PEO - Professional Employer Organizations Licensing by State

PEOs operate currently in all fifty states. The following chart includes only the more comprehensive registration and licensing acts that are applicable to the PEO industry. Other states have legislation specifically referencing the PEO or employee leasing industry but do not have comprehensive registration or licensing requirements specific to the industry (see e.g. Georgia Code section 34-7-6 or the Washington Master Business Application Revised Code of Washington § 19.02.010). In addition, state unemployment codes, workers’ compensation acts, and other statutes may have PEO specific references. Colorado and Rhode Island have specific certification requirements with regard to benefits and taxes respectively. Information courtesy of NAPEO.

District of Columbia

Registration Required. Registration includes: Registration fees; Confirmation that financial institution used for payroll operates and maintains branches in Hawaii; Most recent Internal Revenue Service (W-3); and Surety bond or irrevocable letter of credit equivalent to the required bond amount based on a sliding scale described in Haw. Rev. Stat. 373L-3 PEO registrations expire on June 30 of each even-numbered year.
PEOs must make application with the state of Hawaii

Registration Required
Pursuant to 215 Ill. Comp. Stat. 113/20(a), an employee leasing company must register with the Department of Insurance prior to obtaining workers' compensation insurance or self insurance in the State. An Employee Leasing Company Registration (Form ELC-1) should be downloaded, completed and mailed to the department.

Tax Certificate Required

Client additions and terminations must be reported within 30 days to Director of DIR and PEO's Workers compensation carrier.

Quarterly Reports. The state sends Quarterly Contribution and Wage reports to be completed and returned with payment. Due the last day of the month following the quarter. Wage reports can be filed electronically.

The director will determine,by rule, the financial requirements for a renewal registration. The rule:

-may require submission of securities or guarantees securing payment of all unemployment taxes and workers compensation claim payments due to or with respect to covered employees

-may require that the security or assets to secure payments be kept at a financial institution located in Alabama.

-Director may eccept net worth based on audited financial statements in whole or in part for the financial requirements
-Requirements shall not exceed $100,000

Apply to the Secretary of State for a Certificate of Authority to conduct business in Alabama.

PEO and/or client can sponsor retirement and welfare benefit plans; however, the service agreement must specify the sponsor of each plan.

File an Employers Registration form
-Maintain accurate payroll records
-File Quarterly contribution reports, Quarterly reports are due the last day of the following month of the end of the quarter.
-Pay unemployment insurance taxes
-Report changes in ownership or closure of the business
-Report changes in corporate officers
-Employment Security Tax is required by state law to maintain separate accounts for each employing unit. Aggregation of reports, as in employee leasing is NOT allowed.
Biennial Reports-because we filed on an even numbered year (2012) then our report is not due until 2014. This report will keep our COA up to date.

Apply to the Department of Commerce for a Certificate of Authority to conduct business in Alaska.

PEO and/or client can sponsor fully insured benefit plans.

PEO sponsored self-funded benefit plans are not specifically addressed in Alaska laws or regulations, but will most likely to be considered MEWAs.

Provide notice of all new and terminated clients to its workers compensation insurance carrier and the workers compensation commission.

Must maintain either a minimum net worth of at least $100,000 or a bond, an irrevocable letter of credit or securities that have a minimum market vale of $100,000.

Apply to the Corporation Commission for a Certificate of Authority to conduct business in Arizona.

A PEO sponsored fully insured benefit plan is not subject to additional regulation.

A PEO sponsored self-funded benefit plan may be considered a MEWA.

MEWA Provisions − A self funded MEWA is considered an "unauthorized insurer".

Filing and Reporting. Quarterly Contribution and Wage Report on official forms. Due the 15th of the month following the end of the quarter.

Employers required to submit W-2 data to the Social Security Administration must likewise submit its quarterly wage information to the state Employment Security Department on magnetic media tape in accordance with agency requirements.

Yes, To exempt the Client from joint & several liability for SUI taxes, the PEO must post a $100,000 Surety Bond, reduced to $35,000 after 3 years. This is in addition to the licensing bond.

