PEO in Utah [2024]

Published

Feb 20, 2024

Professional employer organizations (PEOs) offer Utah businesses a unique way to save time and money. PEOs partner with businesses to offer HR solutions that manage essential human resources functions, such as employee benefits, payroll processing, and compliance with labor laws. 

For many Utah businesses, managing administrative HR demands is challenging. PEOs offer a way to reduce these burdens—while also providing access to high-quality benefits, often at better rates than a business could secure on its own. It’s a win-win for employers and their employees.

When considering a PEO in Utah, you need to determine your business needs and which PEO best aligns with them. Below, we’ll guide you through what to consider when evaluating PEOs in Utah. With features like automatic state tax registration and efficient remote laptop management, Rippling PEO simplifies the process of hiring and onboarding employees, ensuring compliance for Utah-based businesses.

Benefits of using a PEO in Utah

Whether you’re a startup in Salt Lake City or an established business hiring remotely throughout the state, using a Utah PEO company can help reduce your team's administrative HR work. In addition, a PEO provides access to cost-effective benefits, critical HR support and expertise, and much more.

Offload administrative HR work

Most PEOs operate on a co-employment model. This means that when a business joins a PEO, it enters a shared employment relationship with the PEO firm. As the business owner, you become the worksite employer and retain full control over critical aspects of running your business, such as hiring, compensation, and strategic decision-making. Meanwhile, the PEO becomes the administrative employer, taking on employment-related responsibilities—and employing your workforce under its federal tax identification number (EIN). 

This unique arrangement allows the PEO to manage time-consuming, employment-related HR processes, such as payroll processing, benefits administration, and ensuring HR compliance. Since navigating state-specific labor laws and managing workers’ compensation insurance can be complex, offloading these administrative duties to a PEO can free up your business to focus on other important work—like strategic initiatives that foster growth and strengthen your competitive edge in the Utah market.

Better employee benefits, at a lower price

According to the National Association of Professional Employer Organizations (NAPEO), PEOs across the US co-employ 4.5 million workers at 200,000 businesses. Because of their sheer size, PEOs can leverage their unique position to negotiate with insurance providers and secure better prices for high-quality benefits.

These economies of scale also allow PEOs to offer their clients access to a range of employee benefits that might otherwise be unattainable due to cost constraints. These benefits packages often include comprehensive healthcare plans, life and disability insurance, mental health support, retirement plans, and even perks like commuter benefits and dependent care.

The federal Affordable Care Act (ACA) requires businesses to provide health insurance to their employees if they have 50 or more full-time workers. Although Utah doesn’t have any state laws requiring businesses to offer additional benefits, partnering with a PEO often gives small businesses the ability to offer additional, optional benefits packages to their employees. A PEO can help you not only comply with federal mandates, but also give your business a competitive advantage by offering more comprehensive benefits than you may have been able to on your own.

Worry-free compliance with Utah laws

Navigating state-level Utah employment and labor laws can be challenging. In Utah, a good example is the state’s workers’ compensation law, which requires every employer to provide workers’ comp coverage for every employee (with a few exceptions). However, workers’ compensation requirements are set by each state and vary widely, so if you employ remote workers in different jurisdictions, it can be tough to stay on top of all the different regulations. That’s where a PEO comes in. A PEO like Rippling not only automatically flags violations, but provides convenient, pay-as-you-go workers’ comp plans that meet local requirements based on each employee’s location, so you always stay compliant with local laws.

And PEOs can help your business stay on the right side of much more than just workers’ comp laws. They also help you ensure consistent compliance with:

  • Payroll regulations: This includes classifying employees and contractors accurately, managing tax filings, and ensuring payroll taxes are correctly reported and deposited. 
  • Benefits laws: PEOs help Utah businesses comply with federal benefits laws such as the ACA, COBRA, FSA, HSA, and any other benefits-related regulations.
  • Labor laws: Compliance with Equal Employment Opportunity (EEO) regulations and displaying state-required labor posters is vital for Utah businesses to avoid costly legal repercussions.

Violating these laws can lead to costly fines and penalties. According to IRS estimates, about 40% of small businesses face payroll-related penalties annually, making a PEO's role in managing compliance not just convenient but critical for risk management.

Dedicated support team

PEOs are experts in HR management. If you’re a small business or startup, you stand to benefit greatly from the support and expertise a PEO can offer, especially if you don’t have extensive in-house HR resources. A PEO can help you streamline your benefits administration, develop an employee manual, train management, review your safety protocols, and more. With a PEO, Utah business owners can focus more on growing their businesses, knowing their HR needs are being expertly managed.

