PEO in New Jersey [2024]

Professional employer organizations (PEOs) can assist small and medium-sized businesses by simplifying and automating various HR tasks—including payroll, benefits administration, compliance, workers' compensation insurance, and so on. Moreover, utilizing a PEO enables businesses to access powerful yet cost-effective employee benefits.

As the fourth-smallest but eleventh-most populated state in the US, New Jersey is bustling with small businesses. Considering the state’s progressive income tax with its exemption quirks and city-by-city wage laws, employers must keep up with many regulations—and that’s only on the payroll front. 

In this article, we’ll show how a New Jersey PEO company can take all of that off your hands—and how to find the best one for your unique business needs. Rippling PEO, for instance, offers seamless hiring and onboarding in New Jersey and anywhere else you hire—from automatic state tax registration to remote device management.

Benefits of using a PEO in New Jersey

What can partnering with a PEO do for your business? Provide critical HR insight, lower your insurance costs, eliminate HR busy work, and more. 

Offload administrative HR work

When you partner with a PEO, you establish a co-employment relationship. With this arrangement, your company and the PEO jointly employ your workforce. You retain the role of the worksite employer, maintaining control over hiring and firing decisions, setting salaries, and directing day-to-day operations across marketing, sales, customer service, etc.

The PEO provider acts as an administrative employer, employing your workers under its federal tax identification number (EIN). It legally takes over employment-related HR tasks such as payroll services, administering benefits, ensuring compliance, and more.

By applying a mix of technology, expertise, and experience, PEOs take much of the weight of repetitive, manual tasks off of your HR team. With that, your HR team can dedicate more time to strategic initiatives that contribute to your company's success.

Better employee benefits, at a lower price

How can a PEO partnership enable businesses to offer great benefits packages at reasonable prices? It’s all about bargaining power. Today, PEOs co-employ 4.5 million people in the US—giving them lots of sway when it comes to negotiating benefits pricing. 

While PEOs don’t sell these benefits themselves, they leverage their scale to access them through third-party providers. Some of these benefits include health insurance, long-term disability and life insurance, workplace benefits, mental health support, retirement plans, and more. While these benefits can help you attract and retain top-tier talent, they’re typically out of reach for small businesses to offer on their own. A PEO can help you access robust benefits for your team at more favorable rates. 

Worry-free compliance with New Jersey laws

A PEO can assist you in adhering to federal regulations and the intricacies of state employment and labor laws in New Jersey. 

Between New Jersey’s changing minimum wage (going up from $14.13 per hour to $15.00 in 2024) and local employer payroll taxes, keeping up with wage management alone can be time-consuming for employers. 

A full-service PEO like Rippling can save you a lot of that time by automatically detecting and alerting you to minimum wage violations based on your employees' locations.

Well beyond wage laws, PEOs also provide legal and compliance support for:

• Payroll regulations, including proper employee and contractor classification, issuing and submitting tax documents, complying with Newark and Jersey City’s local payroll taxes, overtime requirements, and more  
• Benefits laws, including following New Jersey’s Family Leave Act (NJFLA), Security and Financial Empowerment Act (SAFE), Temporary Disability Insurance (TDI), along with any federal regulations—like the Affordable Care Act (ACA), COBRA, HSA, FSA, etc. 
• Labor laws, including the Occupational Safety and Health Administration’s (OSHA) New Jersey State Plan, Equal Employment Opportunity (EEO) laws, and exhibiting state-mandated labor posters

Violating any of the laws above can land you in legal trouble. In fact, just failing to submit payroll taxes on time in New Jersey can result in hefty penalties, ranging from 5% to 25% of the balance due—before interest. With compliance support from a PEO service, you’ll never have to worry about legal run-ins. 

Dedicated support team

By partnering with a PEO, you can tap into their deep human resources expertise. This is particularly valuable for small businesses and startups without the same robust internal resources. A top PEO doesn’t just aid in time and cost savings; it can also provide advice on optimizing benefits administration, training managerial staff, developing safety procedures, and addressing many other HR challenges.

What to consider when evaluating a PEO service in New Jersey

New Jersey has many PEO service providers to choose from. To select the best PEO for your company, consider the following factors:

