Selecting a PEO (Professional Employer Organization) is a significant choice. You’re leaving payroll, employee information, tax returns, and compliance in the hands of an outside firm — all the places where errors will make your business lose time, money, and reputation. With that much riding on it, you want something to distinguish safe providers from risky ones.
That’s where ESAC accreditation comes in. Among the thousands of PEOs working throughout the United States in 2025, only a small handful have this designation. ESAC is an independent monitor that ensures a PEO meets stringent financial, ethical, and operational criteria. In other words, it’s one of the most obvious indicators of trust you can get when considering a partner.
Here, in this blog, we’ll dissect what ESAC accreditation actually is, why it’s important to consider when selecting a PEO, how it compares to other certifications, and the questions you need to ask before you sign on the dotted line. The objective: to provide you with a clear-cut guide you can follow to make a safer, wiser decision for your company.
ESAC is the Employer Services Assurance Corporation. It’s a self-sustaining, nonprofit corporation established to give financial assurance and accreditation to the PEO industry. Imagine ESAC as a trusted referee: it checks whether a PEO is remitting taxes, insurance premiums, retirement contributions, and other obligations it incurs on behalf of client workers, and it tracks those obligations continuously.
Two practical takeaways:
You are deciding whether to delegate sensitive operations to a third party. ESAC accreditation alleviates four major concerns that business owners face.
One large concern with any PEO is that they’ll mess up payroll or neglect to pay taxes or premiums. ESAC-accredited PEOs are held to an independent financial audit and review. That’s less likely to happen, therefore, for the provider to squander funds or leave customers vulnerable.
ESAC keeps assurance resources that cover past payments for taxes, wages, retirement plan contributions, and benefits premiums in certain circumstances. That provides peace of mind for both your staff and you.
To earn and maintain accreditation, a PEO must adhere to dozens of reporting, licensing, and internal control regulations. This sets a greater standard for transparency than many non-accredited suppliers.
If you’re a broker or HR leader comparing PEOs, seeing the ESAC logo rapidly narrows your options. Accreditation is not a substitute for due diligence, but it is a reputable way to identify providers who have passed independent financial and operational inspections.
When a PEO becomes ESAC accredited, it’s been checked on items that directly affect your exposure:
In short, ESAC is concerned with the money and controls that surround it. If that matters to you (and it should), ESAC accreditation is a significant indication.
There are a number of typical credentials you’ll encounter when PEO shopping. Here’s how ESAC accreditation compares to the others you might be familiar with:
No single accreditation covers everything. ESAC is the standard for financial guarantee and payment stability. A premier PEO should ideally possess several of these credentials in conjunction.
Not necessarily. Many solid PEOs succeed quite nicely without ESAC accreditation. But ESAC accreditation becomes increasingly crucial when:
If those conditions apply, prioritize ESAC accreditation during your selection process.
ESAC accreditation is also one of the best indicators that a PEO is fiscally solid, operationally transparent, and able to manage payroll, taxes, and benefits without putting your business at undue risk.
If you’re looking at multiple providers, place ESAC-accredited PEOs at the top of your priority list. The slight added premium you may spend is dwarfed by the expense of payroll mistakes, compliance infractions, or broken partnerships. Your workers’ financial security and business stability are worth a partner with documented reliability.
At OEM America, a proud NAPEO Member and BBB-accredited company, we assist businesses to save money, minimize risk, and maximize productivity. Schedule a session with an expert today—we’ll offer up to 4 hours of complimentary support, a tailored study to reveal $1,000 per employee in savings, and a guide to reclaim your time. Contact us today at 860.528.5555 or complete our contact form to begin.
Q: What does ESAC stand for, and what do they do?
A: ESAC is an acronym for Employer Services Assurance Corporation. It is a self-governing, not-for-profit corporation formed in 1995 that offers accreditation and financial assurance to the PEO industry. ESAC ensures that PEOs comply with high standards of financial soundness, ethical behavior, and reliability of operation.
Q: What does ESAC accreditation verify?
A: It ensures a PEO’s financial and operational procedures, such as remittance of payroll taxes, benefit premiums, retirement contributions, and compliance with industry best practices supported by independent CPA audits.
Q: Is ESAC accreditation the same as IRS CPEO?
A: No. ESAC addresses financial guarantee and industry standards. CPEO is an IRS program that impacts the delegation of federal employment tax responsibility. Both are important but different.
Q: Can I verify if a PEO is ESAC accredited?
A: Yes, you may search ESAC-accredited PEOs by state on ESAC’s official website. Always check accreditation status directly, not just from a PEO’s assertions regarding their certifications.