Article
9 min read
A Guide to PEO in Wisconsin
PEO
Author
Deel Team
Published
September 11, 2024
Last Update
September 11, 2024
Table of Contents
The benefits of partnering with a PEO in Wisconsin
Payroll, employment, and labor laws in Wisconsin
Choosing the right PEO for your organization
Manage your Wisconsin, US, and global workers with Deel
Key takeaways
- Partnering with a PEO in Wisconsin makes staying compliant with the state's complex labor laws and regulatory requirements simpler for organizations.
- A Wisconsin PEO gives businesses access to affordable and comprehensive employee benefits packages, helping them attract and retain top talent in a competitive job market.
- A PEO offers small businesses and startups in Wisconsin access to expert HR and payroll management support.
As an employer in Wisconsin, you may be looking for efficient ways to navigate the state's detailed and changing labor and employment laws. A professional employment organization (PEO) can help.
Read on to learn more about the process and benefits of using a PEO in Wisconsin.
The benefits of partnering with a PEO in Wisconsin
With a PEO, your organization can outsource a wide range of employee management tasks, reducing your workload while increasing compliance, employee satisfaction, and more.
Deel PEO
Cost-savings and efficiency gains in HR
Outsourcing tasks to a PEO can streamline your organization’s HR operations by enhancing efficiency and cost-effectiveness. For example, PEOs often cut down your costly labor hours with tech-driven process automation which simplifies payroll processing, tracks payroll spending, and provides real-time analytics. This also allows your team to focus on strategic planning and analysis rather than repetitive and time-consuming administration.
Using a PEO is often more cost-effective than hiring a team of full-time HR staff, and offers a pricing model that is predictable month-over-month, which can help limit unforeseen costs.
Access localized expertise
A PEO gives organizations access to extensive local knowledge and resources. This includes small businesses and startups, which are often unable to fund in-house payroll and HR expertise that covers every state. A PEO can streamline the following tasks:
- Compliance with state and federal laws and regulations
- Payroll and tax withholding and filing
- Benefits administration
- Reporting
- Recruitment and hiring
- Onboarding employees
- Worker classification
- Unemployment and workers’ compensation claims
- Workplace policies
- Data privacy
Collaboration with a PEO empowers HR teams, CFOs, and Finance departments to make compliant and strategic decisions based on localized expert insights.
Affordable employee benefits plans
PEOs help Wisconsin companies of all sizes compete with the comprehensive employee benefits packages and perks that larger corporations offer, to support your acquisition and retention of top talent.
Because PEOs co-employ a large number of employees, they're able to offer client companies competitive rates on benefits, such as health insurance, life and disability insurance, and retirement plans. PEO services also allow you to continue working with your existing benefit providers while offloading many of the compliance and administrative tasks.
Stronger compliance and protection from legal liabilities
When you partner with a PEO, you enter into a co-employment relationship. They take on the legal liabilities and compliance risks when it comes to payroll, employment tax, labor laws, and more, while you remain responsible for the day-to-day management of your workforce.
A PEO assumes responsibility for ensuring compliance with federal requirements and state-specific legislation. This protects your organization from the potential financial, reputational, and legal repercussions of non-compliance with payroll, employment, and labor laws in Wisconsin.
Payroll, employment, and labor laws in Wisconsin
Employers in Wisconsin must comply with the federal employment regulations and contributions stipulated in the Fair Labor Standards Act (FLSA), such as federal unemployment tax, unemployment insurance, social security taxes, and Medicare taxes. Additionally, Wisconsin employers must abide by state-specific regulations,
A PEO can streamline your organization’s compliance with the following legislation, and more:
Payroll and benefits laws
Minimum wage
In Wisconsin, there have been discussions about raising the minimum wage to reflect the cost of living, but no changes have been implemented so far. Currently, employers must pay at least the basic federal minimum hourly wage of $7.25 USD.
