Professional Employer Organizations

For information for Professional Employer Organizations (PEO), please refer to the forms and bulletin below for guidance in preparing and filing your application. You may contact the Compliance Division if you need additional help or information.

Alternatively, under §23-92-414 of Arkansas Act 1750 (Arkansas Code), PEOs that are accredited by ESAC, which is a licensed Employer Assurance Service Organization (ESAO) in Arkansas, are not required to post the required $100,000 bond or submit the application and biennial renewal forms. Additionally, accredited PEOs receive a 50% savings on the fees required for the initial application and biennial renewals.

The following links are to the PEO Bulletin and forms to be used by PEO’s under Act 1750 of 2003, A.C.A. 23-92-401 et seq. (Arkansas Code):

• Bulletin 12-2009
• PEO Application (Form PEO-P)
• Group PEO Application (Form PEO-G)
• Initial and Renewal PEO Exempt Application (Form PEO-E)
• Employer Assurance Service Organization Application (Form ESAO-A1)
• Cross Guarantee Form
• Bond Form
• Change of Control of a PEO Form (Form PEO-C)
• PEO Renewal Application (Form PEO-PR)
• Group PEO Renewal Application (Form PEO-GR)
• Controlling Person Exhibit
• PEO Quarterly Report (Form PC EL – Quarterly Report)

Rule 81 has been issued regarding Employer Service Assurance Organizations.

Current Arkansas law and regulations provide for certain licensing requirements to engage in the business of a Professional Employer Organization (“PEO”). Act 1750 of 2003 updated and modernized the regulatory oversight of this type of profession and renamed these businesses “Professional Employer Organizations.”

A PEO is any person or legal entity engaged in the business of providing professional employer services by entering into a co-employment relationship which at least a majority of the employees of a client and providing professional employer services to the client or to a division or work unit of a client for its covered employees and in which the arrangement is intended to be, or is, ongoing rather than temporary in nature; and employer responsibilities, including the right of direction and control of the employees, are shared by the PEO and its clients.

Professional employer services do not include services performed by temporary employees or by persons determined to be independent contractors with respect to the recipient. Temporary help services are not professional employer services.

Other useful information for Professional Employer Organizations:

• The Department of Labor informational pamphlet on Multiple Employer Welfare Association (“MEWA”). Page 33 starts a significant discussion on when a PEO and the extent State law applies to them. You should also see, in conjunction with this paper the Commissioner’s Bulletins 4-2001 and 7-2002.
• By using our Company Search database you can search for licensed professional employer services organizations. You can also get a complete listing of every licensed professional employer organization doing business in Arkansas.