A professional employer organization surety bond could be the best option for you rather than constantly monitoring your working capital thresholds. Business enterprises that lack human resource and benefit management expertise employ the services of a Professional Employer Organization. “PEOs” are licensed by the individual states or if it so elects to seek federal registration, the United States Internal Revenue Service. Generally, a PEO is offers the following services.
- Identify, screen and hire talent from the available work pool.
- Manage payroll and benefit administration.
- Management of legal compliance with state and federal employment rules.
- Seek efficiencies by monitoring costs and the risks of a client’s business operation.
- Free an enterprise from the time consuming tasks associated onboarding personnel.
In order to acquire a license a PEO must generally meet certain working capital requirements. Start-up PEO enterprises may find it difficult to meet these requirements. Established PEOs may also experience working capital deficiencies due to the volatility of their sector and competitive pressures. The alternative to maintaining the appropriate financial measures is the posting of a professional employer organization surety bond.
Section 7705(c)(2) of federal code sets forth the bond requirements that an applicant must satisfy in order to become and remain a Certified Professional Organization (CPEO). The state regulators promulgate their own respective PEO surety bond rules independent of the federal requirement. The surety bond amount is generally adjusted in value as the amount of liability carried by the PEO increases.
Obtaining a professional employer organization surety bond is simple. We request a complete commercial surety bond application and the applicant’s current financial statement. Regardless of the working capital position of the PEO, we have a solution. SuretyOne.com offers PEO bonds in all states and our carriers are approved by the U.S. Treasury for bonding the federal obligations of the CPEO program. We also provide fidelity bonds for this business class. For federal CPEO requirements click here.
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