New York offers extensive rights and protections to workers, making its state laws some of the most comprehensive in the US. Businesses can partner with a professional employment organization (PEO) to ensure payroll and HR compliance, enabling CFOs and finance teams to reprioritize resources and focus more on growth and development.
Read on to explore the process and benefits of partnering with a PEO in New York State.
The role of PEOs in New York
Companies looking to streamline their operations and handle HR more effectively often turn to PEO providers. These business solutions cover a broad range of functions including payroll processing, benefits administration, and compliance management. By delegating these tasks to the PEO, teams can focus more on strategic initiatives and driving growth.
When a company partners with a PEO, they enter into a co-employment relationship. The provider assumes many responsibilities and liabilities but the client company retains control over all the daily activities of their employees.
In New York, the state regulates PEO companies and requires them to obtain a license. It’s possible to check whether providers are compliant by searching the company name against the list of registered providers.
All businesses in New York must secure worker’s compensation and disability insurance for their workforce. As a legal co-employer, a PEO is no different. The state requires them to show evidence of these plans before awarding them a license.
Benefits of New York PEO services
Partnering with a PEO enables businesses to optimize their HR and payroll processes, access lucrative employee benefits, and ensure compliance with New York’s many state laws.
Efficiency
A PEO allows businesses to outsource labor-intensive HR functions and free up more time and resources for long-term initiatives. Consequently, CFOs and finance teams can focus more on strategic planning and analysis.
PEO services often include sophisticated HR and payroll solutions. Organizations can use these to automate processes like compliance monitoring and tax filing, thereby making their operations even more efficient. As these platforms are under the expert oversight of the PEO provider, the client can give their full attention to other projects.
Access to expertise
Understanding the complex New York state laws requires specialized skills and knowledge. A PEO offers on-demand expertise that’s typically beyond the reach of startups and small businesses. Instead of straining their resources by hiring in-house, companies can benefit from the provider’s more predictable monthly costs.
By engaging with a PEO, business leaders can also ensure that decisions are well-informed and supported by the latest data. All teams can benefit from the provider’s expert guidance on the best HR and payroll practices.
Affordable employee benefits packages
Small to medium-sized businesses can access more affordable employee benefits plans via their PEO. As the provider has a larger workforce, they have more collective bargaining power than the client. They can negotiate better rates on essential benefits including health insurance and retirement plans.
With the improved benefits plans, small to medium businesses are more likely to attract and retain talent. They also have a better chance of outbidding large corporations in the state’s demanding job market.
Using a PEO to secure deals on benefits is especially crucial in New York, as the state has more stringent benefits requirements than many other places in the US. The PEO ensures employers provide all the right plans while keeping their insurance costs low.
Improved compliance management
A PEO can be make-or-break for New York businesses when labor law violations can lead to severe penalties, legal cases, and reputational harm. Providers guarantee continuous compliance with all the state’s regulations, thereby minimizing these risks and protecting the company.
New York is known for its complex and constantly changing laws. Engaging a PEO means organizations don’t have to worry about interpreting statutes wrongly, missing a critical detail, or applying an outdated regulation.
For example, New York has recently tightened many labor laws to offer workers more protections. The state just passed a Captive Audience Law which prohibits employers from discriminating against workers who refuse to attend certain meetings. As the law is open to interpretation in some respects, businesses may need help to understand what it means and avoid the potential $500 USD in penalties.
It’s especially important to comply with New York’s anti-discrimination laws which come with high fines. The Department of Labor recently awarded $2 million in damages to female employees who were the subject of unfair compensation practices.
Manage payroll, benefits, and HR for your US team with Deel’s PEO and US payroll.
Payroll, labor, and employment laws in New York
Organizations may find it challenging to navigate and stay updated with New York’s intricate state laws. When you partner with a PEO, these become the provider’s responsibility.
Here’s an overview of some of the New York-specific regulations that employers need to be aware of:
Payroll and benefits laws
- Minimum wage: The minimum wage varies by region—it’s $16 in New York City, Winchester, and Long Island but $15 elsewhere in the state. Employers can use the Lookup Tool to check the rates they should offer
- Pay frequency: The minimum pay frequency depends on the role and industry. Generally, businesses should pay wages at least twice a month
- Final paychecks: Departing employees should receive all their remaining wages on the next payday
- Tipping: New York sets a minimum that service workers should receive from wages and tips. Again, it differs between jurisdictions
- Overtime: Employees are entitled to overtime pay at 1.5 times the rate of their normal pay for working over 40 hours in a standard week
- Sick leave: New York has a tiered system for leave policies based on business size and net income. For example, if you have between 5 and 99 employees, you must provide at least 40 hours of paid sick leave
- New York Paid Family Leave: Employees can take up to 12 weeks of paid family leave (PFL). If the leave falls under both PFL and the Family and Medical Leave Act (FMLA), the business can require them to take this concurrently
- Pay transparency: Companies with over three employees must include salary ranges in any recruitment material such as job ads or hiring boards. The Pay Transparency Law also requires employers to state whether a position is commission-based
- Salary History Ban: Employers are prohibited from asking prospective or current employees about their historical salary or compensation. This state-wide ban also prohibits them from seeking this information from other sources
Labor laws
- Meal and rest breaks: All workers are entitled to an unpaid lunch break between 11 AM and 2 PM for any shifts that are six hours or longer. Some may be allowed to take more, depending on the nature of their work, the length of their shift, and their start and finish times
- Whistleblower protections: New York’s whistleblower laws protect employees from discipline or retaliatory action for reporting misconduct, corruption, criminal activity, and more
