PEO in Indiana [2024]

They say that building a business requires wearing many hats, but eventually, you may need help to continue scaling. A professional employer organization (PEO) is a company that collaborates with your business to reduce administrative demands by managing HR functions like payroll services, benefits administration, compliance, and workers’ compensation insurance.

Using a PEO service can benefit Indiana-based businesses by helping them stay compliant with local minimum wage laws, leave of absence requirements, and other state-specific labor and employment laws. But there are many other potential benefits to partnering with a PEO—and we’ll cover them in this article.

When deciding on a PEO provider, it’s crucial to thoroughly assess your options. For small businesses and startups, a PEO can help you keep HR costs low and offer access to better benefits at affordable rates. Rippling PEO provides convenient solutions, from automated state tax registration to remote laptop management, making hiring and onboarding people in Indiana and across the country easy and fast. 

Benefits of using a PEO in Indiana

Using an Indiana PEO offers business owners numerous advantages, including reducing administrative HR work, gaining access to more cost-effective benefits, and unlocking valuable support and expertise.

Offload administrative HR work

When you join a PEO, it co-employs your workforce, meaning you divide up employer responsibilities. In a co-employment relationship, your company keeps control over hiring, pay, strategy, and business operations such as R&D, marketing, sales, and customer support.

On the other hand, the PEO takes over the company's human resources work. In order to handle employment-related tasks, the PEO employs the workers under its own federal tax identification number (EIN). The PEO then takes on payroll, HR compliance, benefits, and other administrative duties. 

PEOs use a combination of technology, expertise, and established processes to streamline HR management, saving your business time and money in the process.

Better employee benefits, at a lower price

PEOs provide small businesses with access to comprehensive employee benefits plans that can include health insurance, life and disability insurance, retirement plans, dependent care, commuter benefits, and workers’ compensation. PEOs help businesses attract and retain top talent by offering access to comprehensive and affordable benefits, which, due to the cost, can be difficult for small businesses and startups to provide independently.

A study conducted by the National Association of Professional Employer Organizations (NAPEO) found that using a PEO resulted in an average cost savings of $1,775 per employee per year. The average PEO costs $1,395 per employee, which means PEOs can deliver an annual ROI of 27.2%.

Under the Affordable Care Act (ACA), any business with at least 50 full-time employees must provide their staff with health insurance benefits. A PEO can help Indiana businesses meet this requirement by providing their employees with access to healthcare benefits that fulfill the federal mandate—plus any other benefits they need to satisfy regulatory requirements or simply want to offer to meet their employees’ needs.

Worry-free compliance with Indiana laws

A PEO can help you comply with not only federal labor and employment laws like the ACA, but also complex and constantly changing state-level and local Indiana laws. For example, Indiana has stricter workers’ compensation laws than many states, requiring most employers to purchase workers’ comp for all employees, including minors and temporary workers.  

It can be challenging to keep up with different regulations in different states, especially if you employ remote workers in various locations. Rippling automatically detects workers’ compensation violations based on where each employee is located, so you never have to worry about falling out of compliance with local regulations. But a PEO can also assist with legal and compliance support beyond just workers’ comp:

• Payroll regulations that require proper classification of employees and contractors, accurate issuance and filing of tax forms, timely reporting, collection, and depositing of payroll taxes, and compliance with wage laws, such as minimum wage and overtime requirements
• Benefits compliance with Indiana's laws and federal regulations, such as the ACA, COBRA, FSA, HSA, and other benefits-related laws, is required
• Labor laws that require employers to follow EEO laws, display labor posters as the state requires, and more

PEO services that offer compliance support can be invaluable to small businesses because violating the law can attract costly fines and penalties. The IRS estimates that 40% of small businesses pay payroll penalties yearly.

Dedicated support team

By partnering with a PEO, you gain access to their wealth of knowledge and resources, which is particularly valuable for small businesses and startups that may lack those resources internally. A PEO can help you facilitate your HR processes and provide guidance on risk management, creating an employee handbook, training your managers, and more. By partnering with a PEO, you can save time and money on your HR processes and boost your team’s ability to handle any HR situation.

What to consider when evaluating a PEO service in Indiana

When choosing a PEO service in Indiana, consider these factors to find the right one for your business:

• Your business needs. Considering your industry and team size, what offerings do you need from your PEO? Here are a few common ones:
• HR outsourcing
• Payroll processing
• Tax filing and compliance
• Time and attendance tracking
• Benefits administration
• Safety compliance and risk management
• Recruiting and onboarding
• Regulatory compliance
• Your budget. Different PEOs offer different pricing structures, which can be either a per-employee per-month fee or a percentage of each payroll run. Consider your business's future growth plans and whether you’ll still be able to afford the PEO as your headcount increases.
• Experience and reputation. Have other businesses in Indiana worked with the PEO before? Is the PEO registered with the state? Read reviews from past and current clients on G2 and Capterra to make sure others had positive experiences. 
• Benefits. Ensure that the benefits plans you can access through the PEO align with your employees' wants and needs.
• Benefits renewal rates. Choosing a PEO that’s transparent about the cost of benefits is essential. Some PEOs may increase their renewal rates after the first year, leaving businesses with unexpected costs—or needing to find a new PEO after just one year. To avoid this, look for a PEO that publicizes how its rates change so that you can predict any potential increases.
• Integrations. Will the PEO’s technology disrupt your company's workflow, or will it work seamlessly with your existing processes and tools?
• Does the PEO specialize in specific industries? If your business operates within a specialized industry, it can be beneficial to partner with a PEO with experience in that field.
• Does the PEO specialize in specific legal or compliance issues? Find a PEO that can help your business comply with federal and state regulations and has extensive experience dealing with compliance issues.
• Your exit strategy. Eventually, you may decide to terminate your relationship with a PEO. You may outgrow the solution or decide to look for different offerings. Unfortunately, many PEOs can be difficult to leave. They may require you to overhaul your HR systems and processes completely, which can be time-consuming. That's why it's a good idea to consider this possibility before signing on the dotted line for PEO onboarding.

