PEO in New Mexico [2024]

From arid desserts to snow-capped mountains,  the “Land of Enchantment” is also the land of variety. As many of New Mexico’s employers know, the variety doesn’t stop there. A range of industries, from aerospace and defense to tourism, thrive in New Mexico, making for plenty of diversity in employment laws, city and county minimum wage ordinances, and payroll tax requirements. 

Rippling PEO can help New Mexico’s employers with all of that—plus automatic state tax registration, remote IT management, and more. Professional employer organizations (PEOs) support small and medium-sized businesses by streamlining and automating payroll services, benefits management, regulatory compliance, workers' compensation insurance, and more tedious HR functions. Partnering with a PEO also allows businesses to provide their employees with access to the kinds of high-quality, affordable benefits they need to remain competitive.

Read on to learn how New Mexico PEO services can alleviate common HR burdens—and how to choose the right PEO for your business. 

Benefits of using a PEO in New Mexico

Working with a PEO can benefit your company by reducing benefits expenses, eliminating time-consuming HR tasks, and more.

Offload administrative HR work

Teaming up with a PEO creates a co-employment relationship where both your business and the PEO share employment responsibilities.

Your company becomes what’s known as the worksite employer, overseeing hiring, salary decisions, and daily management of workplace operations. 

The PEO, on the other hand, serves as the administrative employer. It uses its own employer tax identification number (EIN) to legally employ your workers and manage employment-related HR functions like payroll processing, benefits administration, compliance, and more.

PEOs bring technology, expertise, and experience to the table so you and your HR department are free from administrative tasks—meaning you can spend more time executing growth-oriented strategies. 

Better employee benefits, at a lower price

The average business that uses a PEO has around 16 worksite employees. Because a single PEO works with numerous businesses, they’re usually much bigger than their individual company partners. It’s precisely this fact that makes them ideal for acquiring benefits.

Due to their larger size and employee count, PEOs are able to negotiate with insurance companies on pricing for health plans, retirement plans, long-term disability and life insurance, workplace benefits, and so on. While PEOs don’t sell these benefits, they enable businesses to access them affordably through their relationships with insurance providers.

Robust benefits packages at affordable prices are often unattainable for small businesses on their own. This will be more true than ever in 2024, as health insurance costs are expected to jump another 6% from 2023.

With PEOs, many more companies can offer potential employees attractive benefits, making them stand out in New Mexico’s competitive market—like the booming energy, aerospace and defense, and logistics and transportation sectors.

Worry-free compliance with New Mexico laws

PEOs are instrumental in helping navigate the complex landscape of federal, state, and local employment and labor laws in New Mexico.

This is especially critical for minimum wage and payroll tax compliance, as it varies across the state. For instance, Albuquerque, Las Cruces, and Santa Fe all have their own minimum wage ordinances.

In the City of Las Cruces, minimum wage is $12.36. In Albuquerque, it aligns with the state wage of $12.00. In Santa Fe county, that wage is $12.95, except for Santa Fe city, where a cost of living ordinance bumps it up to $14.03. And we haven’t even mentioned the variance in pay for tipped employees yet!

Managing wages can be a significant challenge for employers in New Mexico and beyond. A comprehensive PEO service like Rippling can greatly reduce this burden by automatically identifying and notifying you of minimum wage discrepancies based on your employees' locations.

PEOs also offer support in navigating legal and compliance issues related to:

• Payroll regulations, including tipped and non-tipped employee and contractor classification, preparing and filing tax documents, adhering to state and local payroll taxes, compliance with overtime regulations, and more
• Benefits laws, such as New Mexico’s Healthy Workplaces Act, New Mexico’s Pregnant Worker Accommodation Act (NM PWA), and a long list of federal regulations such as the Affordable Care Act (ACA), FMLA, COBRA, HSA, FSA, etc.
• Labor laws, including the guidelines put forth by New Mexico’s Occupational Health & Safety Bureau (NM OSHA), the State of New Mexico Workers' Compensation Administration, the New Mexico Human Rights Act, and federal programs such as the Worker Adjustment and Retraining Notification (WARN) Act

Non-compliance with any of New Mexico’s local or state regulations—as well as federal guidelines—can lead to legal issues and fees. For example, late filing or payment of state income tax will cost you 2% of the tax owed every month it’s late, up to a whopping 20%. Businesses that fail to stay on top of workers’ comp must cover any unpaid premium plus 15% interest for every year coverage lapsed. Leveraging a PEO's compliance support means avoiding legal pitfalls and pricey fines altogether.

Dedicated support team

Top PEOs can offer New Mexico business so much more than just time and cost savings. The right partnership can provide you with one-on-one guidance on benefits optimization, training for management, help developing safety training plans, and support on various other HR tasks.

A partnership with a PEO gives you unlimited access to extensive HR expertise, an asset that’s critically important yet difficult to cultivate in small businesses and startups.

