The National Association of Professional Employer Organizations offers the following guidelines to companies considering a relationship with a PEO.
- Make sure the PEO is capable of meeting your goals. Sales brochures and fancy proposals are easy to print. And don’t fall for hi-pressure, fast-talking sales reps that offer the moon for pricing that seems to good to turn down.
- Meet the Risk Manager, Human Resources Manager, Payroll / Accounting Manager, PEO Ownership, and staff that will serve you.
- Check the firm's financial background, ask for banking, insurance, and credit references. Ask the PEO to demonstrate that payroll taxes and insurance premiums have been paid.
- Investigate the company’s administrative and risk management competence.
- What experience and depth does their internal staff have? Do any of the senior staff have professional training or designations?
- Can the PEO firm provide you with a certificate of insurance coverage from an A-rated, nationally recognized insurance carrier?
- Review the Client Services Agreement carefully. What is not said is just as important as what is said. Make sure that the CSA (client services agreement) clearly outlines each party’s responsibilities and liabilities in as much detail as possible. What provisions permit you or the PEO to cancel the contract?
- Does the PEO provide your company with local, face-to-face representation / same day response? What is the response time for a qualified Risk Manager or Human Resource Manager to visit your workplace in case of emergency?
- Has your PEO provided you with a copy of their license or registration to conduct PEO operations in your state? New Mexico, Texas and Arizona require licensing.
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