H.R. 2466- Small Business Efficiency Act
In working to keep you abreast of changes in the Professional Employer Organization (PEO) marketplace, H.R. 2466 was introduced on July 8th, 2011 by Congressmen Mike Thompson (D-CA) and Kevin Brady (R-TX). This bipartisan legislation ensures better compliance with complex federal employment tax responsibilities and would make it easier for companies to make the switch year round to a PEO model.
The National Association of Professional Employer Organizations (NAPEO), the premier trade association and voice of the PEO industry strongly endorses this bill. In addition many of the PEOs industry wide have showed immense favor for the legislation.
According to NAPEO, here is a breakdown of how the bill will affect small business and will provide important clarity by:
- The bill would give credit to clients for payroll taxes paid prior to joining a PEO, meaning there would be no wage base tax restarts.
- It would also provide that if a client satisfies their federal payroll tax obligation when it remits payments to a PEO.
- Clarifying that a PEO is not treated as a successor employer for the purpose of prior client liabilities.
It would also add another layer of protection for small businesses in the fact that the only PEOs eligible for inclusion in the bill would be Certified PEOs (CPEO). While the requirements for becoming a Certified PEO (CPEO) are strikingly similar to necessary requirements found already in numerous state laws, it would ensure more security to client of the PEO.
We support H.R. 2466, because it helps stimulate growth in the economy and small business drives our country. Our belief is that PEOs do a lot to spur economic growth from startups to established businesses and this is a great step in the right direction to returning our country and small business back to profitability.
To learn more about the specifics of this legislation, here are some helpful links.
As further developments are made on H.R. 2466, we will keep you informed, let's do more.