New York PEO Laws: Registration, Bonding and Payroll Requirements
New York requires PEOs to register annually with the Department of Labor under Labor Law Article 31, backed by audited financials showing $75,000 net worth or a $75,000 bond. PEOs pay unemployment insurance under their own account: 2026 wage base $17,600, new employer rate 4.1%, minimum wage $17.00 downstate and $16.00 upstate.
| PEO registration or licensing required | Yes - Labor Law Article 31 (Professional Employer Act), Section 919: a PEO 'shall not engage in business from offices in this state' or provide professional employer services to persons in this state unless registered with the Department of Labor; the PEO title is reserved to registered entities; exemptions are available. source (opens in new window) |
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| Regulating agency | NYS Department of Labor - PEO registration and ongoing oversight under Article 31; unemployment insurance administered by NYS DOL under Article 18 (quarterly NYS-45); workers' compensation, disability and Paid Family Leave insurance governed by the Workers' Compensation Law. source (opens in new window) |
| Bond or security requirement | No fixed bond: Labor Law Section 921 requires audited GAAP financial statements showing a minimum net worth of $75,000, with a $75,000 bond permitted in lieu of the audited statement; quarterly filings carry an independent-CPA certification that federal and state payroll taxes were timely paid (Section 921(3)). source (opens in new window) |
| Registration renewal cycle | Annual - registration and exemption status renew each year with the NYS Department of Labor (Labor Law Article 31, Section 919). source (opens in new window) |
| SUI taxable wage base | $17,600 (2026, up from $12,800 in 2025). From January 1, 2026 the base permanently adjusts each year to 18% of the state average annual wage (four most recent quarters of QCEW data), rounded up to the nearest $100, with no year-over-year decrease. source (opens in new window) |
| New-employer SUI rate | 4.1% total for 2026 - a 4.025% UI contribution (3.4% normal plus 0.625% subsidiary) plus the 0.075% Re-employment Service Fund; 2026 experience-rated range 1.7%-9.5% total. source (opens in new window) |
| State workers' comp fund | Competitive market with a state carrier - the New York State Insurance Fund (NYSIF), a state non-profit agency that must write any employer, competes with hundreds of licensed private carriers; approved self-insurance also available. source (opens in new window) |
| State paid leave mandate | Yes - New York Paid Family Leave: 2026 contribution rate 0.432% of wages, maximum weekly benefit $1,228.53, maximum annual contribution $411.91, with benefits up to 12 weeks for qualifying events (bonding, family care, military exigencies). source (opens in new window) |
| State minimum wage | $17.00 per hour in New York City and Long Island/Westchester and $16.00 in the remainder of New York State, effective January 1, 2026; tipped cash-wage schedules $14.15/$13.30 (service) and $11.35/$10.70 (food service); inflation indexing begins 2027. source (opens in new window) |
| PEO SUI reporting basis | PEO-level - Labor Law Section 923: the PEO is liable for contributions, penalties and interest on wages paid to worksite employees under Article 18 and must 'report and pay all required contributions to the unemployment compensation fund using the state employer account number and the contribution rate of the professional employer organization'; quarterly NYS-45 filings are due even in quarters with no payroll, and underpayment interest runs at 12% per year. source (opens in new window) |
Sources
- NYS Labor Law Article 31 (Professional Employer Act), Section 919 - registration required before engaging in business or providing services in the state; PEO titles reserved to registered entities — verified 2026-08-12
- NYSDOL - Professional Employer Organizations page: registration/exemption under Article 31 administered by the Department of Labor — verified 2026-08-12
- CPA Journal (Mar 30, 2021) summarizing Labor Law Sections 919(1) and 921(1)-(3) - $75,000 minimum net worth in audited GAAP financials or $75,000 bond; quarterly independent-CPA certification — verified 2026-08-12
- NYSDOL PEO page - 'Each year they must renew their registration or exemption status' — verified 2026-08-12
- NYS-45-I instructions (rev. 1/26) - wage base history through 2025 ($12,800); from 2026 the base permanently adjusts to 18% of the state average annual wage, rounded up to $100, no decreases; 'The wage base for 2026 is $17,600' — verified 2026-08-12
- NYSDOL Unemployment Insurance Rate Information - 2026: lowest 1.625% + 0.075% RSF = 1.7%; new employer 4.025% + 0.075% RSF = 4.1%; highest 9.425% + 0.075% = 9.5% — verified 2026-08-12
- NYS Workers' Compensation Board - 'The Players in the System': insurers are private carriers, NYSIF (state non-profit carrier that must write any employer), and self-insured employers; BusinessOwners.pdf cites hundreds of authorized private carriers — verified 2026-08-12
