PEO Credentials & Certifications: What to Look For
When choosing a Professional Employer Organization (PEO), it’s essential to ensure that the company is reputable and compliant with industry standards. The PEO’s credentials and certifications are vital indicators of its legitimacy, reliability, and ability to provide the services your business needs. Here are the key credentials and certifications to consider when evaluating a PEO.
1. Is the PEO IRS Certified (CPEO)?
The IRS Certified Professional Employer Organization (CPEO) certification is one of the most important credentials a PEO can have. This certification means the PEO is approved by the IRS to act as a co-employer and handle payroll and tax-related functions. A CPEO is required to meet strict compliance and financial standards, which makes them a more secure choice for businesses.
2. Is the PEO a NAPEO member and ESAC accredited?
The
National Association of Professional Employer Organizations (NAPEO)
is the leading trade association for PEOs. Membership in NAPEO ensures that the PEO follows the highest ethical standards and keeps up with industry trends.
ESAC (Employer Services Assurance Corporation)
accreditation is another important indicator that a PEO is financially sound and compliant with industry regulations. Only about 3% of PEOs are ESAC accredited, making it a strong signal that the PEO is trustworthy and meets rigorous standards.
3. Do they have SSAE 18 SOC 1 audit/compliance standards?
SSAE 18 SOC 1 is an audit standard for service organizations, ensuring that a PEO’s financial and HR processes are secure and compliant. A PEO with an SSAE 18 SOC 1 audit demonstrates that they have been evaluated by an independent third party and meet rigorous internal controls for financial reporting. This adds an extra layer of security and trust to your partnership.
4. Are they a SHRM Recertification Provider?
The Society for Human Resource Management (SHRM) is a well-known professional organization in the HR field. A SHRM Recertification Provider is able to offer courses and training that are recognized by SHRM for recertification purposes. This is a good indication that the PEO is dedicated to ongoing education and staying up-to-date with HR best practices, ensuring they offer the most current and relevant services to your business.
By evaluating a PEO’s credentials and certifications, you can ensure that the company you choose is trustworthy, compliant, and well-equipped to handle your HR needs.
Pro Tip:
There are over 600 PEOs nationwide. Work with a PEO Broker (like us!) to get side-by-side comparisons and unbiased guidance—at no cost to your business.
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