However, an exception for tipped employees means that employers are allowed to pay tipped employees a lower cash wage of at least $2.33 per hour. If the cash wage and tips equate to less than $7.25 per hour, the employer should apply a supplementary tip credit of up to $4.92 per hour.
Employers are allowed to pay ‘opportunity employees’—workers under the age of 20 who have been employed by the same employer for 90 or fewer consecutive days since their initial hiring—a wage of $5.90 per hour. If opportunity employees earn tips, they can be paid a cash wage of $2.13 per hour.
Income tax
Wisconsin’s state income tax is progressive, with rates that vary based on income levels. Employers must withhold both federal and state income taxes from employee wages, ensuring compliance with IRS and Wisconsin Department of Revenue guidelines.
Overtime
Overtime compensation for non-exempt employees is mandatory in Wisconsin after 40 hours of work per week. The applicable overtime premium rate is 1.5 times the employee's regular rate. Certain workers are exempt from this rule, such as agricultural workers and specific employees covered by collective bargaining agreements.
Vacation
The Wisconsin Department of Workforce Development states that Wisconsin employers aren't legally required to offer paid or unpaid vacation for their workers. Employers are free to set their own PTO policies, but they must follow these and ensure they're clearly communicated to employees.
Sick leave
Workers aren't entitled to paid or unpaid sick leave in Wisconsin, although exceptions apply under the Family and Medical Leave Act (FMLA). Employers may offer paid sick leave as part of their benefits package, and some local municipalities may have specific sick leave regulations.
Severance pay
Severance pay isn't a requirement in Wisconsin. However, if you choose to offer severance benefits to employees, they must follow the terms outlined in any prior agreement in order to be compliant.
Paydays and pay periods
Most employers in Wisconsin must pay workers at least monthly, with no more than 31 days between pay periods. Specific exemptions apply to certain employees, such as those in logging or farm labor, and workers under collective bargaining agreements.
Final paychecks
In Wisconsin, when an employee leaves their job, the final paycheck must be provided by the next regular payday. If the termination is due to layoffs or other involuntary reasons, employers must pay the final wages immediately.
Pay transparency laws
Wisconsin doesn't have specific laws regarding pay transparency, but employers are encouraged to foster an environment of openness by allowing employees to discuss wages freely.
Labor laws
Worker safety regulations
Wisconsin follows federal OSHA standards along with state regulations overseen by the Wisconsin Department of Safety and Professional Services (DSPS), ensuring workplace safety and compliance.
Right to work
Wisconsin is a "right-to-work" state, meaning employees aren’t required to join a union or pay dues as a condition of employment, although they retain the right to organize.
Workers’ compensation insurance
Wisconsin employers must provide workers' compensation insurance for almost every employee (exemptions apply). This is managed through the Wisconsin Department of Workforce Development (DWD).
Workers’ compensation insurance financially supports eligible employees in the event of work-related injuries or occupational diseases and protects employers’ liability. A PEO ensures your organization meets Wisconsin’s specific requirements and avoids any penalties for non-compliance.
If your business falls into any of the following categories, you're required to have workers’ compensation insurance:
- If your business employs three or more employees, either full-time or part-time, you need to secure insurance on the day the third employee is hired
- If your business employs one or more employees, either full-time or part-time, and you have paid them a total of $500 or more in gross wages in any calendar quarter for work performed at one or more locations in Wisconsin, you must obtain insurance by the 10th day of the first month following that quarter
- If you are a farmer and employ six or more workers simultaneously on any 20 days during a calendar year, which runs from January to December, you must obtain insurance by the 10th day after the 20th day of employment
Additionally, employers based outside of Wisconsin must have worker's compensation insurance if they have employees working within the state. The insurance policy must be issued by a company licensed to operate in Wisconsin and must specifically include Wisconsin as a covered state in Section 3a of the policy.
