Is It Important For Your PEO To Be ESAC Accredited?

Here at Alcott, we pride ourselves as being an Employer Services Assurance Corporation (ESAC) accredited PEO, but what does this really mean and how important is it for you to partner with a PEO that is ESAC accredited? Here is some information gathered from ESAC that will help answer these questions.

What is ESAC?

Formed in 1995, ESAC was created to build trust and provide assurance to clients, worksite employees, insurers, taxing authorities, regulators, and the general public within the PEO industry. Much like the FDIC for banking and the SIPC for securities, ESAC provides similar services and assurances.

What assurances does ESAC accreditation provide?

• ESAC accredited PEOs are continuously monitored to verify compliance with government regulations and important industry standards.
• A $1 million surety bond for each accredited PEO plus a $10 million excess surety bond to provide assurance of the timely and appropriate performance of key employer services
• Reimbursement of eligible claims by clients, employees, insurers and taxing authorities in the unlikely event of a default in the payment of wages, taxes, employee benefit contributions, or workers’ compensation and group life and health insurance premiums
• Verified adherence to important ethical, financial and operational industry standards

As a client of an ESAC-accredited PEO, what advantages do you have?

• Fast 24/7 online verification that your PEO is financially stable, is in compliance with important state and federal employment laws and PEO regulations, and is owned and operated by qualified people who have a personal and business track record of meeting their obligations in an appropriate manner.
• Financial assurance for covered clients and employees through surety bonds held in trust by Regions Bank in the unlikely event of a failure of an accredited PEO.
• Review of ESAC standards & procedures by your trusted advisors, such as your attorney, CPA and insurance professional, provides an additional level of confidence in the credibility of the accreditation

Today more than ever, businesses need help managing increasingly complex employee-related matters such as employee administration, payroll, worker’s comp and other employee benefits, risk management and compliance with the ever-growing number of state and federal employment laws and regulations.

Outsourcing these responsibilities to a professional employer organization (PEO) not only provides big company expertise and cost-effective economies of scale, but also allows business owners to refocus their valuable time on profitable business growth. There is no question that a PEO’s services can help businesses be more successful, and selecting a PEO that is accredited provides the additional benefit of verifiable assurance that the PEO is meeting important industry standards and is financially responsible.

To learn more about ESAC, visit


On February 8th, 2011, posted in: PEO Knowledgebase, Small Business Tips by
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