For years, those of us in the industry have sought that Professional Employer Organization (PEO) services be codified in the IRS tax code and have lobbied for the creation of a voluntary certification program for PEOs within the IRS.
On March 7, the industry took a major step in that direction. Senators Charles Grassley (R-Iowa) and Ben Nelson (D-Florida) co-sponsored the Small Business Efficiency Act in the United States Senate.
Pat Cleary, President and CEO of the National Association of Professional Employer Organizations (NAPEO) summed it up well: “The Small Business Efficiency Act (S. 479) will improve tax compliance and create needed certainty for small businesses so that they can focus on growing their companies while leaving benefits administration and tax compliance to the experts in the PEO industry,” he said. “Legislation is long overdue to recognize and certify PEOs, an important provider of solutions for small businesses on everything from healthcare to regulatory compliance.”
Passage of this bill would be great news for the PEO industry and the companies they serve. It is especially good news for those PEOs who already hold themselves to strict financial and operational standards as required by the Employer Services Assurance Corporation (ESAC).