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Is Your PEO Accredited?Started in January, 1996, the Institute for the Accreditation of Professional Employer Organizations sets standards and ensures compliance for PEOs that voluntarily apply and pass the accreditation process. Among other standards, PEOs must meet the following criteria to become accredited: -- Have an adjusted net worth of $50,000 or 5% of total liabilities, whichever is greater. -- Submit a complete financial statement audited by a certified public accountant. Must also submit quarterly financial reports to the institute for review and analysis. -- Show that all wages, payroll taxes, benefit payments, and workers' compensation insurance premiums have been paid on time. -- If the PEO maintains a self-insured benefit or workers' compensation plan, it must have adequate reserves for all plans of self-insurance. The reserves must be reviewed by a certified actuary or a CPA who is a member in good standing of the Securities & Exchange Commission Practice Section of the American Institute of CPAs. -- All top officers and owners of 20% or more of a PEO are subject to a background check. -- PEO officers must complete 60 hours of continuing education per year. -- Contract with client companies in writing, spelling out responsibilities of PEO and work-site employer. -- Obtain written acknowledgement from assigned employees that they understand the nature of the employment relationship with the PEO and accept such employment.
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Updated Nov. 6, 1997 by bwwebmaster
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