The Government View of Employers Partnering with PEO’s

  • Nothing in Federal law CLEARLY states a PEO will be the legal liable party for compliance. HOWEVER, many departments within the Federal Government have rules in place for PEO’s and their clients. PEO’s assure government compliance for their clients… just like they do for so many other aspects of their business.
  • Regardless of whether an employer with 50 or more employees is in a PEO or not – most of the compliance requirements will not change. Most full service PEO’s will administer the entire compliance function for the client including the 1094 and 1095 forms, thereby alleviating them of this burden.
  • If an employer has less than 50 employees and enters into a PEO relationship, they will not have to comply with the law because compliance is based on the FEIN number of the client and not the FEIN number of the PEO.