- Call-in pay: If a worker is required to report to work, but is not assigned any work upon arrival or is sent home, they may be entitled to “call-in pay”. Employees in private workplaces are entitled to four hours’ pay at the minimum rate
- Workplace health and safety: In addition to OSHA, employers must also comply with the New York State Division of Safety and Health Standards (DOSH)
Employment laws
- Worker classification: New York defines an independent contractor as an individual that’s “free from supervision, direction, and control in the performance of their duties”. Even if the business and the worker disagree, the state may decide it’s an employment relationship. Misclassification can lead to penalties, debarment, or jail time depending on the seriousness of the offense
- Separate business entity: The state differentiates between sole proprietors and employees. Corporations must meet 12 criteria to be considered a separate entity
- Unemployment insurance: Employers are required to pay Unemployment Insurance which funds assistance for individuals who are without work through no fault of their own
- Recordkeeping: Businesses must keep records of their employees, classifications, payroll, and accidents for up to four years. If an employer is found guilty of misrepresentation, they may face fines ranging from $1000 to $50,000 for every ten days of non-compliance
- Fair Chance Act: In New York City, employers cannot ask job candidates about any prior convictions until the end of the hiring process. They can only ask about unsealed misdemeanors, pending charges, and felony convictions
- Clean Slate Act: This legislative initiative (going into effect November 2024) is designed to automatically seal certain criminal records after a specific period of time, contingent upon the completion of the individual's sentence and a waiting period without new convictions. The act aims to remove barriers to employment, housing, and education for individuals with past criminal convictions
- Terminations: New York is an “at-will employment” state, which means employees can be terminated for any reason, at any time, if they don’t have a written contract (so long as it isn’t discriminatory)
Additional requirements and enforcement
The above information covers just some of the labor, payroll, and employment laws in New York. Where there’s an overlap between local, state, and federal laws, organizations must follow the ones that offer the most rights and protections to their workforce.
See also: US Payroll Tax Guide: New York
Harness the cost-effective scale of a Professional Employer Organization with our in-depth guide.
How to choose the right PEO in New York
Finding the best PEO for your New York business calls for a thorough evaluation of your business needs and interests. As the state has particularly complex laws, it’s also essential to consider whether potential providers can help you maintain compliance.
Follow this step-by-step process to ensure you find a New York PEO that ticks all the boxes:
1. Clarify your current and future HR needs
Start by thoroughly reviewing your current HR operations and identifying areas where you’re investing too much time or resources. Consider both your immediate and long-term strategy.
Then determine the specific HR and payroll services you require such as tax filing, benefits administration, and compliance management. It’s important to look at which services you may need in the future as well as your current needs.
2. Research PEOs with New York expertise
Focus your research on PEOs with a strong presence in New York and a proven track record with companies operating within the state. Case studies, testimonials, and reviews can tell you about their success rate and compatibility with your type of business. When reaching out to potential providers, you can also request social proof from the New York companies they’ve helped.
3. Evaluate the PEO’s range of services and employee benefits
Look into the full services each PEO offers to see whether they match your needs. Balance the costs against the provider’s offerings to get a clear idea of the value. It’s important to investigate benefits closely as packages like health insurance plans and retirement funds could help you attract more top candidates.
It’s also crucial to consider the provider’s customization options. The best PEO companies can tailor their administrative services to your business model and adapt as you change and grow.
4. Assess compliance and risk management capabilities
Research the PEO’s approach to compliance management with New York laws and regulations. It’s vital to understand how well they can navigate complex legal frameworks and help your organization address them. Effective compliance management allows you to mitigate risks and avoid debilitating penalties and legal cases.
An important aspect of compliance management is communication. How does the PEO notify or alert you to potential issues? For example, Deel offers many solutions to keep businesses updated including our new Compliance Hub which has all the latest federal and state updates.
5. Check customer service and support
Consider the PEO’s reputation for customer service, focusing on their response rate, availability, and contact options. Depending on the range of your business, you may want to investigate their language, location, and currency support. Quick, effective customer service is vital when you enter into a partnership with a third-party provider as you must work closely together.
6. Review and negotiate the contract
Examine the PEO contract to ensure you have a clear understanding of the terms, conditions, fees, and exit clauses. If you need to clarify any points, seek legal guidance. It’s essential to negotiate terms that align with your company’s interests and allow you to reap the full benefits of using the PEO service.
7. Plan for implementation and transition
Inform your team about the transition to the PEO, including all the benefits and expected results. Clear communication and transparency can help build trust and make employees more receptive to the initiative.
With the PEO service provider, establish a timeline for onboarding and clarify what’s expected by when. Effective collaboration can keep you on track and guarantee you have a smooth transition.
Manage your New York, US, and global workers with Deel
Deel makes payroll and human resources management a breeze, whether you’re hiring in one state, across the US, or globally.
As your PEO*, Deel provides essential payroll and HR services while ensuring state tax compliance and handling sensitive issues. We offer:
- Expert payroll administration
- Access to benefit plans from leading carriers and benefits administration
- Robust HRIS with free IT, Finance, and PTO management
- State-specific training, HR policies, and on-demand HR support
- Advanced tax and benefits compliance
- And more
Book a demo to learn more about using Deel’s PEO in New York.
*Provided by Deel PEO US, LLC, Deel Employment Services, LLC, or through Deel's partnership with licensed providers where required.
Disclaimer: This article is intended for informational purposes and should not be considered legal advice. Consult a qualified licensed attorney for help on legal issues. Content is accurate at the time of publishing.
