Bill Affecting Professional Employer Organizations in Congress
By: Matt, April 5th, 2006
Representative Kevin Brady (R-TX) has sponsored and recently introduced H.R. 4985, which would amend the tax code to certify professional employer organizations (PEOs). The bill would clarify which party would pay employee taxes in the event that a business hires a PEO. According to Sara Stephens, a spokesperson for Congressman Brady, “It would establish a certification process by which PEOs are treated as the employer for purposes of federal employment taxes”.
Under the bill, a PEO would be required to meet various standards to become certified, including financial standards, having no criminal record, having no unpaid taxes and posting a bond for up to $1 million for the express purpose of paying employment taxes.
The National Association of Professional Employer Organizations (NAPEO) supports the bill and a very similar bill is expected to be introduced in the U.S. Senate. NAPEO chief executive Milan Yager has noted that the Brady bill “is more streamlined in its approach” than past bills.
Entries