PEO in Maine [2024]


Feb 21, 2024

Professional employer organizations (PEOs) allow businesses to outsource HR tasks like payroll, benefits administration, compliance management, and workers’ compensation insurance. They can also provide business owners and their employees access to better and more affordable benefits.

Small businesses may struggle to keep up with the State of Maine's complex state and local employment laws—such as paid earned leave, mandatory niche workplace safety, and minimum wage changes. A PEO service can help businesses navigate these legal requirements, freeing up their time and resources to focus on core operations.

This article will guide you through the benefits and features of partnering with a PEO, plus how to choose the right one for your business needs. Rippling PEO can help with compliance tasks, remote IT management, and more—making hiring and onboarding easier in Maine and beyond.

Benefits of using a PEO in Maine

The advantages of using a Maine PEO include reducing administrative HR work, lowering your benefits costs, accessing professional HR support, and more.

Offload administrative HR work

When you partner with a PEO, you enter into a co-employment relationship, sharing employer responsibilities with the PEO. Under this arrangement, you become the worksite employer and are still responsible for your company's overall business operations—including research and development, marketing, sales, and customer support. You're also responsible for hiring and terminating employees and deciding their salaries.

A PEO takes on the role of administrative employer, meaning it legally employs your workers under its own federal employer identification number (EIN). This allows the PEO to handle HR-related tasks, such as managing payroll and ensuring compliance with legal regulations.

PEOs simplify HR management through technology and expertise, freeing up your internal HR team to focus on strategic work that drives your business forward.

Better employee benefits, at a lower price

One significant benefit of using a PEO is that it allows you to access better employee benefits. More than 500 PEOs currently operate in the US, according to the National Association of Professional Employer Organizations (NAPEO). These PEOs co-employ 4.5 million workers at 200,000 companies, giving them collective bargaining power when negotiating their rates with insurance providers. This, in turn, helps smaller companies partnering with PEOs gain access to lower-cost benefits.

PEOs also use economies of scale to access better employee benefits, including robust plans that can offer health insurance, disability insurance, life insurance, mental health support, worksite benefits, commuter benefits, dependent care, retirement benefits, and more. While difficult to access independently, such comprehensive benefits plans can help small businesses attract and retain top talent.

The Affordable Care Act (ACA) requires businesses with 50 or more full-time employees to offer health insurance benefits. A PEO can help Maine businesses comply with the law by helping them access third-party healthcare plans and other benefits, often at lower rates.

Worry-free compliance with Maine laws

When a company partners with a PEO, it can significantly reduce the burden of complying with federal labor and employment laws, as well as Maine's state-level and local laws. These regulations can be complex and change frequently.

For example, take Maine’s minimum wage. As of January 2024, the minimum wage in Maine has increased to $14.15 an hour, which is higher than the federal minimum wage—and slightly higher than the previous year.

Navigating minimum wage for remote employees in Maine and elsewhere can be challenging. With Rippling PEO, minimum wage violations based on employees' locations are automatically detected, so you can rest easy knowing you’re always in compliance with local laws.

Complying with minimum wage regulations is just the beginning. PEOs also offer legal and compliance support with: 

  • Payroll regulations, including correctly classifying workers and complying with federal, state, and local tax regulations by issuing and filing the necessary forms
  • Benefits laws, including helping you navigate Maine's new paid family medical leave law, plus federal laws like the ACA, COBRA, FSA, HSA, and other benefits-related regulations
  • Labor laws, including supplying workers' compensation insurance, guiding you through the maze of Equal Employment Opportunity (EEO) laws, and displaying state-required labor posters

Businesses in Maine that fail to comply with the law can face hefty fines and penalties. Many businesses struggle with compliance issues, with the IRS estimating that 40% of small businesses face payroll penalties each year. However, partnering with a PEO can help reduce your compliance risk.

Dedicated support team

PEOs can be a valuable asset to startups and small businesses. With their expertise in human resources, partnering with a PEO can offer advice on various HR-related topics, including streamlining your benefits administration, training managers, reviewing your safety practices, and more. By working with a PEO, you can make your HR processes more efficient and focus on growing your business.

What to consider when evaluating a PEO service in Maine

Businesses in Maine have a variety of PEO companies to choose from. When selecting a service, consider these factors to find the right one for your business:

