The employee, Heidi Mullin, was fired after the incident Wednesday in the Galesburg-Augusta school district, said Ed Dollin, president of Auxilio Services, a company hired to handle student transportation.
A video taken by a student and posted online shows the 7-year-old being slammed into the side of the bus by Mullin.
"There are plenty of safety nets in place. This should have never occurred," Dollin told The Associated Press. "We take responsibility."
He said Mullin is "extremely remorseful." Her phone number is not listed and she could not be reached for comment.
Dollin said Mullin was the fourth employee to ride the bus since reports of bad behavior by students in late September. He said the incident was preceded by the boy screaming, throwing his book bag, sticking his head out of the window and threatening the driver.
He said Mullin decided to sit next to the boy to try to defuse the situation and was grabbed around the neck. That's when she "panicked" and slammed him against the interior wall of the bus.
"By sitting in the seat with him, it was like putting gasoline on a fire. It was totally wrong," Dollin said.
He said the driver should have pulled over before the incident or the student should have been removed at an earlier stop. Dollin said Mullin has her own video of what happened before she struck the child.
A 5-second video, apparently shot by someone on the bus and posted on Facebook, shows a boy being lifted from a seat and slammed into a window with a loud bang. Mullin yells, "sit down!"
It wasn't clear if the child was injured. The boy was back in school Thursday, Galesburg police Sgt. Jeff Heppler said.
Police are investigating the incident as well as a claim by Mullin that the boy threatened her, Heppler said.
"We are trying to secure both what led up to this and what played into this," Heppler said. "Anybody could face charges, whether it be at the juvenile level or the adult court level depends on the age and what the court and/or prosecutor determines needs to be done after we have completed our investigation."
Superintendent Tim Vagts said the incident was unacceptable.
"We're working with families to listen to their concerns," he said.
Parents held a daylong protest outside the district's bus garage. About two dozen parents and students were outside Thursday evening, carrying signs and calling for action by officials. Cathy Taylor, one of the parents who turned out, said her 13-year-old son was on the bus when the incident took place.
"He couldn't even believe what he was seeing," Taylor said.
Dollin said the Cincinnati-based company started working in Galesburg-Augusta, 50 miles southeast of Grand Rapids, on Aug. 1.
"Our goal is to rebuild the trust of the community," he said.