New York Professional Employer Organization (PEO) Bond
What is a New York Professional Employer Organization Bond?
Professional Employer Organizations (also referred to as staff leasing company, employee leasing company, registered staff leasing company, and staff leasing services company) are required to register before they can enter into professional employer agreements with clients. This bond is an important requirement for the said registration.
Compliance of the professional employer organization to the Professional Employer Act is the reason for this bond. It includes the following:
- Paying the full amount of any taxes, wages, and benefits due to a worksite employee.
- Pay unemployment insurance as required by the unemployment insurance law.
- Provide a written professional employer agreement to its client.
- Provide required workers' compensation coverage for its worksite employees.
Aside from this bond, the initial and subsequent PEO registration should be accompanied by a Certified Public Accountant-prepared audited financial statement of the professional employer organization's most recent fiscal year.
This requirement is in pursuance to Section 921 Article 31 of the New York Labor Law.
How much does a New York Professional Employer Organization Bond cost?
Bond premium ranges from 1% to 10% of the bond amount depending on the Professional Employer Organization’s credit score and bond amount.
The minimum bond amount is $75,000.
Get your FREE SURETY BOND QUOTE HERE to know your bond premium.
How can I get a New York Professional Employer Organization Bond?
The first step is to apply for this New York PEO bond HERE!
We will immediately contact you once we have received the application. You will be informed of the required documents that you must immediately submit. These documents are needed for the next step of the bond process: Underwriting.
Our underwriter will thoroughly check the documents that you will submit. Our underwriter will assess the following:
- Your financial strength
- Your job/business performance history
- Your credit score
Once the underwriting process is fulfilled, you will be asked to sign an indemnity agreement. Once signed, the bond will be issued and sent to you.
How does a New York Professional Employer Organization Bond work?
This bond will serve as an enforceable agreement among three parties, namely:
Principal – New York Professional Employer Organization
Obligee – Commissioner of Labor of the State of New York
Surety – Surety Bond Company
Through this surety bond, the surety is guaranteeing the compliance of the Principal to its bonded obligations to its clients. No action will be taken against this bond as long as the Principal is complying with the provisions of Professional Employer Act and the rules set forth by the State of New York Commissioner of Labor.
If a violation happens, the Obligee will file a claim against this bond. The Surety will first check if the claim is valid. If it is, the claim will be settled. Once the Surety has settled the claim, the Principal will reimburse the Surety for the payments made.
Start your fast and convenient bond application HERE!