PEO in Maryland [2024]

A professional employer organization (PEO) makes life easier for small to midsize businesses by handling administrative human resources tasks like payroll processing, benefits administration, compliance management, and workers’ compensation insurance. Plus, a PEO helps businesses access better, more affordable employee benefits.

Employee benefits are the second-highest employee-related expense after wages, and Maryland is the seventh-most expensive state in the US. Whether your business is based in Baltimore or Aberdeen, using a PEO can help you attract and retain top-tier talent by offering your employees access to comprehensive benefits at a lower price. 

If you’re unsure how to choose a PEO, this article will help you evaluate your options in Maryland. From handling manual (and costly) compliance work to remote laptop management, Rippling PEO makes it easy to hire and onboard people anywhere—in Maryland and across the US.

Benefits of using a PEO in Maryland

What can a Maryland PEO do for you? Among the many benefits, it can save you tons of time on administrative tasks, help you offer competitive benefits plans, and ensure your business stays compliant.

Offload administrative HR work

When you partner with a PEO in Maryland, you enter into a co-employment arrangement where you share employer responsibilities. As the worksite employer, you keep control over hiring decisions, salary structures, and overall business strategies like research and development, marketing, sales, and customer support. 

As the administrative employer, the PEO employs your workforce under its federal tax identification number (EIN) to take care of HR tasks like payroll, benefits management, HR compliance, and more. 

PEOs leverage technology, expertise, and efficient processes to simplify HR management. By taking administrative tasks off your plate, they allow your business to better concentrate on strategic work that directly impacts your success.

Better employee benefits, at a lower price

There are over 500 PEOs in the US, co-employing 4.5 million workers at over 200,000 businesses. Since PEOs co-employ so many people, they can use their economies of scale to negotiate better prices on benefits packages from insurance providers, giving you access to cost-effective benefits that would be hard to access on your own. 

PEOs don’t sell the benefits themselves, but offer access to a range of benefits plans through third-party providers, often including health insurance, life and disability coverage, worksite benefits, mental health support, retirement plans, and more. 

Across the US, employers with 50 or more employees must provide health insurance benefits, according to the Affordable Care Act (ACA). And in Maryland, the Family and Medical Leave Insurance (FAMLI) program will go into effect starting January 2026. Employers will have to pay workers up to $1,000 a week for up to 12 weeks while they take time off to care for themselves or a family member. A PEO can help Maryland businesses provide the required benefits—plus any other additional benefits—while saving costs.  

Worry-free compliance with Maryland laws

In Maryland, a PEO goes beyond federal compliance and helps you navigate the ins and outs of state and local Maryland laws, which can be a bit tricky. Take the minimum wage, for example. Statewide, it's $15.00 per hour, regardless of company size (more than double the federal minimum wage). But many cities and counties in Maryland set an even higher minimum wage than the state—and those rates are constantly changing.

It's a lot to keep track of, but a PEO like Rippling takes the hassle out of tracking minimum wage regulations. It automatically identifies potential violations based on your employees' locations, ensuring you comply with all local laws. It can also help you maintain compliance with:

• Payroll regulations: Correctly categorize employees and contractors, complete and file tax forms, submit reports on time, collect and deposit payroll taxes to the right authorities, and comply with additional wage laws, like overtime requirements
• Benefits laws: Adhere to Maryland’s paid sick and safe leave laws and federal laws like the Affordable Care Act (ACA), COBRA, FSA, and HSA, and other benefits-related regulations
• Labor laws: Supply workers’ compensation insurance and follow the Maryland Occupational Safety and Health (MOSH) Act of 1973 and the Maryland Fair Employment Practices Act (FEPA)

Failure to comply with these laws can lead to hefty fines and penalties. According to IRS estimates, about 40% of small businesses face payroll penalties annually. Using a PEO service in Maryland provides valuable compliance support, helping to avoid these financial pitfalls.

Dedicated support team

PEOs bring HR expertise to your company—it’s like expanding your HR team without hiring more employees directly. That HR knowledge is especially crucial for small businesses and startups lacking internal HR resources. A PEO not only saves you time and money but also provides guidance on streamlining benefits administration, crafting an employee handbook, training managers, evaluating safety practices, and any other HR challenges.

