PEO in Alaska [2024]

A professional employer organization (PEO) helps businesses reduce their administrative HR workload by streamlining and automating some common, manual tasks—things like payroll, benefits administration, compliance tasks, and workers’ compensation insurance. PEOs are especially beneficial to small to mid-sized businesses because they can provide access to better employee benefits at more affordable prices.

In Alaska—which has the sixth-highest cost of living in the US, according to Forbes—more affordable benefits could be an attractive perk that helps recruit and retain top talent. This makes using a PEO service beneficial to many small businesses in the Last Frontier.

However, whether your business is based in Anchorage, Juneau, or somewhere in between, choosing a PEO requires careful consideration and evaluation of Alaska’s many options—and that’s where this article comes in. From remote device management to automatic state tax account registration, Rippling PEO makes hiring and onboarding people in Alaska and across the US easier than ever.

Benefits of using a PEO in Alaska

Using a PEO for your Alaska-based business means reducing administrative HR work, giving your employees access to better benefits at lower costs, gaining compliance support and expert advice, and much more.

Offload administrative HR work

When you join a PEO, it co-employs your workforce. That means you and the PEO divide up employer responsibilities in a few ways:

You become the worksite employer, meaning you maintain all authority over who you hire (and let go), how much you pay your workers, and all of your business’s overall strategy and operations, like marketing, sales, customer support, and research and development.

The PEO becomes the administrative employer, meaning they employ all your workers under their federal tax identification number (EIN) and take over employment-related human resources work like payroll, benefits administration, compliance, and similar tasks.

PEOs are well-suited to do this work because of their experience, expertise, technology, and established processes that allow them to streamline and automate various parts of HR management. That leaves your team with a lot less administrative and manual work on their plates—freeing up time to focus on important strategic initiatives that drive key outcomes for your business.

Better employee benefits, at a lower price

The National Association of Professional Employer Organizations (NAPEO) estimates that there are just under 1,000 PEOs across the US, serving around 200,000 businesses—co-employing a total of 4.5 million workers. And because each PEO co-employs so many individual workers, they have the bargaining power to negotiate with insurance providers for great rates on benefits.

PEOs also use their economies of scale to offer access to robust and comprehensive benefits plans to their client business’ employees. Many PEOs offer access to health insurance, life and disability insurance, mental health support, retirement plans, worksite benefits, commuter benefits, dependent care, and more—benefits that many small and mid-sized businesses simply can’t offer on their own. Offering access to better, more comprehensive benefits plans through a PEO can help small businesses attract and retain better talent, fueling their business success in the long-term.

Under the Affordable Care Act (ACA), all businesses with 50 or more full-time employees must offer health insurance benefits. Alaska doesn’t require any additional coverage, but a PEO can still help small businesses in the state comply with the federal mandate—while providing their employees access to more affordable health insurance plans than they might have been able to offer on their own.

Worry-free compliance with Alaska laws

Federal laws like the ACA aren’t the only ones a PEO can help your business comply with—they can also manage your compliance with state and local laws in Alaska, which are subject to frequent changes.

For example, a PEO can help you comply with Alaska’s statewide minimum wage law. Under the Alaska Wage and Hour Act, the state’s minimum wage is $10.85 per hour as of 2023—significantly higher than the federal minimum wage of $7.25 per hour. Keeping up with changing minimum wages in different states—especially if you have remote employees—can be tough. But a PEO like Rippling can help; it automatically flags minimum wage violations based on where your employees live, so you can be sure you’ll never violate local minimum wage laws.

Alaska’s overtime laws are another example. The Last Frontier is one of the few states in the US that goes beyond the federal Fair Labor Standards Act (FLSA) and requires daily (instead of weekly) overtime pay. That means employers in Alaska must pay employees 1.5x their regular pay rate for any hours worked over eight in a day—plus any hours they work over 40 in a week. Rippling PEO can help with this, too—it’ll automatically apply the correct rate of pay based on each employee’s location and hours worked, so you comply with all local overtime laws.

PEOs help you maintain compliance with much more than just wage and hour laws. They also help you comply with:

• Payroll regulations, including correctly classifying your employees and contractors; issuing and filing tax forms; reporting, collecting, and remitting payroll taxes to the right tax authorities by all the relevant deadlines; and complying with all other wage laws
• Benefits laws, such as following all federal leave laws, the Affordable Care Act (ACA), COBRA, FSA, HSA, and any other benefits-related regulations
• Labor laws, including providing workers’ compensation insurance when required, following all Equal Employment Opportunity (EEO) laws, and displaying state-required labor posters

Failing to comply with any of these laws can cost your business hefty fines. Despite this, the IRS estimates that up to 40% of small businesses incur payroll penalties annually. Gaining compliance support by partnering with a PEO can help ensure you don’t become one of them.

Dedicated support team

By joining a PEO, you gain access to a dedicated team of HR experts, which can be particularly helpful for small businesses without the same expertise internally. While your PEO can help your business save time and money, it can also offer guidance and support. A PEO can guide you through common HR processes like streamlining benefits administration, writing your first employee handbook, training your management team, reviewing your safety practices, and any other challenges you might encounter.

