PEO in Delaware [2024]

Businesses in Delaware looking to reduce their administrative HR demands can benefit from partnering with a professional employer organization (PEO). By streamlining and automating HR responsibilities like compliance management, workers’ compensation, payroll, and benefits administration, PEOs can help businesses become more efficient. They can also help enterprises—especially small and medium-sized ones—provide access to better benefits at a lower cost. 

While Delaware has a corporate tax rate of 8.7% and a gross receipts tax, there aren’t any state or local sales taxes. However, the cost of living is slightly higher than the national average. A Delaware PEO company can help businesses in The First State offset some of those costs by offering employees access to more affordable benefits—while accessing HR cost savings for themselves.

A number of PEO providers operate in Delaware, so it’s vital you do your due diligence before choosing one. This article can help answer your questions. From worry-free compliance and healthcare guidance to payroll and granular reporting, Rippling PEO is the easiest way to manage your HR and IT in Delaware and across the country. 

Benefits of using a PEO in Delaware

For businesses in Delaware, using a PEO can reduce in-house administrative HR tasks while providing access to better and more cost-effective benefits, advisory services, automated compliance work, and much more.

Offload administrative HR work

When you partner with a PEO, the PEO co-employs your workforce. Under this relationship, you divide employer responsibilities with the PEO. You become the worksite employer and retain all authority over hiring and terminating employees, their salaries, and your company’s strategy and operations, including sales, marketing, research and development, and customer care. 

At the same time, the PEO is designated as the administrative employer. They employ your workers under their federal tax identification number (EIN). Under this arrangement, the PEO manages your employment-related HR work, including payroll, benefits administration, human resources compliance, and more.

To streamline HR management, PEOs rely on a mix of expertise, technology, and established procedures. By reducing the amount of manual administrative work your HR team has to deal with, they have more time to focus on strategic work that drives your company’s success. 

Better employee benefits, at a lower price

PEOs are a popular HR solution for businesses across the country. The National Association of Professional Employer Organizations (NAPEO) reports that over 500 PEOs across the US co-employ 4.5 million workers at 200,000 companies. The large number of workers from so many different businesses gives each PEO strength in numbers. They use the size of “their” workforce to negotiate with insurance providers to help you and your employees access more robust benefits and lower insurance rates. 

While PEOs don’t sell benefits, they do provide access via third-party providers. The benefits they provide access to often include life insurance, disability insurance, mental health support, worksite benefits, commuter benefits, dependent care, and retirement plans. Quality benefits like these help companies hire and retain exceptional talent. For smaller firms, offering robust benefits can be difficult and costly. However, they can provide attractive benefits packages to potential employees by teaming up with a PEO.

The federal Affordable Care Act (ACA) mandates that businesses with 50 or more full-time employees provide healthcare benefits. While there are no state laws concerning health insurance in addition to the ACA, Delaware does offer a marketplace for health and related insurance coverage, but participation isn’t mandatory. 

A PEO can assist Delaware companies in offering the healthcare benefits they’re required to provide, along with benefits that their employees want and need—at a lower rate than they’d be able to negotiate on their own.

Worry-free compliance with Delaware laws

A good PEO can make compliance a breeze. It can assist your business in complying with federal labor and employment laws and state-level and local Delaware laws—which are complicated and constantly changing. The minimum wage is a good example. 

While Delaware has a statewide minimum wage, it increases frequently. It went up to $13.25 per hour on January 1, 2024, and another increase (to $15.00) will go into effect on January 1, 2025. 

Keeping track of minimum wage changes and complying with overtime regulations is vital, whether your workforce is in Delaware or across the country. A PEO like Rippling will automatically identify minimum wage violations based on employees' locations, ensuring compliance with local laws.

Minimum wage regulations are just the beginning. PEOs offer legal and compliance support in many areas:

• Payroll regulations, including the correct classification of employees and contractors; issuing and filing tax forms; reporting, collecting, and submitting payroll taxes to the proper agencies; and adhering to other wage regulations, like overtime laws
• Benefits laws, helping you navigate complex federal laws like the ACA, COBRA, FSA, HSA, and, on the state level, Delaware’s Paid Leave program (which launches on January 1, 2026) 
• Labor laws, including supplying workers’ compensation insurance, assistance in complying with Equal Employment Opportunity (EEO) laws, and displaying labor posters as required by the state

Businesses that violate labor and employment laws can face costly fines and penalties. And yet, non-compliance is a big problem across the country, with the IRS estimating that 40% of small businesses are on the hook for payroll penalties every year. A good PEO service can help your company stay compliant and avoid these unnecessary costs.

Dedicated support team

PEOs know HR. When you partner with a PEO, your business gains access to all their knowledge and experience. This is especially helpful for small businesses and startups that may not have similar internal resources. Not only can a good PEO save you time and money, but it can also offer your HR team assistance and advice on training managers, streamlining benefits administration, creating employee handbooks and guides, analyzing safety practices, and other HR difficulties that might come up.

