New federal legislation enhances value of Insperity services and removes sales obstacles
Insperity believes it will provide additional regulatory certainty and creditability to Professional Employer Organizations (PEO) and enhance the value of Insperity’s PEO services.
The SBEA passed the Senate along with the tax extenders bill Tuesday evening and is on its way to the president for signature.
“The passage of the Small Business Efficiency Act represents a major milestone for the PEO industry in general and Insperity in particular, providing a stamp of approval on the industry we helped to establish in 1986,” commented Paul J. Sarvadi, Insperity chairman and chief executive officer.
“The SBEA will provide certified PEOs with successor employer status for federal payroll taxes which eliminates the potential for double taxation of FICA and FUTA when a business contracts with a PEO during the year. When the SBEA is fully implemented, we expect this provision to reduce our first year costs associated with this double taxation and eliminate a sales hurdle that we have historically faced during the year with many prospects.”
Sarvadi added, “We commend the action of Congress in showing its support of small and medium-sized businesses throughout America by passing this significant legislation and thank all of the co-sponsors of the legislation. In particular, we would like to acknowledge the leadership of Congressman Kevin Brady, who has long recognized the vital role that these businesses serve in our communities and the many ways in which a PEO such as Insperity helps businesses succeed.”
“For over 10 years, Insperity has been strongly advocating for the passage of a federal PEO bill, and we are very pleased that the SBEA has become a reality,” said Sarvadi. “The SBEA will provide a federal regulatory framework and certification program in which defined financial standards will enhance the reputation and value of the PEO industry and provide assurances to clients, prospects and their advisors.”
Additionally, the SBEA will clarify businesses’ continued eligibility for federal tax credits while utilizing certified PEO services. Sarvadi further commented, “This removes another sales hurdle as it provides assurance to our business prospects that they will not lose their eligibility for federal tax credits when becoming our client.”
The SBEA was originally included as part of H.R. 647, the Achieving a Better Life Experience (ABLE) Act of 2014, which overwhelmingly passed a vote in the House of Representatives. The bill was then merged with H.R. 5771, the Tax Increase Prevention Act of 2014, which also passed the House and then the Senate.