PEOs... Why Become Accredited

PEO Qualification Checklist

Any PEO can become accredited if it sets the goal to do so and does what it takes to meet important but reasonable financial, operational and ethical/professional standards. The application process is not complicated and approval is not just a "yes-or-no" proposition.

ESAC staff and advisors keep you informed and will work with you every step of the way, including help with correcting any deficiencies, before your application is submitted for approval by ESAC's accreditation committee.

Your application and all of your information is kept totally confidential, and the fact that you have applied is not disclosed to anyone outside of ESAC and its service providers until the accreditation committee approves your application.

Select "Yes" or "No" for the following 7 questions about your PEO to quickly determine if your PEO currently qualifies for ESAC accreditation.

1. PEO and Controlling Persons have a verifiable history of ethical and legal conduct and financial reliability, including operating in compliance with federal and state laws applicable to PEOs?
2. PEO (or PEO Group) has individual, combined or consolidated financial statement(s) covering all PEO entities under common control audited by an independent CPA and demonstrating net worth equal to the greater of $100,000 or 5% of total adjusted liabilities and positive working capital? (Start-ups can submit an audited beginning balance sheet and business plan with financial projections similar to those required by a bank for a new business loan.)
3. Can or is willing to provide the quarterly certification by an independent CPA of the timely payment of federal and state payroll taxes, PEO group health and workers’ compensation insurance premiums, and contributions to employee retirement plans. [Note: A copy of an independent CPA’s certification provided to a federal or state agency is acceptable in lieu of all or part of the above requirement to the extent such certification verifies timely payment.]
4. Establishes and maintains a co-employment service relationship by assuming key employer attributes for employees working at client locations as demonstrated by a written service agreement and employment forms, policies and procedures?
5. Provides or otherwise ensures that all worksite employees are covered in a regulatory compliant manner by workers' compensation insurance (or equivalent coverages as permitted by state law)?
6. Does not provide PEO services to any unrelated PEO or staffing company?
7. If PEO sponsors or participates in any self-insured health plan, does the plan:
  1. Comply with applicable state and federal laws?
  2. Have adequate excess loss coverage?
  3. Use a TPA licensed as required by state law to adjust and pay claims?
  4. Disclose the self-funded nature of the plan to each client and covered worksite employee?
  5. Maintain actuarially-sound financial reserves?
  6. Hold plan assets, including all participant contributions, in Trust?
Remember that your application and all of your information is kept totally confidential and the fact that you have applied is not disclosed to anyone outside of ESAC and its service providers unless you are approved. All financial information is viewed solely by ESAC's financial and legal advisors, ESAC's surety carrier and ESAC staff. No one affiliated with a PEO sees any of your client information. All ESAC directors, staff, and service providers are bound by comprehensive non-disclosure agreements.