What to consider when evaluating a PEO service in Alaska

There are many Alaska PEO companies to choose from, and they all offer different benefits to businesses in the Last Frontier. As you evaluate individual PEOs to choose the one that’s right for your business, consider these criteria:

• Your business needs. First and foremost, think about what you need from your PEO. Some of the most common PEO offerings include:
• Payroll processing
• Tax filing and compliance
• Administering benefits
• Recruiting and onboarding
• Managing risk and safety compliance 
• Tracking time and attendance 
• Regulatory compliance
• HR outsourcing
• Your budget. PEOs typically use one of two pricing structures: either they charge a per-employee per-month fee or a percentage of each payroll run. That said, not everyone follows those pricing models. And keep in mind that if your business is growing, you’ll have to budget for your future PEO needs, too.
• Experience and reputation. Look into the PEO and its background—particularly whether it’s worked with other Alaska businesses before and how well-regarded it is among companies like yours. Checking review sites like G2 and Capterra can help you see what current and past clients have to say about their experiences.
• Benefits. Take some time to explore the benefits a PEO offers, focusing on the range, quality, and cost of plans. Consider your employees’ wants and needs when making a decision.
• Benefits renewal rates. The sticker price for the benefits plans may not tell you all the costs you’re likely to incur. See if the PEO is transparent about how much its benefits plans increase in cost after the first year. Some PEOs hike up renewal rates, resulting in unexpected increases for their clients (or the hassle of switching to another PEO after just one year).
• Integrations. Make sure any PEO you consider will integrate with your existing technology, tools, and systems.
• Does the PEO specialize in certain industries? If your business is in a niche industry, you may want to seek out a PEO with experience in your field.
• Does the PEO specialize in certain legal or compliance issues? If your business has specific legal challenges or needs to meet certain federal or state regulatory requirements, a PEO with specialized experience might be most helpful.
• Your exit strategy. You may not stay with your PEO forever. Whether you move your HR processes in-house or go with a different solution, think about what will happen when you leave the PEO. Many PEOs are difficult to part ways with—they require you to painfully rip out their systems and start over with a new solution from scratch.

Why Rippling PEO is the right choice for your Alaska business

Rippling PEO is the first to sync HR, IT, and Finance all in one platform—streamlining and simplifying your busy work. Because Rippling runs on modern, easy-to-use software, your most common admin tasks are quicker to complete than ever—from 90-second onboarding to remote device and IT management. 

We provide your team with access to Fortune 500-level benefits at affordable costs and easily handle all your business’s compliance tasks—like automatically setting up and maintaining your state tax accounts for you or flagging minimum wage or overtime violations.

With Rippling, you get:

• HR, IT, and Finance in a single platform
• Powerful and customizable reporting on any employee data from your systems
• Remote team management tools, including state and local tax registration, paperless onboarding, and app and device management
• Access to big-company benefits plans, plus below-average, predictable renewal rates
• Automatic flagging for compliance infractions at every level, along with recommended action plans to fix them
• Automated risk management processes, including ACA and COBRA administration, anti-harassment training, and sending digital labor law posters to your workers
• Access to comprehensive HR resources, guides, and templates

If you ever decide to bring your HR operations in-house, Rippling makes it easy to move on and off the PEO. There’s no painful rip-and-replace process like with other PEOs—you just switch off the PEO and move seamlessly onto our all-in-one workforce management platform. All your HR, payroll, and employee data stays safely stored in your account, and your employees keep the same Rippling logins, so they can keep using the system like before.

FAQs about PEOs in Alaska

What is a PEO, and how does it work?

A PEO is an organization that partners with businesses to help manage their HR operations. It can provide comprehensive services spanning payroll, benefits administration, HR management, compliance, and more. PEOs typically co-employ a business’s employees, allowing them to take on that business’s employment-related HR work.

How does a PEO arrangement affect control over my employees?

When you partner with a PEO, you retain complete control over your business's day-to-day operations and employee management. The PEO only handles HR functions and employment-related HR work.

What is a Certified PEO? 

A Certified PEO (CPEO) is a PEO that has undergone a certification process via the IRS and satisfied specific requirements related to its background, expertise, finances, and reporting. Getting certified is an entirely voluntary process for PEOs, and certification doesn’t represent an endorsement from the IRS; rather, it just shows that the PEO has passed a set of assessments. In the past, CPEO status signaled that the PEO could offer certain tax benefits to the businesses it partnered with. Today, however, the main advantages of PEO certification are defunct.

What size company can benefit from a PEO?

Businesses of any size, from small startups to large enterprises, can partner with PEOs. However, PEOs tend to benefit small to midsize businesses the most. Through the PEO, these businesses can often get their employees access to better benefits (at lower costs) than they could have on their own.

How does a PEO charge for its services?

Costs for PEO services can vary quite a bit, depending on the services they provide, the complexity of the business’s needs, the number of employees they serve, and other factors. Most PEOs charge either a flat rate per employee or a percentage of each payroll run.

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

Typically, the steps required to implement a PEO look more or less like this:

1. The PEO collects data from your business, including payroll data, employment records, and benefits information.
2. They set up their systems to handle your HR, payroll, and benefits administration, including integrating their technology with your systems, if needed.
3. They may hold training or onboarding sessions to get your employees up to speed, explain the new processes and benefits, and teach your team how to use their systems.

After implementation, the PEO will usually provide ongoing support as needed. The process can take anywhere from a few weeks to several months, depending on your business’s size and the complexity of the services you need.

Are PEOs regulated?

Yes. PEOs have to follow both federal and state regulations. They can also choose to be accredited by industry organizations if they want additional credibility in their field.

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

The State of Alaska doesn’t require any specific, state-level licenses for PEOs, but they still need to comply with all state laws governing employer-employee relationships.

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

With most PEOs, ending your relationship is complex. You have to remove all of the PEO’s systems from your business, which can be painful, disruptive, and inefficient. Then, you need new systems to replace all the processes the PEO handled for you, from payroll to benefits administration and anything else.

With Rippling PEO, moving off the PEO is straightforward—you just switch it off and move to our all-in-one workforce management platform. All your systems, data, and integrations stay intact. You can even return to the PEO (just as seamlessly) if you want to.

In what states is Rippling PEO available?

Rippling PEO is available in 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.