What to consider when evaluating a PEO service in Maryland

You'll find a range of PEO providers to choose from in Maryland. Here are some things to consider when selecting the best PEO for your business:

• Your business needs: What specific services do you need from your PEO? Most PEOs offer the following:
• Payroll services and processing
• Tax filing and compliance
• Benefits administration
• Recruiting and onboarding
• Safety compliance and risk management
• Time and attendance tracking
• Regulatory compliance
• HR outsourcing
• Your budget: Different PEOs in Maryland have different pricing structures, often charging per-employee per-month fees or a percentage of each payroll run. Keep your company’s future growth in mind to ensure your PEO stays affordable as you scale.
• Experience and reputation: Has the PEO worked with other businesses like yours in Maryland? Does it have a good reputation? Check review sites like G2 and Capterra to see what past and current clients have to say.
• Benefits: Evaluate the quality, range, and cost of benefits plans the Maryland-based PEO offers access to. Make sure that the plans align with your employees' preferences and needs.
• Benefits renewal rates: Check if the PEO is transparent about how much its benefits plans increase in cost after the first year. Some PEOs inflate renewal rates, so you’ll want to avoid nasty surprises by choosing a PEO that clearly communicates potential rate changes.
• Integrations: Consider how the PEO will integrate with your existing systems, tools, and technology.
• Does the PEO specialize in certain industries? If your business operates in a niche industry, expertise in that field can be beneficial.
• Does the PEO specialize in certain legal or compliance issues? This is crucial if your business needs to adhere to specific federal or state regulations.
• Your exit strategy: You might not stay with your PEO forever—plan for the future by considering your exit strategy. Some PEOs make it challenging to transition out, requiring a complete overhaul of your systems.

Why Rippling PEO is the right choice for your Maryland business

Rippling PEO stands out from other Maryland PEO companies, running on fast and easy-to-use modern software. It’s the first PEO to sync HR, IT, and Finance in one platform to simplify all your busy work—from 90-second onboarding to remote IT management. 

We handle crucial compliance tasks, like setting up state and local tax accounts and workers’ compensation insurance, while giving your team access to premium benefits at affordable rates.

With Rippling, you get:

• HR, IT, and Finance in one platform
• Robust and customizable reporting capabilities
• Tools for remote team management, including state and local tax registration, paperless onboarding, and app and device management
• Access to high-quality benefits plans and below-average, predictable renewal rates
• Automatic notification of federal, state, and local compliance issues, along with recommended solutions  
• Automated compliance and risk management processes, covering ACA and COBRA administration, anti-harassment training, and digital distribution of labor law posters to your employees
• Access to an extensive library of HR resources, guides, and templates

And if you ever choose to bring HR fully in-house, it’s easy to transition away from Rippling PEO.  You can simply switch off the PEO and move onto our all-in-one workforce management platform in minutes. All your HR, payroll, and employee data stays in your account, your integrations remain intact, and your employees keep the same logins—so there are no new processes for them to learn. 

FAQs about PEOs in Maryland

What is a PEO, and how does it work?

A PEO is an organization that teams up with small to midsize companies to offer all-encompassing HR solutions, including payroll, benefits administration, HR management, and help with compliance. PEOs use a co-employment model and become the legal employer of the company’s workforce for tax purposes.

How does a PEO arrangement affect control over my employees?

When partnered with a PEO, you maintain full control over the day-to-day operations and management of your employees. The PEO only handles administrative HR functions and employment-related tasks, allowing you to focus on core operations.

What is a Certified PEO?

A Certified PEO (CPEO) is a PEO that meets specific IRS criteria related to its background, expertise, finances, and reporting. Certification is voluntary and doesn’t mean the IRS endorses the PEO—it simply shows that the PEO has passed a series of certification assessments. While CPEOs used to offer certain tax benefits, these advantages are no longer applicable.

What size company can benefit from a PEO?

PEOs can help businesses of all sizes, but small to midsize businesses often reap the most benefits. PEOs help them access high-quality insurance plans at affordable rates. They also help these businesses save on administrative costs by outsourcing manual HR tasks, allowing their HR teams to focus on strategic work. 

How does a PEO charge for its services?

The cost of using a PEO depends on the services they offer and the number of employees. PEOs may charge a flat fee per employee or a percentage of the total payroll.

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

The PEO first collects essential information about your employees, such as payroll data, employment records, and benefits information. Then, they set up their systems for your HR, payroll, and benefits administration—integrating their technology with your systems if needed. They may conduct onboarding sessions to explain new processes and benefits and teach your employees how to use the PEO system. The entire process can take a few weeks to a couple of months, depending on your business size and the complexity of services needed.

Are PEOs regulated?

Yes, PEOs must adhere to federal and state regulations. Many opt for accreditation by industry organizations to enhance their credibility.

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

Maryland doesn’t require any state-level licenses for PEOs. However, PEOs in Maryland must still comply with state regulations governing employer-employee relationships.

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

With most PEOs, ending the relationship involves a complex process of removing their systems from your business. This can be inefficient and disruptive as you seek new systems for payroll processing, benefits administration, and other processes. Rippling PEO simplifies the transition, allowing you to switch off and move to our all-in-one workforce management platform while preserving your systems, data, and integrations.

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.