Connecticut PEO Laws: Registration, Bonding and Payroll Requirements
Connecticut requires PEOs to register with the CT Department of Labor under CGS 31-221c before providing services, with $150,000 working capital or an equivalent bond, and annual renewal within 180 days of fiscal year end. The 2026 SUI base is $27,000 at 1.9% for new employers, the minimum wage is $16.94, and paid leave runs at 0.5% employee-paid.
| PEO registration or licensing required | Yes source (opens in new window) |
|---|---|
| Regulating agency | Connecticut Department of Labor (CTDOL), Division of Wage and Workplace Standards source (opens in new window) |
| Bond or security requirement | $150,000 working capital per GAAP, or rather surety bond / irrevocable letter of credit / marketable securities of $150,000 minimum (CGS 31-221d; limited registration available for out-of-state PEOs) source (opens in new window) |
| Registration renewal cycle | Annual — renewal filed within 180 days of the PEO's fiscal year end (limited registration: annually at fiscal year end) source (opens in new window) |
| SUI taxable wage base | $27,000 (2026, up from $26,100) source (opens in new window) |
| New-employer SUI rate | 1.9% (2026, down from 2.2%); charged rates 0.1% minimum to 10.0% maximum, reduced by a 1.125 divisor for 2026, plus a 1.0% fund solvency tax making 1.1%-9.9% contribution rates source (opens in new window) |
| State workers' comp fund | No — competitive private market |
| State paid leave mandate | Yes — Connecticut Paid Leave: 2026 employee contribution 0.5% of wages up to the Social Security wage cap; up to 12 weeks at 95% of typical weekly pay for family and medical reasons source (opens in new window) |
| State minimum wage | $16.94/hour effective January 1, 2026 (indexed to the federal employment cost index) source (opens in new window) |
| PEO SUI reporting basis | Client-level — Connecticut is a client reporting state; PEOs report wages and pay UI under the worksite employer accounts |
Sources
- CTDOL — Professional Employer Organizations (PEO) registration page, CGS 31-221a-h — verified 2026-08-10
- CTDOL Division of Wage and Workplace Standards — PEO program — verified 2026-08-10
- CGS 31-221c — Registration requirements; 31-221d working capital or $150K bond/letter of credit/securities — verified 2026-08-10
- CGS 31-221c(c) — annual renewal within 180 days of fiscal year end; limited registration renewed annually — verified 2026-08-10
- CTDOL 2026 UI rate notice — taxable wage base rises to $27,000 — verified 2026-08-10
- CTDOL 2026 UI rate notice — new employer rate 1.9%, charged range 0.1%-10.0%, 1.0% solvency tax — verified 2026-08-10
- CT Paid Leave 0.5% employee-funded line on the same quarterly wage report (CTDOL rate notice) — verified 2026-08-10
- Governor Lamont announcement — minimum wage $16.94 effective January 1, 2026 — verified 2026-08-10
What we know about Connecticut
Connecticut's PEO law sits in Chapter 566a of the General Statutes and is enforced by the Department of Labor's Division of Wage and Workplace Standards. Under CGS 31-221c, no person may provide, advertise or hold themselves out as providing professional employer services in the state without being registered as a professional employer organization. The registration application requires the PEO to identify ownership interests of 25 percent or more, list every client company with its Connecticut UI account number, disclose all names used in the prior five years, and submit a recent audit. Registration is available in full form for in-state PEOs and as a limited registration for PEOs domiciled outside Connecticut, with no office or direct solicitation in the state and no more than 50 covered employees in Connecticut.
Financial conditioning is set by CGS 31-221d: a PEO must maintain $150,000 in working capital under generally accepted accounting principles or post a surety bond, irrevocable letter of credit or securities with a minimum market value of $150,000. The initial registration fee is $1,500 and renewals run $1,000, filed within 180 days after the end of the registrant's fiscal year. Connecticut is a client reporting state for unemployment insurance: PEO accounts report wages under the worksite employers' UI accounts and rates, so each client keeps its own experience rating — a material fact for pricing PEO services in the state.
UI rates for 2026 were announced by the CTDOL: the taxable wage base rises to $27,000 from $26,100; the new employer rate is reduced to 1.9 percent from 2.2 percent; charged rates are drawn from a 0.1 percent minimum to a 10.0 percent maximum, reduced by a 1.125 divisor in 2026 to soften the impact of the wage base increase; and a 1.0 percent fund solvency tax applies, producing contribution rates from 1.1 percent to 9.9 percent. The minimum wage is $16.94 effective January 1, 2026, adjusted annually by the employment cost index under Public Act 19-4. Connecticut Paid Leave is funded by a 0.5 percent employee payroll contribution with no employer share, paid up to the Social Security wage cap, providing up to 12 weeks of family and medical benefits at 95 percent of typical pay. Workers' compensation is a competitive private market with no state fund. For a PEO, Connecticut's profile is a mandatory registration regime with a real financial-fitness test, client-level UI rating, and an employee-funded paid-leave levy.
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