ESAC Standards & Procedures

Ethical Conduct Standards

  1. No PEO shall be granted new or continuing accreditation unless such PEO is determined to be qualified and operates in accordance with these standards and unless all Controlling Persons are determined to be qualified to operate as a Controlling Person pursuant to the standards prescribed herein. No ESAC-accredited PEO shall permit an individual who is not recognized as a qualified Controlling Person to perform duties associated with Controlling Persons.
  2. All Controlling Persons must be at least 18 years of age, must be honest, trustworthy, competent and ethical in managing the affairs of a PEO, and must have a history of complying with the laws of the state and nation in which they live and conduct business. Accreditation shall be denied to any PEO that has affiliated, associated or employed a Controlling Person who does not meet these requirements. Likewise, accreditation shall be denied to any PEO that is not operated and managed in a competent and ethical manner so as to benefit its clients and worksite employees. Accreditation shall also be denied to any PEO that is an Affiliate of any Entity that does not meet these requirements. For these purposes, "competent" shall mean knowledgeable and experienced in one or more of the business disciplines required to successfully operate a PEO. In the case of a PEO with less than 24 months of successful operating history, the Controlling Persons, as a group, must clearly demonstrate by documented and verifiable work history or by written certification of third-party references, substantial knowledge and experience in several of the key business disciplines required to successfully operate a PEO. For these purposes, key PEO business disciplines shall include general business management, finance and accounting, human resources management, employment law, payroll and tax administration, employee benefits, workplace safety, and employment-related risk management.
  3. In evaluating the honesty, trustworthiness, ethics, and respect for state and federal laws of an ESAC-accredited PEO, an applicant or Controlling Person, ESAC shall investigate the accuracy of representations made by the accredited PEO, applicant or Controlling Person and shall conduct a thorough background investigation initially and annually thereafter of the PEO's history of business conduct and of each Controlling Person's history of personal and business conduct. ESAC shall also enroll each ESAC-accredited PEO in a nationally recognized alert service that continuously monitors key factors of business conduct. In evaluating the resulting information, the ESAC Board of Directors shall consider the nature, frequency, timing, and relevancy of the information to the operation of the PEO and to the protection of the PEO's clients, worksite employees, insurers, and taxing authorities.
  4. An ESAC-accredited PEO shall notify ESAC within 30 business days of any change in its Controlling Persons.
  5. As a condition of accreditation, a PEO must maintain and promote to its internal staff ethical conduct guidelines in accordance with and in furtherance of these Standards of Ethical Conduct. An example form is provided as Exhibit B.