How Much Does a New York Professional Employer Act Bond Cost?
The New York Department of Labor requires all professional employer organizations (PEOs) within the state to file a $75,000 surety bond. Rates start at just $750, or 1%, if you have excellent credit.
However, pricing can vary from 1–10% based on personal credit score. After your application goes through underwriting review, you'll receive a free personalized quote. Apply now to get started.
If you have bad credit, don't worry. We approve 99% of bond applicants for the best rate available through our Bad Credit Bonding Program.
How Do PEO Bonds Work in New York?
This bond keeps the principal (professional employer organization) liable for breaches upon the New York Professional Employer Act of 2003. PEO’s are expected to fully comply with the rules and regulations of the law established by this act. General requirements and provisions of this act include:
- Written agreement between client and and employer organization stating responsibilities
- Employer organization is responsible for withholding payroll taxes and employee benefits of worksite employers
- Employer organization is considered employer for sponsoring welfare benefit plans for its workforce employees
- Employer organization is responsible for reporting and paying all contributions to the Unemployment Compensation Fund
If you operate an employment agency rather than a PEO, visit our New York Employment Agency Bond Guide to apply and learn more.
What Happens If There Is a Bond Claim?
In the case of a valid claim, the surety is liable for all damages up to the amount of the bond (in this case, $75,000). The principal is still expected to compensate the surety the equivalent amount of money, required by the indemnification agreement.
Who Needs a PEO Bond in New York?
Professional employer organizations are required to post surety bonds by the New York Department of Labor. The bond amount is $75,000. These bonds are valid for 1 year from the date of issuance. If the surety wishes to terminate the bond, it must provide the Department of Labor with a 30-day notice of cancellation. The surety remains liable for all actionable claims filed against the bond during this time.
How to Become a Professional Employer Organization in New York
Professional employer organizations must register with the Department of Labor within 180 days after the end of its fiscal year. Include the following materials in your registration application to become a PEO:
- $1,000 registration fee
- Name and address(es) of PEO
- PEO taxpayer or employee identification number
- List of all entities with 5% or greater ownership interest (private) or 50% ownership interest (public)
- $75,000 surety bond
After one year, you'll need to renew your registration with the department, which costs $500.
A copy of the registration/renewal form for professional employer organizations is provided in the “Additional Resources” section.
