FAQ - Will the government accept a PEO as an "Employer of Record" for my business?
The answer is: YES
PEO operates in all 50 States. Many states provide some form of specific licensing, registration, or regulation for PEO's.
The states statutorily recognize PEO's as the employer or co-employer of worksite employees for many purposes, including worker's compensation and state unemployment insurance taxes.
The IRS has accepted the right of a PEO to withhold and remit federal income and unemployment taxes for worksite employees.
For government, a PEO:
- Consolidates several companies' employment tax filings into one.
- Provides more professional preparation and reporting.
- Accelerates collection of taxes.
- Extends access to medical benefits to more workers.
- Provides access to 401(k) retirement savings opportunities to more employees.
- Improves the communication of government requirements and changes to small businesses and their employees.
- Reduces litigation by resolving many problems before they reach court.
- Allows government agencies to reach businesses through a single-employer entity
Source (NAPEO 2007 brochure).
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