PEO in Connecticut [2024]

Human resources administration is demanding, especially for small to midsize businesses. With a professional employer organization (PEO), businesses can streamline their HR functions, access better benefits, and reduce costs. In addition, a PEO can automate payroll services, benefits administration, workers’ compensation insurance, compliance management, and other employer services. 

Connecticut-based businesses can especially benefit from using a PEO service. With a high cost of living and personal tax burden, Connecticut business owners are already paying more to run their companies than they would in other states. Employing a PEO can help offset some of those costs with access to more affordable benefits and lower HR costs.

But before choosing a PEO, it’s essential to understand your options—and this article can help you evaluate PEOs. Rippling PEO simplifies the hiring and onboarding process in Connecticut and all US states, offering features such as automatic state tax registration, time and attendance tracking, and remote laptop management.

Benefits of using a PEO in Connecticut

A Connecticut PEO service can significantly benefit businesses, including reducing administrative HR tasks and providing access to budget-friendly benefits and expert HR tools and support.

Offload administrative HR work

When you join a PEO, you enter into a contractual relationship where the PEO co-employs your workforce, meaning you divide employer responsibilities. You become the worksite employer and retain authority over hiring and termination, salaries, and strategy and business operations—including R&D, sales, marketing, and customer support. 

The PEO becomes the administrative employer. As the administrative employer, the PEO employs your workers under their federal tax identification number (EIN), enabling them to assume control of employment-related HR work, such as payroll, managing benefits, and compliance tasks. 

PEOs streamline HR management by using a blend of technology, expert knowledge, and established procedures. With the manual admin work out of the way, your HR team can concentrate on the strategic work that drives your company’s success.

Better employee benefits, at a lower price

The National Association of Professional Employer Organizations (NAPEO) recently reported that nearly 1,000 PEOs in the United States co-employ 4.5 million workers at 200,000 businesses. Because the PEO “employs” so many people from different companies, they have more bargaining power when negotiating with insurance providers to access better benefit plans at a lower cost. 

Many PEOs offer access to a variety of benefits, including:

• Health insurance
• Life insurance
• Disability insurance
• Worksite benefits
• Mental health support
• Retirement plans
• Commuter benefits
• Dependent care

While PEOs don’t sell the benefits themselves, they’re able to provide their client companies (and their employees) access to them using the economies of scale mentioned above. And giving their employees access to these benefits enables companies to hire and retain the best talent, which can be difficult for smaller business owners to provide independently. 

Under the federal Affordable Care Act (ACA), companies with 50 or more full-time employees must provide health insurance benefits. In Connecticut, Access Health CT Small Business is a health insurance marketplace for small businesses with fewer than 50 employees; however, it’s not mandatory to participate. MyCTSavings is a retirement savings program overseen by the state for employers that don’t already offer a qualified retirement savings plan. A PEO can help Connecticut employers provide access to mandatory benefits—and others that employees want and need—at more affordable rates than they could get on their own.

Worry-free compliance with Connecticut laws

Federal and state-level employment labor laws are not only complex, they’re constantly changing. A key benefit of using a PEO is having your compliance concerns taken care of. 

Connecticut's 2024 minimum wage is $15.69, more than double the federal minimum wage. Employers must ensure they’re paying the correct minimum wage and complying with overtime and other labor and employment laws in Connecticut, which can get tricky. A PEO like Rippling can automatically flag any minimum wage or overtime violations where your employee lives, ensuring you don’t break any local laws. 

However, minimum wage and overtime compliance are just the beginning. The right PEO can help you maintain compliance with: 

• Payroll regulations, including classifying contractors and employees properly; issuing and filing federal and state tax forms; reporting, collecting, and depositing payroll taxes with the correct agencies when required; and complying with other wage laws
• Benefits laws, including assistance with Connecticut’s paid sick leave and family and medical leave laws, plus federal regulations like the Affordable Care Act (ACA), COBRA, FSA, HSA, and any other benefits-related laws
• Labor laws, including supplying workers’ compensation coverage, complying with Equal Employment Opportunity (EEO) regulations, and displaying labor posters as required by the state

Employers violating any of the above laws can face sizeable fines and penalties. Non-compliance is not only costly, it’s surprisingly common. According to the IRS, 40% of small businesses are on the hook for payroll penalties each year, making compliance support an important benefit of using a PEO. 

Dedicated support team

When you join a PEO, you get access to a team of HR experts. This is a significant benefit for small businesses and startups that may lack similar HR knowledge and resources internally. With the PEO’s expertise, your company can save time and money following their advice on HR matters like streamlining benefits administration, training managers, assessing healthcare and safety systems, creating employee handbooks, and any other challenges your HR team might face.

