’s where a PEO (Professional Employer Organization) comes in.
What is a PEO?
A PEO is a third-party company that acts as the official employer of record for your U.S. hires. This means they handle payroll, benefits, taxes, and compliance, while you manage the day-to-day work of your team.
You retain full control of the employee’s responsibilities and performance, but the PEO handles the red tape.
How It Works
Let’s say you’re a French startup hiring a U.S.-based sales manager. Rather than incorporating locally and setting up a payroll system, you partner with a PEO like Deel or Justworks. They legally employ the sales manager on your behalf and handle:
Payroll processing and tax withholding
Health insurance and benefits
Workers’ compensation
State and federal compliance
Onboarding documentation
This lets you hire faster, reduce liability, and test the U.S. market without long-term commitments.
Benefits of Using a PEO
✅ Faster market entry — No need to open a U.S. entity to start building a team
✅ Full legal compliance — Avoid costly mistakes with U.S. labor laws
✅ Access to benefits — Offer competitive packages including health coverage
✅ Scalability — Start with one hire and grow as needed
Who Should Use a PEO?
PEOs are ideal for early-stage startups or foreign companies testing product-market fit in the U.S. They’re also useful for founders who want to focus on growth, not HR logistics.
💡 Tip: If you’re planning to scale quickly or raise U.S. capital, you might eventually want to transition to your own U.S. entity — but PEOs are a powerful stepping stone.
Conclusion
A PEO can help you build a compliant, efficient, and attractive U.S. team — without the headache of local incorporation. It’s the shortcut many international companies use to plant their first flag in the American market.
📞 Need help finding the right PEO? Borderless Advisors will guide you through provider selection and setup.