• Business needs: Identify what you require from a PEO—what kind of administrative services do you need? Common services include:
• Payroll processing
• Tax filing and compliance
• Benefits administration
• Recruitment
• Onboarding
• Safety compliance and risk management
• Time and attendance tracking
• Regulatory compliance
• HR outsourcing
• Budget: PEOs typically charge either a per-employee per-month fee or a percentage of each payroll run. Consider your growth plans and whether the PEO's cost will remain manageable as your workforce expands.
• PEO experience and reputation: Research to see if the PEO has experience with New Jersey business owners. You also want to ensure its overall standing in the industry is good. Software review sites like G2, Capterra, and PeerSpot can provide insights from real clients.
• Benefits offered: When evaluating options, assess the quality, variety, and affordability of the benefits plans each PEO offers access to. They should match your business’s and employees' needs.
• Benefits renewal rates: Investigate the PEO's renewal rate increases, especially after the first year. You don’t want to face unexpected costs or have to look for a new provider in just 12 months. 
• System integrations: Can the PEO work with your current systems, tools, and technology? 
• PEO industry specializations: If your business is in one of New Jersey’s common industries, such as tech manufacturing or healthcare, you may want to look for a PEO with specific experience in that field.
• Legal and compliance expertise: If your business needs to meet particular federal or state regulatory requirements or has other specialized legal issues, a PEO specializing in those areas can be beneficial.
• Your exit strategy: Consider the process of disengaging from the PEO should you ever want to leave—whether it’s to move HR processes internally or simply switch HR service providers. Some PEOs make it challenging to part ways, requiring you to rip out their systems and start anew. Planning for this possibility beforehand is wise.

Why Rippling PEO is the right choice for your New Jersey business

Rippling PEO stands out as the first to integrate HR, IT, and Finance all in one platform. From rapid, 90-second onboarding to remote IT management, Rippling’s modern software dramatically simplifies everyday administrative tasks.

At Rippling, we handle essential compliance duties, such as establishing state and local tax accounts and automatically identifying minimum wage and overtime issues—while offering your team access to top-tier benefits at reasonable costs.

Rippling PEO gives you:

• A modern, unified platform for HR, IT, and Finance
• Access to high-quality benefits plans with stable, below-average PEO renewal rates
• Automated alerts for compliance issues at the federal, state, and local levels, along with corrective action plans
• Advanced, customizable analytics reports for understanding employee data
• Remote team management tools that help with state and local tax registration, paperless onboarding, and app/device management
• Automatic risk and compliance management, including ACA and COBRA administration, harassment prevention training, and digital labor law poster distribution
• A wealth of HR templates, guides, and other resources

Finally, if you ever choose to transition HR in-house, Rippling PEO makes the process uniquely smooth. Unlike other PEOs that necessitate a complex switch, Rippling allows for an easy move to our comprehensive workforce management platform. Your existing HR and payroll data remains in your account, integrations stay intact, and employees retain their existing logins—so they can use Rippling the same way as before.

FAQs about PEOs in New Jersey

What is a PEO, and how does it work?

A professional employer organization (PEO) is a firm that collaborates with businesses to offer HR solutions such as payroll, benefits administration, risk mitigation, and compliance support. Typically, they use a co-employment model, wherein the PEO becomes the legal employer of a company's workforce for tax purposes.

How does a PEO arrangement affect control over my employees?

While the PEO manages HR responsibilities and employment-related tasks, your company will maintain control over hiring and employee management, business decisions, and daily operations. 

What is a Certified PEO?

A Certified PEO (CPEO) meets specific criteria set by the IRS. It’s a voluntary certification, and it doesn’t indicate any special IRS endorsement. Before certain regulations were enacted, using a CPEO offered tax advantages, but today, those benefits are largely gone.

What size company can benefit from a PEO?

PEOs benefit companies of all sizes, but they're especially advantageous for small to medium-sized enterprises. In fact, the average business using a PEO has about 16 worksite employees for whom the PEO handles HR. 

They help these businesses reduce HR administrative costs and provide access to superior benefits plans—that might otherwise be unattainable—among other things.

How does a PEO charge for its services?

PEOs usually charge a monthly flat fee per employee or a percentage of the total payroll. The total cost typically depends on the PEO's range of service offerings and your employee headcount. 

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

A PEO will usually collect essential information about your employees, including payroll, employment records, and benefits details. They’ll then set up systems for HR, payroll, and benefits administration, which may require integrating with your existing technology. Finally, the PEO may host employee onboarding and training sessions to get everyone proficient with the new workflows. 

The duration of these steps can vary from a few weeks to a few months, depending on your business size and the complexity of the PEO services.

Are PEOs regulated?

Yes, PEOs are governed by federal and state laws, and many opt for industry accreditation to enhance their legitimacy.

Are PEOs in New Jersey required to have special certifications or licenses?

Co-employment and employee leasing represent different employment models. However, the New Jersey Department of Labor and Workforce Development refers to employee leasing companies and professional employer organizations interchangeably. 

PEOs and employee leasing providers must register with the state like other businesses—a process you can start here. 

Special registrations are available to PEO groups and PEOs that aren’t fully based in New Jersey. To learn more about the laws around PEOs in New Jersey, view the state’s auditing and compliance assurance steps—you can start here.

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

Ending a relationship with most PEOs involves a complicated process. First, you have to disentangle all their systems and tech from your own—which is usually painful and disruptive. Then, you have to figure out how to replace the services they provided, either with your own team or by using another solution.

With Rippling PEO, transitioning away is straightforward. Simply turn off the PEO service and shift to our workforce management platform. We’ll keep all your systems, data, and integrations in place so you don’t miss a beat.

In what states is Rippling PEO available?

Rippling PEO offers services 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.