A Professional Employer Organization (PEO) acts as a co-employer that provides various services for businesses. These services often include payroll, employee benefits, safety training, compliance issues, and employee onboarding.
PEOs allow business leaders to focus on their employees and growing their business instead of all the tedious tasks that leading a business involves.
Here are some of the complex state laws that a PEO in your state could help make sure your company complies with.
Wage and hour laws
Wage and hour laws vary from state to state, so working with a PEO that specializes in your state can help your company stay compliant with those laws.
For example, in Wyoming, the basic minimum rate per hour is $5.15; however, employers subject to the Fair Standards Act must pay the federal minimum wage of $7.25. Also, in Arizona, the basic minimum wage per hour is $13.85 which is higher than the federal minimum wage, so employees are entitled to the higher rate.
Working with a PEO that specializes in your state will help your company become familiar with your wage and hour laws and help you stay up to date with any state changes.
State laws can get intricate, and some states have different rules and laws when it comes to overtime pay, while others just follow the federal overtime law. Utah, Arizona, and Wyoming all follow the federal law for overtime pay which means that workers are entitled to 1.5 times their regular pay for any hours worked in excess of 40 per week.
Pay frequency requirements
For employers to stay compliant with laws, they must know the state and federal pay frequency requirements like the back of their hand. However, when companies work with a PEO that specializes in their state, employers no longer have to carry the responsibility of knowing all the details about their pay frequency requirements.
Many states require weekly, biweekly, semimonthly, or monthly payroll.
- Weekly: Once a week (52 paychecks per year)
- Bi-weekly: Once every other week (26 paychecks per year)
- Semi-monthly: Twice per month (24 paychecks per year)
- Monthly: Once per month (12 paychecks per year)
In addition to these required pay periods, some states have even more restrictions and specifications. For example, in Arizona they require that there must be two or more paydays per month, no more than 16 days apart.
In Utah, employees must be paid at least semi-monthly or monthly; however, employers can always choose to pay their employees more frequently than the law requires. In Utah, only employees being paid salary can be paid monthly.
Paid leave laws
While some states have specific paid time off (PTO) laws, states like Utah, Arizona, and Wyoming do not have laws regarding PTO for employees. That being said, these states do not require employers to provide their employees with paid or unpaid vacation days. However, it is encouraged to provide your employees with PTO, as it will help attract and retain top talent.
In Arizona, employees earn paid sick time off. For employers with 15 or more employees, employees are accruing a minimum of one hour of earned paid sick time for every 30 hours worked, with a maximum of 40 hours of earned paid sick time per year, unless the employer selects a higher limit. For employers with fewer than 15 employees, employees accruing a minimum of one hour of earned paid sick time for every 30 hours worked, with a maximum of 24 hours of earned paid sick time per year, unless the employer selects a higher limit.
Every state also has different termination laws. For example, in Arizona, employees who are terminated or discharged must receive all of their outstanding wages either within seven days or by the next regular payday, whichever is sooner. And, if an employee quits or voluntarily resigns, they must be paid their outstanding wages on the next regular payday.
In Wyoming, a final paycheck must be provided, no later than the employer’s next regularly scheduled payroll date, for an employee who is discharged, resigns, or retires.
In Utah, employees that are terminated or laid-off must be paid final wages within 24 hours of the termination. Employees who quit or resign must be paid final wages by the next regularly scheduled payday.
Instead of waiting for a national service team representative to fly over from across the country to help solve issues, a PEO in your state can be at your service in a timelier manner.
PEOs within your area will also be more responsive to questions or concerns because all of their clients are in a certain area, instead of all around the country. Since PEOs are co-employers, it is best for them to be close by so that they can truly be involved in your company.
Working with a PEO that specializes in your state will help your company comply with all your state’s laws. State laws can be intricate and complicated, so it can be beneficial to let professionals take care of the tedious work while you focus on your employees and reaching company goals. If you have any questions about how PEOs in your area can help your business, reach out to us at firstname.lastname@example.org.