What to consider when evaluating a PEO service in Utah

Selecting the best PEO for your Utah business requires careful consideration. Here’s what to look for when comparing service providers:

  • Your business needs: Assess the services you need. Common PEO offerings include payroll processing, benefits administration, onboarding, HR outsourcing, risk management, compliance with Utah-specific regulations, and more.
  • Your budget: PEOs typically charge either a per-employee fee or a percentage of your payroll. For Utah businesses planning to grow, consider how these costs are likely to scale with your expanding workforce.
  • Experience and reputation: Research the PEO’s history in Utah. Look at online reviews and testimonials on sites like G2 and Capterra to gauge their effectiveness and customer satisfaction, especially with Utah-based companies.
  • Benefits: Evaluate the range and quality of benefits plans the PEO offers access to. In a competitive state like Utah, offering comprehensive health insurance and retirement plans is essential for attracting top talent.
  • Benefits renewal rates: Understand how benefits costs might change over time. A transparent PEO will help you anticipate future costs by publicizing PEO renewal rates, so you can avoid unexpected future costs. 
  • Integrations: Consider how the PEO's services will integrate with your current systems and technology. Smooth integration is crucial for efficient operation, particularly in Utah’s tech-forward business landscape.
  • Industry specialization: Does the PEO have expertise in industries prominent in Utah? For instance, a PEO experienced in healthcare or tech might be beneficial if your business operates in those industries.
  • Legal and compliance expertise: Evaluate their proficiency in Utah-specific legal and compliance issues. This is crucial for ensuring your business adheres to state regulations.
  • Exit strategy: Plan ahead for how you might transition away from the PEO if needed. Understanding the process can save potential headaches down the road.

Why Rippling PEO is the right choice for your Utah business

As the first PEO to utilize modern software, Rippling PEO syncs HR, IT, and Finance all in one easy-to-use platform. From swift 90-second onboarding to comprehensive remote IT management, Rippling expertly handles your HR busy work, plus essential compliance tasks—such as setting up state and local tax accounts and managing workers’ compensation—all while providing your team with access to premier benefits at affordable rates.

The benefits of Rippling PEO for Utah businesses include:

  • Unified HR, IT, and Finance platform: Rippling brings together HR, IT, and Finance in one seamless platform, streamlining operations and enhancing efficiency for any business.
  • Powerful and customizable reporting: Offering robust reporting tools, Rippling enables companies to effectively track and manage HR metrics and employee data.
  • Remote team management tools: Features like state and local tax registration, paperless onboarding, and app and device management are particularly advantageous for businesses with remote teams in Utah and beyond.
  • Access to superior benefits plans: Rippling helps you access high-quality benefits plans with below-average, predictable renewal rates to attract and retain the best talent. 
  • Automated compliance monitoring: Ensuring compliance across federal, state, and local levels, Rippling flags potential compliance issues and offers solutions.
  • Comprehensive risk management: Rippling expertly manages processes like ACA and COBRA administration, anti-harassment training, and distribution of digital labor law posters. 
  • Extensive HR resources: Gain access to a wealth of HR resources, guides, and templates tailored to the unique needs of your business.

Additionally, transitioning away from Rippling’s PEO and to our all-in-one workforce management platform is straightforward, should your business needs evolve. Unlike other PEOs that tend to make this transition painful and complex, Rippling ensures a smooth transition without disrupting your operations.

FAQs about PEOs in Utah

What is a PEO, and how does it work?

A professional employer organization (PEO) is a firm that partners with your business to offer HR services like payroll processing, benefits administration, and HR compliance. A PEO typically operates under a co-employment model, where the PEO acts as the administrative employer of your workforce so it can handle common HR tasks on your behalf.

How does a PEO arrangement affect control over my employees?

In a PEO arrangement, you retain complete control over your employees’ management, operational decisions, and day-to-day tasks. 

What is a Certified PEO?

A Certified PEO (CPEO) meets strict criteria (regarding specific background, experience, and financial requirements) set by the IRS. The IRS doesn’t require PEOs to have this certification; nor does certification indicate endorsement from the IRS. In the past, certification meant a CPEO could offer certain tax benefits, but today, those benefits are mostly obsolete.

What size company can benefit from a PEO?

Businesses of all sizes in the state of Utah can benefit from PEO services. However, smaller companies usually benefit the most from the cost savings and HR outsourcing PEOs provide. 

How does a PEO charge for its services?

PEOs generally charge on a per-employee basis or a percentage of the total payroll. Utah businesses should consider how these cost structures align with their current and future growth.

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

Implementing PEO services typically involves integrating your business operations with the PEO’s systems. They may also set up onboarding sessions for your team and provide ongoing support for learning the new processes. The timeline can vary, typically ranging from a few weeks to a few months, depending on the complexity and size of your Utah business.

Are PEOs regulated?

Yes, PEOs are regulated at both the federal and state levels, ensuring compliance with various employment and labor laws.

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

According to Utah’s PEO Licensing Act, PEOs must obtain a license before providing services in the state. Utah offers three types of licenses depending on where the PEO and its clients have physical offices. Learn more about the licensing requirements and how to apply on Utah’s Insurance Department website.

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

Ending a relationship with a PEO involves transitioning HR processes back in-house or to another provider. The complexity and length of this process can vary depending on your contract and the extent of services provided.

In what states is Rippling PEO available?

Rippling PEO offers services in all US states, including Utah.

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 20, 2024

The Author

Carissa Tham

A British Columbia-based tech content strategist and writer, Carissa has lived and worked in Singapore, Taiwan, and Canada. Carissa lends her unique global perspectives to growing Rippling’s brand in the Asia-Pacific region and beyond.