Selecting an Accredited PEO is Smart Business

PEOs assume responsibility for payroll, payroll tax administration, benefits administration and HR matters.  How do you ensure you are selecting a credible and reliable PEO to execute these crucial duties?  Look for an accredited PEO.

What is Accreditation

Employer Services Assurance Corporation (ESAC) is the official accreditation and financial assurance organization for the PEO industry.

ESAC is an independent non-profit corporation managed by a board of directors. The board includes PEO industry attorneys, CPAs, and independent directors. These professionals represent more than 100 years of combined PEO industry regulatory experience. The independent directors are the final decision makers regarding PEO accreditation.

Accredited PEOs voluntarily undergo verification to become accredited and bonded at their expense.  This requires compliance with more than forty industry best practices.  Financial compliance includes quarterly verification of employer payments, including federal and state employment taxes, health and workers’ compensation premiums, and retirement plan contributions.

This is an arduous process. Less than five percent of the industry has achieved this proven level of reliability.

Advantages of an Accredited PEO

It is difficult for a business owner to know the reliability of a PEO.  ESAC accreditation validates a PEO’s financial stability, ethical business conduct, adherence to operational standards, and compliance with regulatory requirements.  This verification assures the business owner they are partnering with a trustworthy company.

Although an ESAC accredited PEO has never failed to meet its obligations, each PEO is covered by an individual bond to safeguard its clients.  And, ESAC provides an additional $15M umbrella bond to back its accredited PEOs.

Accreditation vs Certification

The difference between PEO accreditation and PEO certification might be confusing. Both serve their own purpose.

PEOs gain accreditation through ESAC as described in this article.  Certification is obtained through the Internal Revenue Service.

ESAC provides verification and financial assurance of all key areas of PEO reliability. IRS certification focuses only on federal employment taxes.  Although there are a few common requirements, ESAC accreditation is more extensive.

Verify PEO Accreditation

To verify PEO accreditation, look for the ESAC logo on the PEO’s website. You can verify a PEO’s accreditation any time online.

Accreditation is Smart Business

PEOs serve the business community well.  Selecting an accredited PEO provides peace of mind that your PEO is complying with the industry’s highest standards and practices.

Spirit Human Resources recognizes the value of ESAC accreditation and obtained accreditation during its first year in business.  Not only does accreditation validate individual PEOs, it creates a high standard for the industry.

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