If you fail to carry worker's compensation insurance when required, you may face significant penalties, such as:
- A fine of either double the amount of the premiums you should have paid during the period you were uninsured or $750, whichever is higher
- An additional $100 per day fine for up to seven days
- Your business operations could also be ordered to shut down
- If an employee is injured while your business is uninsured, you, as the business owner, could also be held personally responsible for any claim benefits that the injured employee receives
Meal breaks and rest periods
In Wisconsin, employees in factories, mechanical and mercantile establishments, as well as certain service industries and migrant workers are entitled to a 30-minute break after working 6 consecutive hours. This break should ideally be scheduled close to the usual mealtime or around the middle of the shift.
Employers aren’t required to provide rest periods for adult employees, but Wisconsin law requires that minors under 18 receive a 30-minute break for every 6 hours worked.
Employment laws
At-will employment
Wisconsin is an ‘at-will’ state, meaning employers or employees can terminate the employment relationship at any time without cause, provided no laws are violated (e.g., anti-discrimination laws).
Worker classification
Wisconsin has clear guidelines for distinguishing between employees and independent contractors. Misclassification can lead to penalties, so employers must ensure proper classification to comply with tax and labor regulations.
Discrimination
The Wisconsin Fair Employment Law prohibits discrimination in hiring, firing, compensation, and other employment conditions based on race, gender, age, disability, and other protected characteristics.
Non-compete agreements
Non-compete agreements in Wisconsin are enforceable but must be reasonable in scope regarding time, geography, and the type of activity restricted.
Equal pay
Wisconsin enforces equal pay protections, requiring that men and women receive equal pay for equal work. Discrepancies in pay must be based on factors like experience, education, or job performance, not gender or other protected characteristics.
A PEO can compliantly navigate complex Wisconsin regulations on behalf of your organization to manage your workers’ compensation insurance, wages, overtime payments, and more.
Choosing the right PEO for your organization
The following steps will help you select the PEO which best aligns with your business needs and goals.
1. Outline your business needs
Start by evaluating your current and anticipated HR costs, identifying areas where a PEO can deliver cost savings or operational efficiencies. Consider needs like payroll management, benefits administration, HR compliance, workers' compensation, and risk management, and how these services can scale with your business growth.
2. Identify PEOs with Wisconsin expertise
Look for PEOs with a solid track record in Wisconsin. Seek out case studies, client feedback, and examples of success in managing the state's specific labor laws and business environment.
3. Review the range of services and quality of benefits
Review the PEO's service offerings to ensure they align with your business needs. Evaluate the quality, flexibility, and affordability of their benefits packages, ensuring they can be tailored to your company's evolving needs.
4. Determine the compliance and risk management capabilities
Examine how the PEO handles ongoing compliance with Wisconsin labor laws and its ability to manage risks related to employment practices and workplace safety. This step is critical to reducing liability and maintaining legal compliance.
5. Check customer service and support
Look into the PEO’s reputation for customer service. Consider their responsiveness, the availability of dedicated support teams, and the effectiveness of the HR technology they offer to manage employee services.
6. Review and negotiate the contract
Thoroughly go over the PEO contract to understand all terms, fees, and exit options, potentially with legal assistance. Compare pricing models, whether it's a flat fee per employee or a percentage of payroll, and negotiate terms that provide transparency and flexibility.
7. Plan for a smooth transition
Ensure a seamless transition to the PEO by communicating changes to employees, aligning systems, and setting up processes for collaboration. Effective communication and preparation will minimize disruption and promote a successful partnership.
Manage your Wisconsin, US, and global workers with Deel
Deel makes payroll and HR management easy, whether you’re hiring in one state, across the country, or around the world.
As your PEO*, Deel takes care of payroll, HR, and benefits administration while ensuring state tax compliance and handling sensitive issues. We provide:
- Expert payroll administration
- Access to benefit plans from leading carriers and benefits administration
- Robust HRIS with free IT, Finance, and PTO management
- State-specific trainings, 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 Wisconsin.
*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 shouldn't be considered legal advice. Consult a qualified licensed attorney for help on legal issues. Content is accurate at the time of publishing.