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At least 40 states have some type of registration or licensing requirement for PEOs, representing a total of over 300 compliance requirements and over 200 forms. And even where states have the same regulatory requirement, the reporting format or timing of compliance typically varies from state to state. Currently most of the application and compliance reporting forms must be completed manually.

Even PEOs that only sell their services to clients in one state often are required by their clients to do business in multiple states to serve out of state employees. And frequently clients do not give their PEO much advanced notice when they decide to expand operations into another state.

These factors combine to make a PEO’s compliance with state registration and licensing requirements relatively complicated, time consuming and expensive. There is substantial opportunity for improvement in both the efficiency and reliability of the state PEO registration and licensing process.

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