- New York State Paid Family Leave program page - 2026 contribution rate 0.432%, maximum weekly benefit $1,228.53, maximum annual contribution $411.91 (confirmed in prior research session) — verified 2026-08-12
- NYSDOL Minimum Wage page - location table, rates as of 01/01/2026 ($17.00 NYC and Long Island/Westchester; $16.00 rest of state; tipped schedules; 2027 indexing) — verified 2026-08-12
- Labor Law Article 31, Section 923 - PEO liable under Article 18 and must report/pay UI 'using the state employer account number and the contribution rate of the professional employer organization'; NYS-45 quarterly filing duty per dol.ny.gov/nys-45-quarterly-reporting — verified 2026-08-12
What we know about New York
New York regulates professional employer organizations through the Professional Employer Act, Labor Law Article 31, and it is a registration state rather than a licensing state. Section 919 provides that a PEO 'shall not engage in business from offices in this state' or enter into an arrangement to provide professional employer services to persons in this state unless registered, and it reserves the titles 'professional employer organization,' 'PEO,' 'staff leasing company,' and related names to registered entities (forms.labor.ny.gov/WP/Article31.pdf). Registration runs through the State Department of Labor and renews annually; the DOL also requires proof of workers' compensation and disability coverage, certification of tax payment, contract content, and the identity of clients with each registration or renewal (dol.ny.gov/professional-employer-organizations-peo).
The financial solvency requirement is written as a net-worth floor rather than a bond. Under Section 921, an applicant files audited financial statements prepared under GAAP showing a minimum net worth of $75,000 - with a $75,000 bond permitted in lieu of the audited statement - and every quarter the PEO files a statement signed by an independent CPA certifying reasonable assurance that federal and state payroll taxes for all New York employees were timely paid (CPA Journal, March 30, 2021, summarizing Sections 919 and 921). Once registered, the act's teeth are Sections 917 and 922-923. Section 917 makes the PEO's obligations continuing: while the professional employer agreement is in force, the PEO must pay wages and collect, report, and remit employment taxes of its worksite employees from its own accounts, pay unemployment insurance as the unemployment insurance law requires, and secure workers' compensation coverage in its own name or the client's name. Section 922 allocates direction and control - the PEO reserves a right of direction and control over worksite employees while the client retains what is necessary to conduct its business - and treats the PEO as an employer for state income tax withholding. Section 923 fixes unemployment insurance liability on the PEO 'in accordance with the provisions of article eighteen,' the Unemployment Insurance Law, and requires it to report and pay 'using the state employer account number and the contribution rate of the professional employer organization' (forms.labor.ny.gov/WP/Article31.pdf).
PEO-level reporting under one's own account is consequential in a year when New York's UI numbers moved sharply. The taxable wage base was $12,800 in 2025 and jumps to $17,600 in 2026 under a formula that became permanent: from January 1, 2026 the base is 18 percent of the state average annual wage, rounded up to the next $100, and it cannot decline year over year (NYS-45-I instructions, rev. 1/26, tax.ny.gov/pdf/current_forms/wt/nys45i.pdf). The announced 2026 new employer total rate is 4.1 percent - a 4.025 percent UI rate (3.4 percent normal plus 0.625 percent subsidiary) plus the 0.075 percent Re-employment Service Fund - with an experience-rated range of 1.7 to 9.5 percent (dol.ny.gov/unemployment-insurance-rate-information). The quarterly filing duty does not pause: liable employers file the NYS-45 every quarter, even with no payroll, and underpayment interest runs at 12 percent per year (NYS-45-I instructions).
Workers' compensation, disability benefits, and Paid Family Leave are sold through private carriers, NYSIF - a state non-profit competitive carrier that must write any employer - or approved self-insurance, with the Workers' Compensation Board policing coverage (wcb.ny.gov/content/main/Employers/players-system.jsp). The 2026 minimum wage is $17.00 in New York City and Long Island/Westchester and $16.00 in the remainder of the state from January 1, 2026, with statutory tipped cash-wage schedules and inflation indexing beginning in 2027 (dol.ny.gov/minimum-wage). New York Paid Family Leave runs at a 0.432 percent 2026 employee contribution, with a $1,228.53 maximum weekly benefit and a $411.91 maximum annual contribution (ny.gov/programs/new-york-state-paid-family-leave).
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