Employer of record in New York: PEO registration, payroll accounts and what the client still owns (2026)

New York does not license "employers of record," but it does require professional employer organizations (PEOs) to register. As of October 2026, the New York Professional Employer Act (Labor Law Article 31) bars a PEO from doing business in or into New York unless it is registered with the Department of Labor, renewed each year, and a registered PEO pays unemployment insurance under its own account and rate and is the employer for state income tax withholding. Workers' compensation, disability and Paid Family Leave coverage for the leased employees must be written in the client's name, and a client that uses a PEO it should have known was unregistered can be fined.

This page is for a company outside New York, or a staffing firm, deciding whether to employ someone in New York through an employer of record (EOR) or PEO, or to register itself. How an EOR, a PEO, a staffing agency and payrolling differ is in what is an employer of record and payrolling services explained; the full New York checklist is in hiring employees in New York; and employment agency licensing, which the PEO Act expressly sets apart, is in staffing agency license in New York. This page adds PEO registration, the payroll accounts, the insurance rules and what stays with you.

New York employer of record and PEO rules at a glance

Does New York license or register employer of record companies and PEOs?

It registers PEOs. Labor Law § 918 says a PEO "shall not engage in business from offices in this state or enter into any arrangement with a person for the purpose of providing professional employer services ... to persons in this state unless the professional employer organization is registered," and bars using titles such as "PEO," "staff leasing company" or "employee leasing company" without registering. The application under § 919 lists business names, offices, the employer identification number, names used in the past five years and, for a privately held company, owners of 5 percent or more. The Department of Labor's PEO page says PEOs "must either register or obtain an exemption" and renew that status each year, with proof of New York workers' compensation and disability insurance and certification of tax payments.

The money test is in § 921: a reviewed or audited financial statement showing "a minimum net worth of seventy-five thousand dollars," or, if the department requires it instead, a $75,000 bond or securities it can sell to pay "taxes, wages, benefits or other entitlement due a worksite employee." Every quarter, within 60 days, the PEO files a CPA's statement that all federal and state payroll taxes were paid on time. We did not find a registration fee in the statute or on the department's PEO pages.

To check a provider, use the department's list of currently registered PEOs, which shows each registration's expiration date; the version we checked was dated October 1, 2026.

What if the provider is an employer of record but not a registered PEO?

First see whether the Act covers it at all. Under § 916, a professional employer agreement is one in which the PEO "expressly agrees to co-employ all or a majority of the employees providing services for the client," the contract is "on-going rather than temporary," and hiring, firing and discipline are expressly allocated. "Temporary help firms and employment agencies, as defined in article eleven of the general business law, shall not be deemed to be professional employer organizations." So:

• An EOR employing one or two of your people, while the rest of your staff are your own employees, may fall outside the "all or a majority" wording. Ask the provider which New York rules it says apply, and whose NYS-100 employer account will carry the wages.
• A staffing firm that recruits and hires its own employees and assigns them to support your workforce is a temporary help firm under § 916(5), not a PEO.
• A firm that places people for a fee may need an employment agency license instead; see the New York staffing agency license guide.

Who pays New York unemployment insurance and withholding on a PEO worker?

The PEO, for both. Section 923 makes it liable "for the payment of contributions, penalties and interest on wages paid by the professional employer organization to worksite employees" and says it "shall 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." Section 922(2) makes the PEO "an employer for the purposes of withholding state income tax," and § 922(3) has it pay wages and collect, report and remit employment taxes from its own accounts. For anyone you employ directly in New York, you still need your own NYS-100 registration; the $300-a-quarter liability test is in our New York hiring checklist.

Whose name goes on the workers' compensation, disability and Paid Family Leave policies?

The client's. Section 922(3)(c) has the PEO "secure and provide required workers' compensation coverage for its worksite employees either in its own name or in its client's name," and § 922(4) makes both companies the employer for workers' compensation, each protected by the exclusive remedy rule. The Workers' Compensation Board's coverage page describes the two methods it accepts:

• the client buys its own workers' compensation policy covering its leased employees; or
• the PEO obtains a policy "in the name of the client which would cover the leased employees only."

Either way, the carrier files proof of coverage "using the client legal entity name and FEIN," and the Board warns that employers are responsible for covering "ALL" of their employees, so a client with direct employees outside the PEO may need a separate policy. The Board's disability and Paid Family Leave page applies the same two methods, says that filing "should not be filed using the PEO's FEIN #, name or address," and adds that leased employees "are NOT considered employees of the PEO" for disability and Paid Family Leave.

Which registrations, reports and notices still apply?

• Notice of the PEO relationship: the PEO gives worksite employees written notice of "the general nature of the relationship" (§ 922(1)(b)).
• Withholding certificate: Form IT-2104, alongside the federal W-4.
• Pay notice at hire: Labor Law § 195(1) requires a written pay notice with a signed acknowledgment kept for six years; agree which party issues it and keeps the record.
• Sexual harassment policy and electronic monitoring notice: both due at hire under Labor Law § 201-g and Civil Rights Law § 52-c, as set out in the hiring checklist.
• New-hire report: to the Department of Taxation and Finance within 20 calendar days of the hiring date, per its new hire reporting page.

What does the client company still own in New York?

• Direction and control. Under § 922(1)(a)(i) the client keeps the direction and control "necessary to conduct the client's business," discharge fiduciary duties and comply with its licensing.
• Licenses and labor relations. A licensed worker is "deemed an employee of the client" for the license, collective bargaining agreements are unaffected, and rights under the National Labor Relations Act do not change (§ 917).
• Other insurance. Worksite employees are not automatically covered by the PEO's general liability, auto, fidelity or similar policies unless the agreement and policy name them (§ 922(6)(b)).
• Job postings and screening. Pay ranges in postings at four or more employees, no salary history questions, Article 23-A for convictions, and New York City's Fair Chance and AI bias audit rules; see New York pay transparency, New York ban-the-box and New York background check laws.
• Interviews. New York is one-party consent, but candidates elsewhere may not be; see New York recording consent law for interviews.
• Co-employment exposure. See joint employer liability for staffing agencies.

When is registering your own company in New York the better route?

• You will carry the insurance anyway. Workers' compensation, disability and Paid Family Leave for leased employees are in your name under either Board method.
• You expect several New York employees. NYS-100 registration covers unemployment insurance and withholding in one form.
• The provider is not a registered PEO and not clearly the employer. You may be the employer already, without the registrations, and § 924 can fine a client that should have known.
• The engagement is a short project. A temporary help firm that employs and assigns the worker may fit better than an ongoing PEO agreement.

Questions to ask an employer of record or PEO before signing for New York

1. Are you on the Department of Labor's list of registered PEOs, or do you hold a current exemption? When does it expire?
2. If you are not a registered PEO, which category are you in, and whose NYS-100 account will report the wages?
3. Will the workers' compensation and disability and Paid Family Leave policies be in our name and filed under our FEIN, and do we need separate policies for our direct employees?
4. Can you show your latest quarterly CPA statement that payroll taxes were paid?
5. Who issues the § 195(1) pay notice and keeps the signed acknowledgment?
6. Who files the new-hire report and gives the written notice of the PEO relationship?
7. How are hiring, firing and discipline allocated in the agreement, as § 916 requires?
8. Are you an IRS certified professional employer organization, and who is liable for federal employment taxes if you fail to pay?
9. Which of your liability policies, if any, name our worksite employees?

Comparing states? Florida licenses employee leasing companies (employer of record in Florida), and California has no PEO license but its own test for who the employer is (employer of record in California).