Choosing the right PEO

What should you look for?

You want to know that the PEO you partner with is reputable, reliable and has sound business practices.

Ensuring that you're choosing a reliable PEO can require significant due diligence processes. At a minimum, you or a trusted advisor should obtain and review the following important operational documents and functions:

Audited financials

Audited financial statements from an independent CPA should cover all entities under common control and reflect adequate net worth and working capital as well as appropriate financial reserves for any loss sensitive or self-insured benefit or insurance plans. You may require the evaluation services of an experienced CPA with knowledge of the PEO industry and loss sensitive insurance plans.

Insurance & benefit plans

Insurance and benefit plans offered by a PEO should comply with applicable federal and state laws and provide coverage for the states where you have employees. This evaluation likely will require the services of an experienced attorney specializing in insurance law or confirmation by each state's department of insurance.

Insurance evidence

Insurance coverage confirmation should be provided for all plans offered under your service contract with the PEO, including workers' compensation, health insurance, E&O, fidelity and general liability.

Carrier qualifications

Insurance carriers and/or third-party administrators must be authorized to do business in the states where you have employees. Confirm each carrier's credit rating for each of the insurance products it offers via a service such as A.M. Best and research its standing with the National Association of Insurance Commissioners.

State PEO licensing

If your company's home state and any states where employees are located has PEO registration or licensing requirements, verify with each state's regulatory agency that the PEO is in good standing.

Responsible leadership Verify via background investigations that the PEO's leadership is honest, ethical and has a history of compliance with state and federal law.

Who has time to find and research all of that?

A much easier and more efficient way to confirm a PEO's reliability is to verify its accreditation by ESAC. You will save yourself and/or your trusted advisors significant time and resources in conducting the due diligence process. You will also have the advantage of ESAC's ongoing confirmation of the PEO's compliance with standards that are important in your service relationship.

PEOs that have voluntarily elected to become accredited have provided ESAC with the comprehensive data needed to confirm compliance with > 40 industry financial, ethical and operational accreditation standards and to participate in ESAC’s > $15M client assurance program. 


Contact us for the ESAC Edge

Nearly 73% of all PEO industry wages are paid by ESAC accredited PEOs. Accreditation matters when choosing a reliable PEO partner!

Let us know if you'd like to discuss how the services of an accredited PEO can benefit your company:

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Employer Services
Assurance Corporation

PEO Reliability starts here.
ESAC’s accreditation and financial assurance services provide confirmation of a PEO’s financial, ethical and operational reliability.
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