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The Ever-Changing Legal and Regulatory Environment

What is constantly changing, always moving, and might give you a headache if you look at it too long? If you said a lava lamp, you would have been close. It’s the legal and regulatory environment for PEOs.

This month’s feature, our annual legal and regulatory roundup, starts with a description of the political climate in Washington, D.C., how it affects what comes out of Congress, and how PEOs can spread the industry’s message on both sides of the aisle.

The feature then moves to the latest developments in the federal arena:

  • The #MeToo movement: Amidst the spotlight being intensified on workplace harassment, articles in the feature cover mitigating risks, helping clients with claims, and educating and supporting clients;
  • The huge and expanding issue of data security and compliance; and
  • Joint employment, handbook policies, and other initiatives out of the National Labor Relations Board.

And in the states:

  • The role of PEOs under new state-run retirement plans;
  • The saga of the PEO Model Act in Missouri;
  • The torturous employment laws and cases coming out of California;
  • The distinction between selling insurance and providing PEO services as recently revisited in Georgia;
  • The near-toppling of exclusive remedy in Wisconsin, and similar actions in Michigan and Montana; and
  • The recently passed legislation in Ohio protecting the business income deduction for clients.

There you have it: the PEO legal and regulatory environment as it stands right now. It will change, but NAPEO will keep you informed.

Know More


Executive Office

The Importance of Government Affairs Involvement

In the Spring of 1992, our PEO (Genesis HR Solutions) had been operating for slightly more than a year. At that time, given that the PEO was considered the sole employer in Massachusetts, one workers’ compensation policy was sufficient in the Bay State, which is where we were (and still are) based. At least, that was the advice our broker gave us. Unfortunately, the regulation changed. That was the bad news. The really...


Understanding Employment Law in Selling PEO

If you have a desire to sell larger deals in the PEO space, you will interact with human resources professionals. You must be able to speak their language and you must be knowledgeable in employment laws and regulations. This knowledge will make a difference in your credibility with HR professionals. Note: I am not an attorney, but I have studied employment laws and regulations in the HR and PEO context. This article is intended as a starting point. Please consult your PEO’s inside or outside counsel for more depth.

Start-up Guide

PEO Start-Ups

Starting a new business venture is a leap of faith. While it is exciting to start a PEO, there is a lot to know and do before opening the doors. This article addresses some of the practical and legal considerations involved in starting a PEO.


The Inside Word

It’s a Well-Known Washington Adage that if You’re Not at the Table, You’re on the Menu

The Federal Government Affairs Committee, under the leadership of Committee Chair Dawn Davidson Drantch of Alcott HR and NAPEO VP of Federal Government Affairs Thom Stohler, has a full plate of legislative and regulatory action items for 2018.

NAPEO Notebook

NAPEO’s PEO Capitol Summit, Raising the Industry’s Profile, and Member Involvement Patrick J. Cleary

Statistically speaking, many of you reading this will make your way to Washington, D.C., later this month for our annual PEO Capitol Summit. For those of you who make the trek, you won’t be disappointed. We’ll have the usual agenda packed full of legal updates—the best lawyers in the industry presenting on a wide variety of topics that impact you and your PEO every day. Because we’re in Washington, we’re also able to bring in the acting chair of the Equal Employment Opportunity Commission (EEOC) to speak to us as well, so we’ll get some sense of what’s going on there straight from the horse’s mouth.

Special Report

New NAPEO Conflicts of Interest Guidelines Thom Stohler

When NAPEO members discuss engagement on legislative and regulatory actions of the federal and state government, the processes used by the Federal Government Affairs Committee (FGAC) and the State Government Affairs Committee (SGAC) are designed to achieve consensus and a unified industry position. However, there are occasionally situations in which a NAPEO member may not agree with the position the association is taking on a particular issue, but otherwise is in alignment with the association.

Up Front

NAPEO’s Comprehensive Market Research Sheds Light on Potential PEO Market Kerry Carruthers

NAPEO’s largest-ever market research project is now complete and it provides a wealth of fascinating insight about small and mid-size business owners and their understanding of the PEO industry, as well as barriers to PEO use and opportunities for market share growth. This groundbreaking research will help NAPEO refine and target its national visibility-raising efforts on behalf of the industry and develop tools and resources to help NAPEO members tell the PEO story and speak with a common language.

Legal Q&A

CPEO Controlled Group Licenses, Paid or Unpaid Interns Farrah L. Fielder, Esq.

Q. We have not heard anything new on the IRS’s certified professional employer organization (CPEO) program. Have there been any modifications lately? A. Yes, there have been modifications, specifically with regard to controlled groups. In the past, there was no option for PEOs in controlled groups to apply for controlled group licenses. In an update to the IRS CPEO website in early April 2018, the IRS put forth the “controlled group license,” an option for PEOs within controlled groups that would allow...

PEOs in the Community

Einstein HR Chris Chaney

According to estimates from The American Society for the Prevention of Cruelty of Animals (ASPCA), nearly 6.5 million animals will be housed in shelters during 2018. Sadly, the ASPCA also estimates that around 1.5 million of these animals will be euthanized, a heartbreaking reality to animal lovers all around the country. Fortunately, the ASPCA also estimates that a little more than 3 million pets are adopted from shelters each year, giving these pets loving and caring homes. Layne Davlin, president of Duluth, Georgia-based NAPEO member Einstein HR, counts himself among animal lovers doing their part to help save pets trapped in shelters.

PEO Spotlight

Insperity, Inc.: Richard G. Rawson Chris Chaney

“I was president of the association [NAPEO] at the turn of the millennium. We had approximately 700 members; it was quite a big deal,” recalled Richard G. Rawson, president of NAPEO member and Houston-based Insperity, Inc. Rawson’s term as president of NAPEO capped a decade of association leadership marked by his most lasting achievement: the creation of uniform financial reporting standards for the industry.

The Big Picture

Techlash Raises Questions, Carries Risks Thomas J. Donohue

Recent concerns over data privacy have highlighted a sense of unease that Americans feel about the increasing power of technology companies in our economy and our lives. Many of the concerns contributing to this anxiety are legitimate and pose important legislative and regulatory questions. In seeking to answer these questions, however, policymakers and regulators should exercise caution to avoid inflicting lasting damage on our economy and America’s global competitiveness brought about by the ever-evolving tech sector

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