Worksite employee
A worksite employee is a client company employee covered under a PEO arrangement, and the label carries specific weight in federal CPEO tax rules.
In everyday PEO usage, worksite employees are the client’s people on the PEO’s payroll platform, as distinct from the PEO’s own corporate staff. The count of worksite employees usually drives the administrative fee and benefit eligibility.
The term also has a precise federal meaning: a certified PEO is generally solely liable for federal employment taxes on remuneration paid to worksite employees who meet the definition in the CPEO rules, and different treatment can apply to individuals who fall outside it. When CPEO liability protection is part of the sales pitch, ask which of your people qualify as worksite employees under the certification rules rather than assuming everyone does.