What to consider when evaluating a PEO service in New Mexico

New Mexico businesses have access to a wide array of PEO service providers, making the task of narrowing down the right one for your business difficult. Consider the following to help guide your selection: 

• Business needs: Determine the specific HR support your company requires from a PEO. Commonly sought-after PEO 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 needs: PEOs generally bill either a per-employee monthly fee or a percentage of payroll. But you shouldn’t only look at that one-time number. Factor in your company's growth trajectory to ensure the costs remain sustainable as your team grows.
• Experience and reputation: Investigate the PEO's history, track record with businesses in New Mexico, and its standing within the greater PEO industry. Utilize software review platforms like G2, Capterra, and PeerSpot for feedback from actual users.
• Benefits offered: Evaluate the quality, range, and cost-effectiveness of the benefits each PEO makes accessible—and ensure they align with your and your employees' needs.
• Benefits renewal rates: Look into PEO renewal rates, particularly after the first year. This is where some PEOs hide extra fees, so transparency here will help you avoid unforeseen expenses or the hassle of switching PEO providers if costs get out of hand.
• Integrations: Confirm that the PEO can integrate seamlessly with your internal tools, systems, and technology.
• Industry specializations: If your business operates within a sector prevalent in New Mexico, such as energy or aerospace and defense, a PEO with demonstrable expertise in that industry might be preferable.
• Legal and compliance expertise: For businesses with specific regulatory requirements or legal concerns—such as New Mexico’s tourism and food industries, where minimum wage and classification are complex—a PEO with experience in these areas can offer valuable support.
• Ease of exit: Consider how you might disengage from the PEO if necessary, whether to bring HR functions in-house or switch to another provider. Some PEOs make it more difficult than it has to be to transition away from their platform. You don’t want to get stuck with one of these providers should you ever need to part ways.

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

Rippling PEO distinguishes itself as the first platform to consolidate HR, IT, and Finance into a single, streamlined interface. Its innovative software enables swift onboarding in as little as 90 seconds and provides comprehensive remote IT management capabilities. 

At Rippling, we take on crucial compliance responsibilities, such as setting up state and local tax accounts and proactively addressing minimum wage and overtime concerns—while providing access to premier benefits at competitive prices.

With Rippling PEO, your business gains:

• An integrated platform for HR, IT, and Finance management
• Access to premium benefits packages at consistently lower-than-average PEO renewal rates
• Automated notifications for federal, state, and local compliance issues, complete with resolution strategies
• Advanced, tailored workforce analytics for in-depth employee data insights
• Tools for managing remote teams, from tax registration to digital onboarding and app and device management 
• Automatic risk and compliance management features, such as ACA and COBRA administration, harassment prevention training, and distribution of digital labor law posters
• An extensive library of HR documents, templates, and other valuable resources

Moreover, should you decide to bring HR functions in-house, transitioning from Rippling PEO is remarkably straightforward. Unlike the complex processes required by other PEOs, Rippling offers a seamless switch to our all-in-one workforce management platform. All your HR and payroll data remains accessible in your account, integrations are preserved, and employees can even continue using their existing logins for a hassle-free experience. 

FAQs about PEOs in New Mexico

What is a PEO, and how does it work?

A professional employer organization (PEO) partners with companies to provide human resources services, including payroll management, benefits administration, risk reduction, and compliance assistance. Commonly, this involves a co-employment arrangement where the PEO is designated as the legal employer for the company's employees for tax-related purposes.

How does a PEO arrangement affect control over my employees?

The PEO oversees HR duties and most tasks related to employment. Your business retains authority over hiring, employee supervision, strategic decision-making, and the execution of daily business activities.

What is a certified PEO?

A certified PEO (CPEO) adheres to particular standards established by the IRS. Certification is optional and doesn’t imply any endorsement by the IRS. Previously, employing a CPEO provided tax benefits, but today, these advantages are mostly obsolete. 

What size company can benefit from a PEO?

PEOs offer advantages to businesses across the board, yet they prove particularly beneficial for small to medium-sized businesses. 

This is because smaller businesses usually seek ways to lower HR-related expenses and access high-quality but affordable benefits packages. Relationships with PEOs enable them to do this without breaking the bank.

How does a PEO charge for its services?

The cost of a PEO can vary, but it’s generally based on a per-employee per-month fee or a percentage of total payroll. Costs and pricing models depend on the service scope and your number of employees.

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

Typically, a PEO partnership begins with the PEO company gathering crucial data about your workforce, such as payroll specifics, employment history, and benefits information. 

Following this, a PEO will likely establish systems for HR, payroll, and benefits management—which may necessitate integration with your current systems.

In addition, the PEO might conduct training and onboarding sessions to ensure all employees are adept at navigating these newly implemented processes.

Completing these activities can take several weeks to a few months, depending on the size of your business and the intricacy of the services provided by the PEO.

Are PEOs regulated?

PEOs are subject to both federal and state regulations, with many seeking industry accreditations to bolster their credibility.

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

While co-employment via a PEO and employee leasing are distinct employment models, it’s important to know that the New Mexico Regulation and Licensing Dept. views them as the same. 

PEOs/employee leasing companies must register with the New Mexico Regulation and Licensing Dept. by filling out several forms and applications, which can be found here. If all goes well, a registration certificate will be issued, which PEOs should renew annually. Registration costs $1,000, and the penalty for operating unregistered is $500. 

Companies are also required to register with the New Mexico Secretary of State before doing business in New Mexico. There are different requirements depending on where a PEO is incorporated and how the business is structured. A PEO that’s looking to set up shop in New Mexico can begin the process using this Start a Business page.

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

Discontinuing services with a PEO typically requires a business to navigate a challenging transition. First, you’ll need to painstakingly remove the PEO's ingrained systems and then replace the services the PEO formerly provided. 

But not with Rippling PEO. Rippling facilitates an effortless transition to our workforce management platform should you opt to move away from your co-employment arrangement. And don’t worry, all your upfront work isn’t lost. Rippling maintains existing systems, data, and integrations so you can continue working seamlessly.

In what states is Rippling PEO available?

Rippling PEO extends its offerings to businesses across 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.