» NAPEO

Mortgage Brokers gain HUD approval to join a PEO

StaffMarket — Fri, 09 Dec 2016 18:24:13 +0000

HUD Overturns Prohibition against the use of PEOs by Mortgage Brokers

On Monday, November 28, the U.S. Department of Housing and Urban Development (HUD) issued Mortgage Letter 2016-18.

According to a release by the National Association of Professional Employer Organizations (NAPEO), this letter reverses Mortgage Credit Circular 4-92 to allow PEOs to provide services to Federal Housing Administration (FHA) approved home mortgage lenders. The letter specifically allows mortgage lenders to use outside contractors for “human resources services (payroll processing, payment of employment taxes and the provision of employee benefits) provided by a professional employer organization or a similar entity.

Since 1992, HUD has prohibited PEOs from contracting with FHA-approved lenders. In 1995, an internal HUD memo reconfirmed the prohibition on leasing of decisional employees, and also indicated a position that it was “imprudent” for an FHA-approved lender to lease any employees. In 2008, HUD sent another letter to NAPEO’s outside counsel reaffirming the HUD prohibition against the use of PEOs/employee leasing companies by FHA-approved lenders. With the release of Mortgage Letter 2016-18, HUD has reversed a nearly 25 year old policy that was based on an erroneous and outdated view of the PEO industry.

This policy reversal by HUD would not have been possible without the lobbying efforts of TriNet. TriNet’s internal and external lobbying team met with HUD officials on multiple occasions and worked directly with HUD leadership to change this policy. Their persistence and hard work were key in this successful effort. In addition, NAPEO sent a letter at the same time TriNet was meeting with HUD laying out the case for repealing this policy directive, reinforcing their lobbying efforts.

The reversal of the HUD prohibition on using PEOs by mortgage brokers opens a significant market for PEO services, and is a substantial federal lobbying victory for the PEO industry.

Mortgage brokers and companies providing professional brokerage services are now able to reap the benefits of a PEO that thousands of other businesses across the USA have been doing for many years.

image courtesy of Timothy Vollmer at Flickr

New Study Shows PEO Clients Grow Faster

Jim Hamilton — Fri, 20 Sep 2013 00:00:00 +0000

New Study Shows PEO Clients Grow Faster

Small Businesses Using a PEO Are Growing

While the overall environment for small businesses remains challenging, a new study commissioned by the National Association of Professional Employer Organizations (NAPEO) shows that small businesses using a PEO are growing. The increasingly burdensome tasks of meeting tax and regulatory compliance may be a factor hindering small business growth. But, this study shows that businesses who outsource those non-revenue producing compliance tasks to a PEO have reduced both their costs and risks. Those businesses are growing.

Highlights from the September 2013 NAPEO Study

Key stats in the study show that PEO clients:

Have grown 9 percent faster than small businesses in general since 2010
Save at least 21% on HR administration costs
With 10 to 50 employees are over twice as likely to have workers in a retirement plan
With less than 10 employees are over three times as likely to have workers in a retirement plan

View the study demonstrating that joining a PEO improves business survival rates.

NAPEO Announces Ad Initiative

StaffMarket — Fri, 17 May 2013 04:00:00 +0000

NAPEO Announces New Advertising Initiative

NAPEO recently release a new slogan, “Keep Calm and Call a PEO”. The advertising is shown with the image of the British crown. The ad copy appears to be a take off from a campaign in Britain at the beginning of World War II that was meant to keep up the spirits of the British population who feared invasion. Watch a video about the origin of the “Keep Calm” campaign. Given the situation facing many small and medium sized business today, the campaign slogan appears very appropriate for the times.

Generate your own “Keep Calm” slogans here

What is NAPEO?

NAPEO is a trade association who’s mission is to advocate the PEO business model to regulators, elected officials and businesses throughout the USA. NAPEO was formed in 1984 as a industry trade organization that works as an advocacy group for the PEO industry. The group name was originally the National Staff Leasing Association and changed its name to National Association of Professional Employer Organizations in 1994. PEOs provide employer related services to over 250,000 businesses throughout the USA.