  • Your business needs. Different businesses require different PEO services, so selecting a PEO that offers what you need is crucial. PEOs typically handle:
    • Payroll services and processing
    • Tax withholding, filing, and compliance 
    • Benefits administration 
    • Recruitment and onboarding for new employees
    • Safety and risk mitigation in the workplace
    • Monitoring and tracking time and attendance
    • Compliance with regulations
    • HR outsourcing 
  • Budget. PEOs have different pricing models, such as per-employee per-month fees or a percentage of each payroll run. Consider your business's future growth before choosing a PEO to ensure you can afford the cost as your workforce expands.
  • Reputation and experience. Does the PEO have a good reputation? Check websites like G2 and Capterra for insights into the PEO’s reputation and its experience working with Maine-based businesses.
  • Benefits. Make sure the benefits a PEO helps you access meet the needs of both your company and its employees.
  • Benefits renewal rates. Ensure that the PEO you choose is transparent about the cost of its plans and any potential future price increases. Some PEOs surprise their clients with a significant increase in renewal rates after the first year. If you decide to switch to a different PEO because of these unexpected rate hikes, you'll have to start the process over again after just one year. Choose a PEO that discloses how its rates vary so you'll know of future increases.
  • Integrations. Verify how the PEO will integrate with what you already have—your existing systems, tools, and technology.
  • Does the PEO focus on certain industries? Using a PEO with expertise in a specialized industry can be helpful for businesses operating in that area.
  • Does the PEO specialize in specific compliance or legal concerns? If your company needs to comply with federal or state regulations or address legal issues, selecting a PEO with specialized expertise can be beneficial.
  • Your exit strategy. Leaving a PEO can be challenging since it typically requires you to remove all its systems. Consider asking the PEO what its offboarding process is like so you can save a few headaches down the road should you shift to another software or decide to bring HR functions in-house.

Why Rippling PEO is the right choice for your Maine business

Rippling PEO separates itself from the rest as the first PEO to sync HR, IT, and Finance into one platform. Our modernized, fast, and user-friendly software helps with everything from 90-second onboarding to remote IT management. 

With Rippling, you don't have to worry about compliance mishaps. We automatically set up state and local tax accounts and flag minimum wage and overtime violations. Plus, Rippling PEO can provide access to big-company benefits at affordable prices.

With Rippling, you get: 

  • HR, IT, and Finance in a single platform
  • Robust and easily customizable reporting on any workforce data
  • Remote team management tools for state and local tax registration, paperless onboarding, device management, and more
  • Access to top-quality benefits plans, plus below-average, predictable renewal rates
  • Automatic notification of federal, state, and local compliance infractions, along with recommended plans to resolve them
  • Automated compliance and risk management processes, including ACA and COBRA administration, anti-harassment training, and distributing digital labor law posters to your workforce
  • Access to hundreds of helpful HR resources, guides, and templates 

With Rippling PEO, transitioning back to in-house HR is a breeze. Unlike with other PEOs, all you have to do is switch off the PEO and transition seamlessly to our all-in-one workforce management platform. You keep all your HR, payroll, and employee data without worrying about starting over. Your integrations will remain in place, and your employees can continue to use Rippling as they always have. 

FAQs about PEOs in Maine

What is a PEO, and how does it work?

A professional employer organization (PEO) is a company that partners with another company to provide comprehensive HR solutions. These solutions typically include HR management like payroll, benefits administration, and compliance support. When a company partners with a PEO, the partnership operates under a co-employment model, where the PEO assumes legal responsibility for administrative HR tasks. 

How does a PEO arrangement affect control over my employees?

Once you enter a co-employment relationship, the PEO handles HR tasks like payroll processing and other employment-related responsibilities. Your company retains authority over day-to-day operations, employee management, and company strategy.

What is a Certified PEO?

A Certified PEO (CPEO) is a type of PEO that has met specific IRS requirements related to its background, expertise, finances, and reporting. It's worth noting that CPEO status is not an endorsement by the IRS but rather an indication that the PEO has passed a series of assessments. At one point, CPEO status offered tax benefits to companies, but these days, the benefits are mostly obsolete.

What size company can benefit from a PEO?

Businesses of all sizes can leverage a PEO to outsource their HR work, reduce their administrative load, and allow their internal teams to focus on growing their business. That said, small to mid-sized businesses get the added perk of using PEOs to access high-quality, third-party benefits plans that may be difficult for smaller companies to obtain on their own.

How does a PEO charge for its services?

The cost of using a PEO may vary based on the number of employees and services provided. PEOs typically charge a flat fee per employee or a percentage of the total payroll costs.

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

Once you sign the contract, the PEO will typically request information about your employees, such as employee payroll data, employment records, and benefits. After collecting this data, the PEO will establish systems to handle your HR, payroll, and benefits administration. The PEO will also incorporate its technology with your existing systems. It may conduct onboarding sessions with your employees to explain new procedures, provide training, and offer ongoing support.

Timelines depend on the size of your business and the complexity of the services required, ranging from just a few weeks to several months.

Are PEOs regulated?

Yes, PEOs are regulated federally and by the state. They can also choose to gain additional accreditation from industry organizations to enhance their standing.

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

Yes. Maine PEO companies must register with the Maine Bureau of Consumer Credit Protection (BCCP). While employee leasing is a different model than co-employment, the Maine BCCP lumps the two types of employment agencies together for registration purposes.

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

If you ever decide to bring your HR functions in-house or switch to a different provider, many PEO companies jam you up with a difficult transition. You may need to spend months setting up a new human resources system to manage your payroll, benefits administration, and other tasks that the PEO previously handled on your behalf.

With Rippling PEO, you can just switch off the PEO and move to our all-in-one workforce management platform with no disruption to your systems, data, or integrations.

In what states is Rippling PEO available?

Rippling PEO is available in all US 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.

last edited: February 21, 2024

The Author

Muriel Vega

A freelance tech and B2B writer based in Atlanta, Muriel focuses her work on human resources and workplace trends and creating engaging content for SaaS companies. She has traveled the world, but her favorite place to work is Mexico City.