- The New Era for the PEO Industry
PEO services find a new metric in the USA as a sign of dependability. The Internal Revenue Service in the USA recently opened up applications for a Professional Employer Organisation to achieve certification status. While the Certified PEO program is yet to arrive in India, it is worth understanding how clients to gauge the trustworthiness in the PEO industry. It will certainly usher in a new era of PEO.
1.1 A brief background on Certified PEOs (CPEO)
The IRS has started this initiative under the Stephen Beck Junior Achieving A Better Life Experience (ABLE) Act, 2014. This is the second time the initiative for PEO certification has taken root. The first attempt had been caught up in delays and hurdles. However, the second time around, the certified PEO initiative has gained momentum and seems to be a continuous movement.
By law, the IRS will publish CPEO public listings for PEOs who have achieved successful certifications. They will also publicize PEOs whose certification has been revoked or suspended
1.2 How can PEO Agencies Become Certified?
- The PEO service must pass thorough background checks and tax compliance inspections. These checks include criminal and financial investigations of the PEO owners/officers. Any and all entities set up by the PEO owner/officer will also be scrutinized for taxation.
- To become a CPEO, a PEO agency must secure a surety bond. This figure is about 5% of the organization’s annual federal tax liability up to 1 million USD.
- The PEO must satisfy certain financial review requirements. For this, they are required to submit annual audit documentation that reflects a positive working capital.
- For achieving PEO certification, organizations must provide quarterly assertions and attestations for federal employment tax compliance. The CPEO must provide written attestation that the PEO adhered to ALL compliance requirements.
- Abide by the terms of client service agreements set down by the IRS.
- Pay an annual fee of around $1,000.
1.3Step into the new era for the PEO Industry
Clients of a CPEO can considerably mitigate financial risks by contracting a certified PEO agency. The CPEO program also assures complete transparency in the reliability of a CPEO by making all certifications public.
Moreover, a customer can guarantee that a Certified Professional Employer Organisation is reliable. Remember, to achieve the certification, the PEO agency had to undergo rigorous scrutiny.
Additionally, here are more benefits of a CPEO.
- Finding assurance in the absence of CPEO programs
As mentioned, India is yet to adopt any certifications for PEO agencies. So, how do you assess a PEO service in India? You need to look at their speedy solutions and local compliance. The right PEO agency will be completely transparent in its operations and in keeping with your business goals and objectives.
Looking for a partner that will tailor their solutions to your unique situation? We are there for you. We customize our PEO offerings to match your needs. Our PEO services are not certified simply because CPEO programs have not come to India, but we are already thriving in the new era of the PEO industry with our transparency and technology-backed solutions.
We execute our plans with lightning speed so you can become operational in almost no time. If you want to know more about what we can do for you, or need very specific guidance, let us know.