Recent Contributions
In March 2013 NAPEO promoted The Small Business Efficiency Act (S. 479) to the US Senate that will improve tax compliance and create needed certainty for small businesses using a PEO. This act is strongly supported by senator Bill Nelson of Florida and senator Chuck Grassley of Iowa.

Is a PEO required to be a NAPEO Member?
No. NAPEO is not a regulatory body and association membership is not required for any PEO.

Is NAPEO Membership Important to PEO Clients?
Some clients may prefer to engage a PEO that is a member of NAPEO, however a PEOs membership in NAPEO does not imply anything regarding the financial solvency or business practices of the PEO. Membership in NAPEO does imply that the PEO is involved with and supports the growth of the industry and backs that up with funding. Each PEOs annual dues to NAPEO are based on the size of the PEO, where larger PEOs pay a higher annual membership amount.

NAPEO – The Economics of Advocacy

One of the primary missions of NAPEO has been their push for “Legislative Certainty” with both Federal and State legislation. The areas of employment, taxes, regulatory compliance, workers’ compensation insurance, and employee benefits are highly regulated (See PPACA!). NAPEO has long employed some of the nation’s best employment lawyers and law firms to explain the PEO model to the US Congress and to state legislators. Due to each states regulatory control over insurance and unemployment insurance taxes (UI), NAPEO has established and promoted their “model legislation” that they have taken before the legislature in many states. Most states have adopted this model legislation while others have modified it slightly regarding reporting IDs for UI and for workers comp mod rate handling. No PEO in the nation could afford to individually fund this advocacy in each state and at the federal level. NAPEO fills this need for the industry in an economical way, although it is still expensive.

StaffMarket and NAPEO

StaffMarket has been an associate member in the National Association of Professional Employer Organizations (NAPEO) for over a decade and we believe strongly in their mission. As association members, StaffMarket has sponsored events at the annual national conference. The StaffMarket team often consults members of the NAPEO legal staff when StaffMarket clients have posed questions regarding specific details related to the PEO co-employment model. We believe every PEO has an obligation to support the mission of NAPEO since all PEOs ultimately benefit from their efforts to clarify the legislative and regulatory environments for PEOs. Click here to get more information about using

NAPEO membership as a PEO selection criteria.

PEO Industry Members Promote Small Business Efficiency Act (SBEA)

StaffMarket — Tue, 22 May 2012 04:00:00 +0000

PEO Industry Members Promote Small Business Efficiency Act (SBEA)

NAPEO Leads Efforts to Promote Legislation

Members of the National Association of Professional Employer Organizations (NAPEO) met in Washington DC this week for the annual NAPEO legislative leadership conference. While attending the conference many PEO executives also took the opportunity to meet with various legislators and staff regarding their promotion of the Small Business Efficiency Act (SBEA). The bill is known as
H.R. 2466 in the House of Representatives and
S. 1908 in the Senate with sponsorship provided by representatives Mike Thompson (D-CA) and Kevin Brady (R-TX) in the house and Bill Nelson (D-FL) and Charles Grassley (R-IA) in the Senate.

About the Small Business Efficiency Act

The act has been advocated by the PEO industry for many years and seeks to solidify legislative certainty for the PEO business model in regards to tax collection authority and responsibility and would require audited financial statements and bonding for any PEO seeking IRS certification. The SBEA also seeks to ensure that except for payment of employment taxes, federal common-law employer laws remain unaffected. According to the national association:

The bill was passed by the Senate twice in 2007 and enjoys bipartisan support in the U.S. House and the Senate.
Budget proposals from both President Obama and President Bush have included provisions similar to the SBEA.
The SBEA contains provisions that have been called for by the Treasury Inspector General for Tax Administration.

PEO Industry Group Lobbying

Since 1998 NAPEO member dues have funded over five million dollars for lobbying on federal legislation to promote the PEO industry.

Part of the most recent initiative to advocate the Small Business Efficiency Act included providing a SBEA and NAPEO flyer containing an overview of the bill to all members of congress.