Ready to take control of your company’s HR, payroll and benefits offerings? Here’s how to ensure a smooth transition when leaving a PEO.

Make sure you have federal and state withholding accounts
Make sure you have Federal (FUTA) and State (SUTA) unemployment tax deposit accounts – you may want to speak with state regulatory bodies to discuss your rate once you exit the PEO
Align yourself with a new payroll provider and work with them to create a process of transitioning services – this includes payroll history as well as future processing
Request records of court orders, wage garnishments and tax levies currently in effect for employees from the PEO – if they are resistant you may have to make requests of employees for the documentation to assure orders are met
Plan training on new system, including new duties required of field supervisors – assess whether duties of supervisors (time reporting) align with capabilities, time involved and culture of organization

Monitor system usage by supervisors prior to “go live” date to assure they are practicing new responsibilities on system
Involve company IT administrators to assure technical transition with internal systems
Establish master personnel files – electronic, paper or both
Implement internal administrative processes to assure compliance with activities such as FMLA, COBRA ACA tracking, etc.
Identify a resource for benchmarked compensation data
Identify a resource for annual Affirmative Action Plan activities (if applicable)
Replace any reporting and analytics previously performed by PEO (turnover, exit interviews, cost per hire, etc.)

Review PEO contract to determine whether COBRA will receive notices of Loss of Coverage or may they remain on PEO plan?
Work with benefit broker(s) and payroll processor to assure that you meet ACA requirements for plan design, penalty avoidance, tracking of hours, administration and annual IRS processing
Performallrequiredactivitiesrequiredtoestablisha retirement plan and transfer employee funds to the new plan along with election forms, beneficiaries etc.
Assure that all PHI regulated data is transferred
in a confidential manner, meeting federal HIPAA regulations – Seek assurance in writing from PEO on their safe-keeping of this information going forward (it’s still on their system)

Verify accuracy of all time-off accrual formulas, balances to be transferred and any employees who have time off that isn’t standard to established formulas
Seek assurance in writing from PEO on their safe keeping of identity information related to payroll going forward (it’s still on their system)
Make sure you have payroll deduction / reduction forms for all sums that will be withheld from employees’ payroll
Run a parallel payroll with new and old providers to assure accuracy
Remember: mid-year changes affect employee’s taxable income status

Request copies of the employees’ tax withholding forms and I-9s from the PEO – they are not company specific and can be used if provided – otherwise employees will need to complete new forms
Request records associated with terminations in case there are future charges/inquiries

Request copies of any performance documentation on file for current employees
Establish Worker’s Compensation coverage and define a process to assure that benefits due to pending and current claims are not interrupted, and claims are managed and resolved

Identify new sources to maintain awareness of employment practice regulations, legislation monitoring, updates, re-issued federal and state forms, postings, etc.
Re-acquaint yourself with governmental reporting requirements, timeframes, needed resources for compiling data, etc.