PEOs... Why Become Accredited

Frequently Asked Questions... Facts & Myths

ESAC Questions
Questions about ESAC's accreditation processes and services? Following are a few of the most frequent questions and misperceptions about ESAC accreditation that PEOs have had over the years. Please contact us if you have additional questions or concerns!


PEO mythsWon't my competitors on the ESAC board see all the confidential information about my PEO?

PEO factsAbsolutely no one affiliated with any PEO is involved in ESAC's application review or approval processes. Completed applications are reviewed by ESAC's compliance committee comprised of independent directors who are not affiliated with a PEO.

PEO mythsI've been told that startup PEOs are not eligible for accreditation.

PEO factsStartups can definitely qualify for accreditation by using ESAC standards as a foundation for their new operations and by submitting an audited balance sheet that meets ESAC’s financials standards. Accreditation provides a great opportunity for start-ups to:

  1. Develop a solid operational foundation,
  2. Increase sales using proven sales and marketing tools, along with the credibility that comes from ESAC's independent verification of your PEO's reliability, and
  3. Obtain valuable assistance with regulatory compliance requirements.

PEO mythsMinor issues with my application will cause it to be rejected.

PEO factsESAC provides a qualification checklist that gives you a quick overview of the primary compliance requirements. If your PEO can meet the majority of these requirements, ESAC will work with you every step of the way to successfully complete the application process and help you meet all requirements for approval.

PEO mythsI don't want to deal with the hassle or expense of quarterly financial audits.

PEO factsAccreditation only requires that an independent CPA audit your PEO's financial statements on an annual basis. Internally-produced financial statements are submitted for quarterly ongoing monitoring.

PEO mythsMy PEO can't qualify because it has a self-insured and/or loss-sensitive worker's compensation plan.

PEO factsThere is no prohibition against self-insured or loss-sensitive workers' compensation policies or plans, so long as adequate reserves are reflected in your PEO's financials, and the plan is either provided by a licensed insurance company or, if self-insured, approved by each state in which coverage is provided. Reserve adequacy must be verified either with a certified actuary's opinion, or, if the plan is fully insured, by a licensed insurance carrier, by a corporate underwriter or actuary who is employed by the carrier.