PEO in Iowa [2024]

As a small business in Iowa—whether in Des Moines or Cedar Rapids—you may struggle to balance running your business day-to-day and managing all its HR demands. Luckily, a professional employer organization (PEO) can help lighten the load. 

A PEO can help streamline and automate various HR tasks such as payroll, benefits administration, compliance management, and workers' compensation insurance. And by leveraging the services of a PEO, businesses can provide their employees with access to better, more affordable benefits.

As an Iowa-based business, you have to stay up-to-date with local employment and labor laws to ensure compliance with benefits requirements, payroll taxes, and minimum wage laws—and a PEO can provide expert assistance.

Take the time to evaluate your options and learn about your compliance needs before selecting a PEO. From automatic state tax registration to remote laptop management, Rippling PEO simplifies hiring in Iowa and across the US.

Benefits of using a PEO in Iowa

By partnering with an Iowa PEO, small businesses and startups can streamline HR tasks, access affordable benefits, and get expert support as they scale.

Offload administrative HR work

When you partner with a PEO, you and the PEO co-employ your workforce, which means you'll receive HR support while maintaining control over your business operations and overall strategy. As the worksite employer, you'll have the final say on hiring and firing decisions, salaries, and day-to-day employee tasks. 

The PEO becomes the administrative employer. That means they oversee employment-related human resources work, including payroll, benefits management, and HR compliance. They do this by hiring your employees for tax purposes under their federal employer identification number (EIN). 

PEOs leverage technology, HR experience, and time-tested processes to simplify and streamline HR task management. And by outsourcing manual administrative functions to the PEO, your HR team gets back time and resources to focus on valuable strategic work that contributes to your company's business objectives.

Better employee benefits, at a lower price

Many PEOs provide access to many different types of benefits, such as health insurance, life and disability insurance, mental health support, retirement plans, commuter benefits, dependent care, and more. While comprehensive benefits help companies maintain a competitive hiring edge, it can be challenging for smaller businesses to offer them on their own.

So, how do PEOs do it? Because each PEO co-employs people from a variety of companies, they’re able to leverage the size of their workforce to negotiate more affordable, higher-quality benefits with third-party providers. According to the National Association of Professional Employer Organizations (NAPEO), the nearly 500 PEOs in the United States co-employ 4.5 million people spanning 200,000 businesses. 

No Iowa laws mandate employers to offer sick leave (paid or unpaid) and vacation time beyond what’s written in the federal guidelines. However, businesses with 50 or more full-time employees must comply with the Affordable Care Act (ACA) and provide health insurance benefits—and a PEO can assist Iowa businesses in providing access to healthcare plans that meet the federal ACA mandate.

Worry-free compliance with Iowa laws

A PEO can help you comply with not just federal labor and employment laws, but also state-level and local Iowa laws. For example, most businesses in Iowa are required to provide their employees with workers’ compensation coverage (with limited exceptions, like for agricultural businesses). But workers’ compensation insurance requirements vary from state to state, so it can be hard to stay on top of the laws, especially if you employ remote workers who live in different places. A PEO like Rippling automatically supplies pay-as-you-go workers’ compensation plans that comply with the laws based on where your employees live—plus, it flags violations so you can be sure you always comply with local laws.

PEOs can help businesses stay compliant with more than just workers’ comp, offering legal and compliance support for:

• Payroll regulations, including correctly classifying employees and contractors, issuing and filing tax forms, reporting and depositing payroll taxes on time, and adhering to overtime requirements, minimum wage rules, and other wage laws
• Benefits laws, including federal regulations such as the Affordable Care Act (ACA), COBRA, FSA, HSA, and other benefits-related requirements
• Labor laws, including helping you comply with Equal Employment Opportunity laws and displaying state-required labor posters for employees

The IRS estimates that 40% of small businesses pay payroll penalties yearly. Using a PEO service with compliance support can help you avoid costly fines and penalties, ensuring you don’t violate any local laws.

Dedicated support team

By leveraging the expertise of PEOs, you can reduce HR costs and save valuable time. PEOs can guide you through streamlining benefits administration, creating an employee handbook, training managers, reviewing safety practices, and addressing HR-related challenges.

What to consider when evaluating a PEO service in Iowa

When choosing a PEO service in Iowa, consider these factors to find the right one for your business.

