Michigan PEO Licensing Deadline Nears

Michigan PEO Licensing Deadline Nears

Michigan PEO Licensing Enacted

The state of Michigan recently enacted legislation regulating all Professional Employer Organizations (PEO) in the state. All PEOs with clients in the state must submit an application and pay a fee to the state by July 1, 2012. The Michigan bureau of Commercial Services (BC) has indicated that licenses will be issued by issues by September of 2012 and no PEO may operate in Michigan after that date without first obtaining a license.

Full PEO license Requirements

The state of Michigan legislation offers PEOs two types of licenses:
A Professional Employer Organization License, and a Limited License.
The application for a full PEO license requires disclosure of ownership of the PEO or PEO Group for all equity members with more than a 10% interest in the PEO. In addition all senior management must be identified. Additional documents including financial statements and financial audit results must be provide to the state. Each PEO must demonstrate at least $100,000 of working capital to unsure the payment of statuatory obligations, taxes and workers’ compensation insurance premiums. PEOs that cannot demonstrate sufficient working capital may provide a third party bondor irrevocable letter of credit as a substitute.

Review the Michigan Professional Employer Organization License Application

Limited Professional Employer Organization License

A PEO is eligible for a limited license if it meets all of the following conditions:

  • PEO is domiciled outside Michigan and is licensed or otherwise regulated as a PEO in another state.
  • PEO does not maintain an office in this state or does not directly solicit clients located or domiciled in this state.

  • PEO Does not have more than 50 covered employees employed or domiciled in this state on any given day.

A limited license is valid for 1 year and may be renewed. Requires $1,500 application fee and an annual $1,500 dollar license fee.
Review the LIMITED Michigan Professional Employer Organization License Application

Review the full Michigan PEO regulations