Why Rippling PEO is the right choice for your Indiana business

Unlike most PEO companies, which operate on software built in the 1980s, Rippling PEO runs on modern, fast, and easy-to-use software. It’s the first PEO to sync HR, IT, and Finance in one platform, so all your admin work becomes simple and streamlined—from 90-second onboarding to remote IT management. 

We handle all your compliance tasks, including setting up and managing your tax accounts and flagging overtime violations. You’ll also get access to Fortune 500-quality benefits, from healthcare insurance policies to workers’ compensation insurance—all at affordable costs.

With Rippling, you get:

• Essential tools to manage remote teams, including tax filing, paperless onboarding, and device management
• A single hub for HR, IT, and Finance
• Robust and tailored reporting solutions for all kinds of employee data
• Access to exceptional benefits plans with below-average, predictable renewal rates that are transparent 
• Automatic detection and flagging of compliance violations with recommended solutions for federal, state and local regulations
• Automated processes for risk management, including ACA and COBRA administration, harassment training, and digital labor law posters sent to employees
• Access to hundreds of HR resources, guides, and templates

Switching to in-house HR operations with Rippling PEO is easy. Unlike other PEOs, the process is seamless and hassle-free. You can switch to our all-in-one workforce management platform without losing any data or integrations, while your employees can continue using their existing logins to access Rippling.

FAQs about PEOs in Indiana

What is a PEO, and how does it work?

A professional employer organization (PEO) provides businesses with comprehensive HR services, including payroll, benefits administration, employee management, and assistance with compliance. Modern PEOs automate these services, delivering time savings and access to better benefits. PEOs use a co-employment model, where the PEO legally becomes the employer of the company’s workforce for tax purposes.

How does a PEO arrangement affect control over my employees?

Under a co-employment relationship with a PEO, your business retains control over day-to-day operations and management of all its employees—including who you hire and fire and how much you pay them.

What is a Certified PEO?

A Certified PEO (CPEO) is a type of PEO that has met requirements established by the Internal Revenue Service (IRS) related to its background, expertise, finances, and reporting. It's important to note that certification is voluntary and doesn't represent an endorsement by the IRS. Instead, it shows that a PEO has passed a series of assessments. The IRS lists all CPEOs on its website, including those that have been suspended or had their status revoked.

In the past, businesses received certain tax benefits with a CPEO status. However, these benefits are now mostly obsolete.

What size company can benefit from a PEO?

If you're a small to mid-sized business or startup, a PEO can be incredibly helpful. By partnering with a PEO, you can save on administrative costs, streamline your HR tasks, and free up your HR team to focus on more important, strategic work. PEOs also offer access to high-quality benefits plans that you might not be able to offer on your own—making it easier to compete with other businesses to attract and retain top talent.

How does a PEO charge for its services?

PEOs typically charge either a per-employee per-month fee or a percentage of your payroll.

What is the implementation process, and how long does it take to go live?

The PEO will gather all the necessary information about your employees, including their payroll data, employment records, and benefits information, and set up their systems to handle everything seamlessly. They can integrate their technology with your existing systems to make the transition smoother if needed.

The timeframe for implementation varies depending on the size and complexity of your business needs, typically ranging from a few weeks to a couple of months.

Are PEOs regulated?

PEOs are regulated by federal and state laws and may choose to pursue accreditation by industry organizations for additional credibility.

Are PEOs in Indiana required to have special certifications or licenses?

PEOs in Indiana must register with the Indiana Department of Insurance (IDOI) as required by the Indiana Code (IC) 27-16 and Rule 760 IAC 1-73. There are two types of registrations:

• If the PEO is based in Indiana or a state with less restrictive licensure or registration requirements than Indiana, it must register fully with the IDOI
• PEOs in Arkansas, Colorado, Florida, Montana, New York, Oklahoma, North Carolina, South Carolina, Texas, Utah, and Wisconsin can do a limited registration

For more information or to apply for Indiana state registration, go to the Indiana Department of Insurance site.

What happens if I want to terminate my relationship with a PEO?

Ending a partnership with a PEO can be a complicated process. Typically, ending the relationship requires removing the PEO systems from your business, which can be painful and disruptive. You’ll need to find new systems to handle payroll processing, benefits administration, and other previously PEO-managed processes.

With Rippling PEO, it’s easy to switch to our all-in-one workforce management solution. All your HR, payroll, and employee data will be saved in your account, and your integrations with other tools and systems will remain intact. Your employees can still use the same logins and access Rippling as they always have.

In what states is Rippling PEO available?

Rippling PEO is available across the US in all states.

Disclaimer: Rippling and its affiliates do not provide tax, accounting, or legal advice. This material has been prepared for informational purposes only, and is not intended to provide or be relied on for tax, accounting, or legal advice. You should consult your own tax, accounting, and legal advisors before engaging in any related activities or transactions.