• Your business needs. What do you need from your PEO? Some typical PEO offerings include:
• Payroll processing
• Tax filing and compliance risk management
• Benefits administration
• Onboarding and offboarding
• Safety compliance and mandatory training
• Time and attendance tracking
• Regulatory compliance
• HR outsourcing

• Your budget. PEOs have different pricing structures—typically per-employee per-month fees or a percentage of each payroll run. Consider both your current and future needs, especially if you plan to grow or scale your business. Can you afford the cost of the PEO services as you scale from your current company size?
• Experience and reputation. When looking for a PEO, ask for referrals from fellow Iowa entrepreneurs to gather feedback and check their credibility. Also, reference review sites like G2 and Capterra to see what past and current clients say about their experience with the PEO.
• Benefits. Evaluate the benefits plans the PEO can help you access. Assess their quality, range, and cost and confirm they meet your employees' needs.
• Benefits renewal rates. Choose a PEO that’s transparent about cost increases after the first year. Research PEOs that publicize how their rates change, so you can predict potential increases in renewal rates. 
• Integrations. Can the PEO integrate with your existing processes, tools, and technology?
• Does the PEO specialize in certain industries? If your business is in a niche industry, it can be helpful to find a PEO with experience in that field.
• Does the PEO specialize in certain legal or compliance issues? If your business must comply with federal or state regulations or address compliance issues, you may want to seek out a PEO with specialized experience.
• Your exit strategy. If you're working with a PEO, you may consider ending your partnership with them down the line. This could happen because you prefer to handle HR processes on your own or because you've found a better solution. However, leaving some PEOs can be difficult and time-consuming, as you might have to replace all their current systems. Be sure to ask about their offboarding process before signing the dotted line.

Why Rippling PEO is the right choice for your Iowa business

Rippling PEO is the first PEO that runs on modern software and syncs HR, IT, and Finance all in one platform—streamlining all your busy work, from 90-second onboarding to remote IT management. Rippling also helps you manage critical compliance tasks, like setting up tax accounts and workers' comp and automatically flagging minimum wage and overtime violations—all while helping you access comprehensive, low-cost benefits.

With Rippling, you get:

• An all-in-one platform for HR, IT, and Finance
• Remote team management tools, including state and local tax registration, online onboarding, and app and device management
• Access to elite benefits plans, plus below-average, predictable renewal rates
• Customizable reports for any employee data
• Automatic identification of federal, state, and local compliance issues, along with plans of action for each
• Automated risk management processes, including ACA and COBRA administration, anti-harassment training, and sending digital labor law posters to your employees
• Unlimited access to in-depth HR guides, resources, and templates

If you ever want to manage your HR in-house, you can easily switch off Rippling PEO. Unlike other PEO services, we make transitioning to our all-in-one workforce management platform seamless. Your HR, payroll, and employee data stays stored in your account, while your integrations with other systems remain the same. Your employees can keep using Rippling as they always have.

FAQs about PEOs in Iowa

What is a PEO, and how does it work?

A professional employer organization (PEO) provides comprehensive support for your HR needs, such as payroll, benefits, compliance management, and other administrative tasks. They usually offer a co-employment arrangement, where they become the legal employer of your company's workforce for tax purposes.

How does a PEO arrangement affect control over my employees?

The PEO handles employment-related HR work, benefits administration, and payroll, while the business retains control over day-to-day operations and employee management, including hiring and strategic planning.

What is a Certified PEO?

A Certified PEO (CPEO) is a PEO that has met certain background, financial, and reporting requirements set by the Internal Revenue Service (IRS) and completed a series of assessments. This certification is optional and doesn't imply endorsement by the IRS. In years past, CPEO status could provide certain tax advantages, but nowadays, the benefits of PEO certification are mainly outdated. 

What size company can benefit from a PEO?

Companies of all sizes can benefit from PEOs, but small and mid-sized businesses usually see the most benefits. PEOs offer comprehensive services that can help these businesses streamline human resources operations, reduce costs, and increase competitiveness.

How does a PEO charge for its services?

The most common pricing models for PEOs are a flat fee per employee or a percentage of the total payroll.

What is the implementation process, and how long does it take to go live?

When setting up their systems to manage your HR, payroll, and benefits administration, the PEO will integrate their technology with your existing systems if needed. They’ll likely conduct onboarding sessions for your employees to explain the new processes and benefits and train your team to use their systems. 

The timeline for completion can vary from a few weeks to several months, depending on the size of your business and the complexity of the required services.

Are PEOs regulated?

Yes, PEOs must comply with federal and state regulations and may seek additional accreditation from industry organizations for added credibility, but it's not required.

Are PEOs in Iowa required to have special certifications or licenses?

PEOs in Iowa aren’t required to obtain a specific license or certification, but they must still comply with state regulations governing employer-employee relationships.

What happens if I want to terminate my relationship with a PEO?

If you’re considering a PEO service, knowing what happens if you end the relationship is important. Unfortunately, offboarding with most PEOs can be a hassle and disrupt your business. You'll need to find new systems to handle the data and HR processes your previous PEO handled for you.

Rippling PEO makes switching on and off our PEO seamless. Just move to our all-in-one workforce management platform, where all your data, systems, and integrations remain intact—with no interruptions to your team's workflow.

In what states is Rippling PEO available?

Rippling PEO is available in all US states.

Disclaimer: Rippling and its affiliates do not provide tax, accounting, or legal advice. This material has been prepared for informational purposes only, and is not intended to provide or be relied on for tax, accounting, or legal advice. You should consult your own tax, accounting, and legal advisors before engaging in any related activities or transactions.