Apply to the Secretary of State for a Certificate of Authority to conduct business in Arkansas.

PEO and/or client can sponsor benefit plans.

A PEO sponsored self-funded benefit plan is allowed if: a) a licensed TPA is used; b) all plan assets are held in a separate trust account; and c) sound reserves are provided for the plan.

A PEO will not be considered a MEWA if a benefit plan is offered only to the PEO's employees.

Apply to the Secretary of State for a Certificate of Authority to conduct business in California.

Registration requirement only for PEOs involved in the garment industry.

PEO and/or client can sponsor fully insured benefit plans.

A PEO sponsored self-funded benefit plan will likely be deemed a MEWA and will be subject to California insurance regulations.

Annual Legal Opinion. Each PEO must obtain an independent opinion of counsel to the Department that the PEO is in compliance

Requires an employee leasing company to annually file a renewal of its certification along with evidence that the employee leasing company meets specified financial criteria. Authorizes the department to reduce or waive the bonding requirement for an employee leasing company.

Maintain and have open for inspection a listing of work-site employers and their collective employees.

Maintain records and reports.

Quarterly Reports. Can be submitted on-line or electronically. It is due the last day of the month that follows the quarter.

Co-Employer Annual Report. After PEO is registered, SUI office will send the Annual Report to the address on record.

This needs to be completed and returned within 30 days.

Apply to the Secretary of State for a Certificate of Authority to conduct business in Colorado.

PEO and/or client can sponsor fully insured benefit plans.

A PEO sponsored self-funded benefit plan will be deemed a MEWA and will be subject to Colorado insurance regulations.

Notify Commission of any change to the beginning and ending date of its fiscal year.

Notify commissioner of any change in address for each office.

Quarterly Reports-The PEO may file quarterly returns for each Client as they are issued. (perhaps more frequently if determined)

Apply to the Secretary of State for a Certificate of Authority to conduct business in Connecticut.

PEO and/or client can sponsor fully insured benefit plans, however an insurance provider must file certain information with the insurance commissioner prior to offering coverage to a PEO.

Quarterly Reports must be filed with the Division of Unemployment Insurance using the Client's name and number.

Apply to the Division or Corporations for a Certificate of Authority to conduct business in Delaware.

PEO and/or client fully insured benefit plans not addressed in Delaware laws or regulations.

PEO sponsored self-funded benefit plans are not specifically addressed in Delaware laws or regulations, but may be considered a MEWA.

District of Columbia

Quarterly. Employers must file quarterly the Contribution & Wage Report (Form UC-30). Quarterly filers are mailed the UC-30 each quarter, although employer of 250 or more must file electronically.

Quarterly .Employers must file quarterly the Contribution & Wage Report (Form UC-30). Quarterly filers are mailed the UC-30 each quarter, although employer of 250 or more must file electronically.

Apply to the Dept. of Consumer & Regulatory Affairs - Corporations Division for a Certificate of Authority to conduct business in the District of Columbia.

PEO-sponsored and Client-sponsored plans are not addressed in District of Columbia laws or regulations.

Annual Assessment-This assessment fee is used to fund BELC and is assessed every year based upon gross annual payroll. Statements are usually mailed out in March to all licensees and the assessment is due by April 1 (delinquent after April 30), along with a copy of the UCT-6 form

Annual Report-Submit to BELC no later than 120 days after end of fiscal year. For Florida payrolls of more than $2,500,000, the financial report must be audited, otherwise they must be reviewed, and must show the minimum required working capital Part of the annual reporting requirement is a workers compensation liability statement.

Semi-Annual Report-The Florida Unemployment Compensation Law requires a licensed PEO to submit a report listing clients with Florida employees, followed by the names of the Florida employees and their social security numbers. Due dates are July 31 or February 28. Submit to Unemployment Division, Employer Registration.

Quarterly Report-Due 75 Days after the end of the qaurter. Signatures and attachments are required and evidence of working capital is required. Quarterly Compliance Form must be submitted with the Quarterly Report.