What is a PEO in New York
A PEO in New York serves as a co-employer, handling essential HR functions like payroll, benefits, and compliance while your business maintains control over operations and decision-making. This arrangement allows companies to focus on growth while reducing the administrative burden and legal risks associated with HR.
By partnering with a PEO in New York, businesses can simplify HR, stay compliant with state regulations, and offer competitive employee benefits, all while focusing on growth. Whether you're a startup or an established company, a PEO helps you navigate New York’s complex employment landscape.
Mandatory Requirements when Partnering with a PEO in New York
In New York, it’s mandatory for all employers, including those partnering with PEOs, to have valid workers’ compensation insurance. Failure to do so is a criminal offense with potential fines up to $100,000 USD as per New York Labor Code, section 3700.
Benefits Of Using a PEO In New York
Payroll Processing and Compliance. A PEO manages payroll processing, tax withholdings, and filings with New York state agencies, ensuring compliance with state tax laws and employment regulations.
Benefits Administration. PEOs offer access to comprehensive employee benefits packages, including health insurance, retirement plans, and other perks that help attract and retain top talent in New York.
Workers’ Compensation. PEOs ensure your business complies with New York’s workers’ compensation requirements, handling claims and minimizing risk.
HR and Legal Compliance. PEOs bring expert HR support, making them especially valuable for small businesses. With constantly changing New York labor laws, a PEO offers guidance on employee handbooks, harassment prevention, terminations, and safety regulations, ensuring your business stays compliant.
Employment Laws and regulations in New York
A PEO (Professional Employer Organization) is an excellent solution for small businesses in New York to manage HR, payroll, and compliance with the state's complex labor laws.
New York has some of the most stringent regulations around minimum wage, overtime, paid sick leave, and employee classification, which can be overwhelming for small businesses without dedicated HR resources.
Here’s a brief overview of some key laws and regulations specific to New York.
New York Employment Laws
A PEO helps businesses comply with both federal and New York-specific labor laws, which can be complex and frequently change.
PEOs in New York assist businesses in adhering to various labor laws, including:
- Minimum Wage:
- New York City, Long Island, and Westchester County: $16.00 per hour (effective January 1, 2024).
- All Other New York State Counties: $15.00 per hour (effective January 1, 2024).
- Overtime: Overtime applies in New York for hours worked over 40 in a workweek at a rate of 1.5 times the employee's regular hourly wage.
- Sick Leave: Employers must provide paid sick leave. Employees are entitled to accrue up to 40 hours of paid sick leave per year.
- Meal and Rest Breaks: New York law requires employers to provide meal breaks to employees working more than 6 hours, typically a 30-minute unpaid break.
Payroll Laws In New York
- Payroll Schedule: In New York, businesses typically use a weekly, bi-weekly, semi-monthly, or monthly payroll cycle.
- Tax Compliance:
- Employers must pay state unemployment insurance, which ranges from 1.5% to 9.9%.
- Employers and employees both contribute to Disability Benefits Law (0.5% for each) and Paid Family Leave (0.511% for each).
- Employers must withhold federal income tax, Social Security, and Medicare taxes.
Benefits Laws In New York
PEOs in New York provide access to competitive employee benefits such as:
- Health Insurance: Leveraging the PEO’s group purchasing power, small businesses can access health insurance plans at lower rates than they could independently.
- Retirement Plans: PEOs often offer retirement options like 401(k) plans, which can be beneficial for small businesses looking to provide a retirement savings option without significant administrative burden.
Additional requirements and enforcement in New York
- Workplace Safety: Employers must comply with both federal OSHA standards and New York-specific safety regulations.
- Workers' Compensation: Employers must provide workers' compensation coverage. Non-compliance may result in fines and penalties.
- Enforcement Agencies: The New York State Department of Labor (NYSDOL) and the U.S. Department of Labor enforce labor laws in the state.
- Overlapping Laws: If state and federal laws overlap, the most employee-friendly law typically prevails. For example, the Paid Family Leave in New York provides benefits in addition to federal FMLA.
Looking to hire employees in New York?
Check out our comprehensive state hiring guide.
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Understand employer tax implications and payroll requirements.
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Review state specific employment laws and regulations.
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Get insights on payroll, benefits, and employee classification.
How to Choose the right PEO in New York
Selecting the right PEO in New York is essential for navigating the state's intricate labor laws while ensuring compliance and efficiency. Follow these key steps:
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Focus on New York-Specific Experience. Ensure the PEO has expertise in navigating New York’s labor laws. This includes understanding nuances like mandatory sick leave, wage orders, and workers’ compensation requirements.
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Service Flexibility. Choose a PEO that offers flexible services tailored to your business size and industry. New York’s regulations can vary by sector, so a PEO with industry-specific knowledge is valuable.
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Track Record and Compliance History. Research the PEO’s compliance history to ensure they have a proven track record of helping businesses avoid penalties and stay compliant with New York’s complex employment laws.
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Consider Employee Benefits. A PEO can offer access to more affordable and comprehensive employee benefits, which are crucial for attracting and retaining top talent in New York’s competitive job market.
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Assess Customer Service. Responsive customer service, dedicated human support teams (not AI), and robust HR technology are key factors in ensuring a smooth partnership with the PEO. It’s important to find a partner who supports your people, when they need it most.
By following these steps, you can select a PEO that aligns with your business goals and ensures compliance with New York’s complex labor regulations. For more detailed insights, check out
Playroll’s Guide to Employment in New York.
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