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PEO Accreditation Guide

PEO Accreditation Guide

Learn how to find a PEO provider and the differences between the three accrediting bodies: ESAC, IRS, and Certification Institute.

  • There are three main accrediting bodies in the PEO industry: ESAC, IRS, and Certification Institute.
  • ESAC-certified PEOs are ranked in the top 5% of PEOs in the industry.
  • Accreditation by these three agencies ensures uncompromising financing, good risk management programs and ethical HR practices, ensuring companies are working with the right companies.
  • This article is for small business owners who are considering working with PEO and want to know why certification is important in the PEO industry.– If you decide to unload your mission on human resources, you may be difficult to find the right if you decide to work with your employer’s professional district (PEO). There are hundreds of PEOSs of thousands of national SMEs. Finding the correct adjustment can mean the difference in the difference between the difference between the share of your company’s human resources and a sequence of sequences to a single size.

More importantly, the nature of the PEO’s work is very sensitive. Collect and store customer data to collect and store customer data, and trust the third party to accurately collect and store human resource policies that can indicate corporate culture. Deciding to work with a PEO is easy, but finding the right person takes time and care.

There are several factors to consider when looking for the best PEO provider. Defining business needs is the first step. Then work with a few other PEOs to find the best service for your business needs.

An important factor is authentication. There are many PEOs in the United States, but only a few are accredited by the top PEO certification bodies. These agencies seriously review PEOs and their services annually to ensure they are the same.

The Employer Services Assurance Corporation (ESAC) is one such agency. This organization is made up of top PEO attorneys and CPAs dedicated to integrating and building trust in the PEO industry. Other certification bodies for PEO include the IRS, certification bodies, and the National Association of Professional Employers’ Organizations (NAPEO). While NAPEO is a dedicated stakeholder representing the PEO industry, we confirm that the financial statements reviewed by an independent CPA in conjunction with PEO have been audited.

What is PEO Certification?

Certification agencies carefully review PEO’s offerings to ensure that companies provide services of an established standard. There are different agencies. While accreditation is not the be-all and end-all of good PEO services, it is an important factor, especially for large companies that provide professional recruitment services to thousands of companies across the country.


ESAC is the gold standard for PEO accreditation agencies. As the official accrediting body for the PEO industry, ESAC has a Board of Directors made up of PEO industry attorneys, chartered accountants, and independent directors. These experts have over 100 years of combined experience in the PEO industry. Reviews financial reporting, general business practices, program delivery, and regulatory standards. Reaching this level of certification, PEOs are financially stable and certified companies that provide ethical services to small businesses across the country.

Companies with this certification have a competitive advantage over other PEOs. From a small business owner’s perspective, working with a certified PEO ensures quality of service, while a non-certified PEO carries more risks. In addition, a small company’s owner can purchase the PEO service more economically. By comparing the price, services and other practices between certified PEOs, the company owner decides to provide high quality services, regardless of which company. You can.


The PEO certified by IRS is known as an authorized professional employer (CPEO). The company can work directly with IRS when dealing with small tax information. The CPEO name is an IRS agency “authentication”, but the CPEO name reflects the total IRS program to simplify the tax issues between PEOS and SMES. PEO will be referred to as CPEO, according to IRS, “Tax events, backgrounds, business sites, financial reports, attachments, and other requirements should be complied. This process is made in PEO funding, and the company is financial Ensure that you are eligible to provide information.


Certifications such as ESAC are a specialized enterprise to assess conservative practices to ensure moral business and stable financial situations in conservative industries. It also specializes in reviewing the housing management, especially the risk management that pays employees. This organization’s certificate is related to large-scale risk management and employee compensation, such as construction companies. The organization benefits both SMEs and PEOs by reviewing PEO practices and ensuring that the entire process minimizes workers’ wage losses. Of the three certification bodies we reviewed, certification bodies have the most transparent and comprehensive review process.

What are the criteria for a certified PEO?

Many of the general review applications and processes of these three accreditation bodies are not officially recognized. All of these organizations look at the process from a high-level perspective, and as a small business owner this may be the only understanding needed to ensure quality service. Although these organizations certify referral services, they are not rock-solid protection against bugs, customer service issues, or other problems you may encounter. Instead, certification should be viewed as a basic guarantee that you are dealing with an honest and reputable company.

ESAC standards

While there are several factors to ensure quality services, ESAC emphasizes regulatory practices to ensure PEOs operate in a safe and ethical manner. The agency, which has rated PEOs since 1995, is effective at detecting problems with business practices involving PEOs before they cause defaults. ESAC standards are so stringent that states have begun requiring ESAC to rate and certify viable businesses based on state-specific regulations. Once the company is reviewed and approved, it is considered in good standing with state regulatory and ESAC standards. Many states accept ESAC certification in lieu of licensing requirements. The agency also provides more than $15 million in financial aid to PEOs nationwide, not lined up by any other agency.

For your specific needs, ESAC has over 40 industry best practices and reviews reputable businesses seasonally. This review process includes analysis of employee payments, including federal and state employment taxes, workers’ health and compensation premiums, and severance pay plans.

Standard IRS.

The IRS has several regulations that PEOS should meet to become CPEO. In general, PEOS must meet the specific tax state, the basic requirements and the financial report to obtain this situation. PEOS must be applied independently and controlled by the IRS to achieve the level of certification. Remember that some companies might be suitable for CPEO’s condition based on services.

Certification institute

The Certification Institute has a wide list of documents and requirements for PEOs, as well as an application and revision. However, the objective of this certification is risk management. Examples of certification body requirements include written risk management plans, customer service contracts, employee handbooks, written policies and procedures for workers’ compensation programs, and policies and procedures. written procedures for invoice management practices. Some of these processes must be reviewed and updated annually by the certification body.

Specific requirements and procedures are defined in the certification body’s application manual, but the overall review process involves an in-depth review of the PEO’s overall risk management program.

Why is it important to work with a licensed PEO?

With thousands of PEOs nationwide, working with certified PEOs means working with a company that is willing to appreciate its business practices from a third party. If the PEO of interest is ESAC certified, it belongs to the top 5% of all PEOs in that country. If you have also received IRS and certification body certification, you belong to the Elite PEO Group.

The work characteristics of PEO are sensitive. Third-party companies process important employee information, important HR operations, and important compensation programs. You need to work with a company you can trust. This means considering things like third-party authentication. Choosing the right PEO means understanding the company’s requirements, but if the PEO meets all the company’s requirements but is not certified, it could put the company at further risk. I have. By doing your research, working with multiple PEOs to find the right one, and prioritizing accreditation, you can set your business up for success.

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