What to consider when evaluating a PEO service in Delaware

With so many Delaware PEO services to choose from, how do you pick the right one for your business? Here are some criteria for you to consider:

• Your business and HR needs. How can a PEO help your company? Some common PEO services include:
• Payroll processing
• Tax filing and compliance
• Administering benefits
• Staffing and onboarding
• Safety compliance and risk management
• Time and attendance tracking
• Regulatory compliance
• HR outsourcing services

• Your budget. Not all PEOs use the same pricing structure. Some charge a percentage of your payroll run, while others charge per-employee per-month fees. If you have a growing business or plan to scale in the future, consider the cost of the PEO and whether you’ll be able to afford it as your workforce grows. 
• Reputation and experience. Does the PEO have a good reputation? Has it worked with companies in Delaware? Checking review websites like Capterra and G2 is a good way to get a feel for the PEO. How do past and current clients rate their experience?
• Benefits. Take a close look at the benefits plans the PEO offers access to. Does the quality, range, and cost of their plans align with what you and your employees are looking for?
• Benefits renewal rates. Is the PEO upfront about the cost of its benefits plans and any increases after the first year? Some PEOs increase their renewal rates substantially, leaving business owners with bloated, unexpected costs. If you’re unhappy with the increase, you’re left with the difficult task of finding a new PEO after just 12 months. Look for a PEO that’s upfront about how its rates change so that you can plan for any future increases. 
• Integrations. How will the PEO integrate with the tech, systems, and tools you already have?
• Does the PEO specialize in certain industries? Do you operate a business in a niche industry? If so, partnering with a PEO with experience in your field can be helpful. 

• Does the PEO specialize in certain legal or compliance issues? Does your business need to address specific legal issues or government regulations? Look for a PEO with experience doing similar compliance work. 
• Your exit strategy. At some point, you may decide to leave the PEO. Whether it’s to consolidate all your HR in-house or switch to a different solution, you want the transition to be easy. Some PEOs are hard to leave. They make you remove all of their systems, and you have to start over again. Consider this future situation—and how difficult it will be—before you join a PEO.

Why Rippling PEO is the right choice for your Delaware business

Rippling PEO is unique because it integrates HR, IT, and Finance in a single platform. Remote IT management and 90-second onboarding are among a range of simplified and streamlined processes with Rippling. While many PEOs are built on 1980s software, our modern software is fast and easy to use.

Partnering with Rippling enables you to provide your employees with Fortune 500-quality benefits at reasonable costs. You can also put your compliance concerns to rest: We handle your critical compliance tasks, such as automatically flagging minimum wage and overtime violations and setting up state and local tax accounts.

With Rippling, you get:

• HR, IT, and Finance systems in one platform
• Customized and comprehensive employee data reporting 
• Administrative tools for remote teams—such as app and device management, state and local tax registration, and paperless onboarding
• Affordable access to high-quality benefits plans, along with the assurance of below-average, predictable renewal rates 
• Automated flagging and recommended remedies for compliance violations at the federal, state, and local levels 
• Risk management and compliance automation, including digital labor law poster distribution, ACA and COBRA administration, and anti-harassment training for your employees
• Access to Rippling’s extensive library of HR resources, guides, and templates

Rippling PEO ensures an easy transition, whether you’re moving on or off the platform. With most PEOs, switching is a disruptive and difficult process. But if you ever decide to bring your HR in-house with Rippling, our all-in-one workforce management platform secures your HR, payroll, and employee data in your account. Logins and system integrations remain intact, allowing employees to continue using Rippling without interruption. 

FAQs about PEOs in Delaware

What is a PEO, and how does it work?

PEOs, or professional employer organizations, work with companies to provide an array of HR services such as payroll, employee benefits, compliance assistance, and risk management. For tax purposes, the PEO generally utilizes a co-employment relationship and functions as the legal employer of the company’s workforce. 

How does a PEO arrangement affect control over my employees?

Your business will continue to oversee day-to-day operations and employee management. The PEO will assist with employment-related HR administration and compliance oversight. 

What is a Certified PEO?

A Certified PEO (CPEO) has met several IRS requirements related to its background, history, management, and reporting. While the voluntary certification doesn’t signify IRS endorsement, it does demonstrate that the PEO has passed a set of assessments. While CPEOs once provided businesses with tax benefits, today, the benefits of certification are mostly obsolete. 

What size company can benefit from a PEO?

A PEO can benefit a range of companies, but it’s often most advantageous for small to mid-sized businesses. The partnership can enable access to competitive benefits, and outsourcing basic administration can allow HR employees to focus on strategic work.

How does a PEO charge for its services?

PEO pricing is based on a company’s size and the range of services it needs. The charges may be based on a percentage of your total payroll or a flat fee for each employee.

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

The PEO will initially gather and evaluate information about your current HR and employee structure. Once they determine your needs, the PEO will implement systems to manage your HR tasks, such as payroll, benefits administration, and compliance oversight. Often, the PEO will integrate their platforms to allow for streamlined management and even conduct training to help onboard your employees. 

The timeline for the process will vary according to the scope of services and the size of your business. Generally, it takes between a few weeks and a couple of months to complete. 

Are PEOs regulated?

Yes, PEOs are regulated at the federal and state levels. Many gain additional accreditation through industry organizations. 

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

There is no state licensing requirement for PEOs in Delaware. However, PEOs are required to have a Certificate of Authority from the Delaware Division of Corporations to conduct business in the state of Delaware. They must also follow relevant state labor regulations. 

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

Terminating a relationship with many PEOs can cause great difficulty and disruption for your business. You’ll need to remove the PEO systems and find a solution to replace the PEO’s functionality.

With Rippling PEO, moving off the PEO is as simple as turning it off and transitioning to our all-in-one workforce management platform. All your systems, data, and integrations will remain intact.

In what states is Rippling PEO available?

Rippling PEO is available in Delaware and 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.