For PEOs, obtaining ESAC Accreditation is more than a one-time achievement. It’s a continuous process that requires vigilance, expertise, and strategic support. PEOs must constantly monitor their compliance status, ensuring that all aspects of their operations meet the stringent requirements set by ESAC. This vigilance helps build trust with clients, as they can be confident that the PEO is committed to maintaining high standards of service and compliance.
Why Ongoing Compliance Is Critical
Only about 10% of PEOs in the U.S. are ESAC-accredited — and maintaining that status is a powerful differentiator. Here’s why staying compliant matters:
- Client Trust: Accreditation signals financial soundness and operational integrity.
- Regulatory Confidence: ESAC’s standards evolve with changing laws and regulations.
- Risk Mitigation: Continued coverage through ESAC’s Client Assurance Program protects client interests.
- Business Growth: Accreditation supports stronger client retention and smoother sales cycles.
What Maintenance Involves
ESAC accreditation isn’t a “set it and forget it” milestone. It requires:
- Quarterly Reviews: Regular reporting and verification of financial and operational metrics.
- CPA Oversight: Independent audits by professionals familiar with PEO operations.
- Compliance Across Key Areas:
- Employment tax payments
- Retirement and benefit contributions
- Health insurance premiums
- Workers’ compensation (fully and self-insured)
Support for PEOs Maintaining ESAC Accreditation
Maintaining ESAC accreditation can strain internal resources, especially as regulations shift and operations scale. Assistance from third-party experts can alleviate these pain points through various support services:
- Quarterly Compliance Support: Assistance with preparation and review of documentation to meet ESAC’s reporting requirements.
- Audit and Assurance Services: Seek support from CPAs that specialize in PEO operations and can conduct independent verifications with precision.
- Process Optimization: Identify gaps and inefficiencies in your financial and operational workflows to ensure long-term compliance.
- Strategic Advisory: From tax planning to risk management, these supporting services provide insights that keep your PEO ahead of regulatory changes.
Stay Accredited With Confidence
Maintaining ESAC accreditation is a strategic investment in your reputation and growth. By investing in ongoing compliance and leveraging third-party support, you can navigate the complexities of accreditation with confidence and focus on what truly matters: serving your clients and scaling your business.
With Withum as your partner, you can navigate the complexities of compliance with clarity and confidence.
Author: Coral Lykkebak, CPA | [email protected]
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For more information on this topic, please contact a member of Withum’s Staffing and Consulting Businesses Services Team.