What to consider when evaluating a PEO service in Connecticut

With all the PEO services in Connecticut, how do you pick the right one for your business? Here are some important criteria to consider:

• Your business needs. In which areas do you require assistance from a PEO? Some typical PEO services include:
• Processing payroll
• Filing taxes and ensuring compliance 
• Managing benefits
• Recruiting and onboarding
• Risk management and safety compliance
• Time and attendance tracking
• Regulatory compliance
• HR outsourcing
• Claims assistance
• Your budget. Pricing structures vary depending on the PEO. In most cases, they charge either a per-employee per-month fee or a percentage of the payroll run. If your business has plans to scale, you should consider the increased cost of the PEO as your headcount increases. Will you be able to afford it? 
• Experience and reputation. Does the PEO have experience in the state with Connecticut businesses? Does it have a good reputation? Review sites like Capterra and G2 can provide you with insights based on what past and current clients have to say about the PEO. 
• Benefits. You want to ensure that the PEO's benefits fit your employees’ needs. Do your homework on the range, quality, and cost of the benefits they offer access to.
• Benefits renewal rates. Some PEOs offer introductory rates for their benefits plans and then substantially increase them. Are they clear about their renewal rates and dates? Asking this now will help you avoid unexpected increases or the hassle of switching PEOs after the first year. 
• Integrations. How will the PEO integrate with your current HR systems, tools, and technology?
• Does the PEO specialize in certain industries? Finding a PEO with experience in your industry (especially if it’s niche) can be beneficial. 
• Does the PEO specialize in certain legal or compliance issues? Does your business need to meet specific federal or state regulations or deal with particular legal issues? Consider a PEO with specialized experience in the area.
• Your exit strategy. At some point, you may choose to leave your PEO. Maybe you feel it’s time to move all your HR processes in-house, or perhaps you want to change to a different PEO. Some PEOs are challenging to leave because they require you to remove all their systems and start over with a new one. It’s good to think about this situation before joining a PEO.

Why Rippling PEO is the right choice for your Connecticut business

Rippling PEO is built for speed. Unlike most PEOs that run on software built in the 1980s, Rippling runs on modern, user-friendly software. Rippling combines HR, IT, and Finance all in one place. The result? Simplified and streamlined busy work—from 90-second onboarding to remote IT management.

We handle all your critical compliance tasks, including setting up state and local tax accounts, flagging minimum wage and overtime violations, and much more. You also gain access to Fortune 500-quality benefits at an affordable cost.

With Rippling, you get:

• HR, IT, and Finance support, all in one platform
• Powerful and customizable reporting on any employee data from all of your systems
• Remote employee management tools, including state and local tax registration, paperless onboarding, app and device management, and over 400 app integrations 
• Access to big-company employee benefits plans, plus below-average and predictable renewal rates
• Automatic flagging for federal, state, and local compliance violations, along with recommended plans to resolve each one
• Automated risk management procedures, including ACA and COBRA administration, anti-harassment training, and distributing digital labor law posters to your staff
• Access to a wealth of HR resources, guides, and templates

Unlike other PEOs, Rippling makes it easy to move on and off our PEO if you decide to bring your HR in-house. Transition seamlessly to our all-in-one workforce management platform. Your HR, payroll, and employee data will remain in your account, and all your system integrations will stay intact. Plus, your employees will have the same login credentials and can continue using Rippling the same way they always have. 

FAQs about PEOs in Connecticut

What is a PEO, and how does it work?

A PEO is an organization that partners with a business to provide streamlined administrative HR functions—including HR management, payroll, benefits, and compliance. PEOs typically use a co-employment model—the PEO legally becomes the employer of the company’s staff for tax purposes.

How does a PEO arrangement affect control over my employees?

When you partner with a PEO, you retain control over day-to-day operations and managing your workforce. The PEO takes over HR functions and employment-related HR tasks. 

What is a Certified PEO?

A Certified PEO (CPEO) is a PEO that has met specific IRS criteria related to its background, expertise, finances, and reporting. However, this certification is voluntary and isn’t an official endorsement by the IRS. It simply demonstrates that a PEO has passed a series of assessments. At one time, CPEO status could provide certain tax benefits to businesses, but today, the main advantages of PEO certification are mostly outdated.

What size company can benefit from a PEO?

Companies of all sizes can benefit from a PEO, but small and medium-sized businesses can benefit the most. They can save significantly on admin costs by outsourcing manual HR work. At the same time, their HR teams can concentrate on long-term strategic work. PEOs also help companies offer their employees access to high-quality benefits packages that might have been hard to provide on their own.

How does a PEO charge for its services?

PEOs base their costs on the services they provide and the number of employees in your workforce. The PEO may charge a flat rate per employee or a percentage of your payroll.

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

A PEO will first collect information about your employees, including employment records, payroll data, and benefits information. Next, the PEO will configure their systems to manage your HR, payroll, and benefits administration. This can involve integrating their technology with your systems, if needed. Finally, they may hold sessions to onboard your staff, explain the new processes and benefits, provide systems training courses, and offer ongoing support.

Depending on the size of your company and the services required, it can take just a few weeks to several months to complete the implementation process. 

Are PEOs regulated?

PEOs fall under both federal and state regulations. For additional credibility, many PEOs may choose to be accredited by industry organizations. 

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

Connecticut PEO companies must register with the Connecticut Department of Labor, obtain a business license from the Connecticut Secretary of State, and comply with relevant state regulations concerning employment relationships. Insurance providers working with a PEO must file documentation with the Connecticut Insurance Department.

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

Ending your relationship with a PEO can be a disruptive process. It often requires removing the PEO’s systems from your business. It’s as complex as it sounds. Once that’s done, you’ll need to install and transition to new systems to handle your payroll processing, administering benefits, and other processes the PEO took care of. 

Rippling PEO takes the headache out of this process. You simply switch off the PEO and move to our all-in-one workforce management platform. Your systems, data, and integrations remain intact.

In what states is Rippling PEO available?

Rippling PEO is available in every US state.

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.