Employer of record in West Virginia: PEO rules, payroll registration and what the client still owns (2026)

As of November 2026, West Virginia licenses professional employer organizations (PEOs) through the Offices of the Insurance Commissioner under W. Va. Code chapter 33, article 46A, and no one may provide or advertise professional employer services in the state without that license. The statute's test is narrower than many states': the services must cover "a majority of the employees of a client-employer" on a continuing basis, and temporary help is excluded, so whether an employer of record (EOR) holding one or two West Virginia workers for you needs a license depends on the size of your whole workforce. A licensee needs an audited financial statement and $100,000 in working capital or an equal bond. Whoever the agreement makes responsible for workers' compensation, the client stays ultimately liable for it.

This page is for a company outside West Virginia, or a staffing firm, deciding whether to employ a West Virginia worker through an EOR or PEO or to register itself. The general differences between an EOR, a PEO and payrolling are in what is an employer of record and payrolling services explained. The state hiring checklist is in hiring employees in West Virginia, and the separate employment agency license, with its monthly placement reports, is in staffing agency license in West Virginia. This page adds what those leave out: what the PEO license covers, what a PEO agreement must say, and which payroll duties stay with you.

West Virginia employer of record and PEO rules at a glance

Does West Virginia license PEOs or employer of record companies?

It licenses PEOs. Section 33-46A-4(a) says "no person may provide, advertise or otherwise hold himself herself or itself out as providing professional employer services to client-employers in this state, unless licensed under this article." A PEO is "a person engaged in the business of providing professional employer services, regardless of its use of the term," including a "staff leasing company," "employee leasing company" or "administrative employer" (§ 33-46A-2(g)). "Employer of record" is not a term the article uses, so what matters is whether the provider's services fit the definition below.

• Application. Business names used in the last five years by jurisdiction, owners of 25% or more, senior management, and "the PEO's most recent audited financial statement," no older than 13 months and "without qualification as to the going concern status of the PEO" (§ 33-46A-4(c)). The commissioner's forms page posts the licensing instructions and Form PEO-1; the instructions also ask for a list of all client-employers in West Virginia or with employees there.
• Working capital. "A minimum of $100,000 in working capital," or a bond, irrevocable letter of credit or securities of $100,000, held to secure "all taxes, wages, benefits or other entitlement due to or with respect to covered employees"; if working capital is negative, the bond is $100,000 plus the deficit (§ 33-46A-4(h)).
• Renewal. "Within one hundred eighty days after the end of a licensee's fiscal year," with an updated audited statement (§ 33-46A-4(g)).
• Fees. The statute sets "$200" for an application or renewal and "$100" for annual reports (§ 33-46A-4(j)). The commissioner's instructions (revised October 2019) ask for "a $300.00 non-refundable application filing fee," a $200 fee for a limited license and a $300 late fee on any renewal not filed on time. Confirm the current amount before filing.
• Limited license. For a PEO licensed in another state on substantially similar terms, with no West Virginia office, no direct solicitation of West Virginia clients and no more than 50 covered employees "employed in this state on any given day" (§ 33-46A-4(i)).
• Agreements on file. Every agreement is filed with the commissioner within 20 days of signing and is confidential (§ 33-46A-6(d)).
• Operating unlicensed. Treated like the unauthorized transaction of insurance, with injunctive, civil, administrative and criminal penalties, and the Insurance Fraud Unit may investigate (§ 33-46A-4a).

Ask any provider for its West Virginia PEO license and confirm it with the Offices of the Insurance Commissioner before you sign.

What if the EOR employs only one or two of your workers?

Read the definition closely. Professional employer services are employer functions, such as hiring, firing, paying wages, withholding payroll taxes and providing workers' compensation, that are allocated to a PEO by agreement, "Exercised with respect to a majority of the employees of a client-employer," and "Intended to be of a continuing rather than a temporary or seasonal nature" (§ 33-46A-2(h)). The article also excludes "a person who provides temporary help services" and a person who neither holds itself out as a PEO nor makes PEO agreements its principal business (§ 33-46A-2(g)).

On those words, an EOR that employs every worker of a small company fits; one that employs a single West Virginia hire for a company with hundreds of employees elsewhere may not, because that worker is not a majority of the client's employees. If the provider says it needs no license for that reason, ask it to explain its reading in writing. Either way, whoever is the employer on paper still registers with WorkForce West Virginia, withholds state tax and arranges workers' compensation. If it also recruits candidates and places them on someone else's payroll, the Division of Labor's employment agency rules in staffing agency license in West Virginia may apply as well.

Who pays West Virginia unemployment tax on an EOR or PEO worker?

Whoever the agreement says. Every PEO agreement must "allocate the responsibility to" arrange payment of wages and to "Withhold, collect, report and remit payroll-related and unemployment taxes" (§ 33-46A-6(a)). We found no separate rule in West Virginia's unemployment compensation chapter that tells WorkForce West Virginia to report a PEO's covered employees under the PEO's account or the client's, so read the agreement and ask whose employer account number the wages will be reported under, and whose experience rating a layoff will affect.

The liability test is low. WorkForce West Virginia says an employing unit is liable if it "pays $1,500 or more in total gross wages in a quarter or has at least one employee during twenty different weeks during a calendar year," or is liable under federal unemployment tax law and has "at least one employee in West Virginia, regardless of the number of weeks employed or amount of payroll," per its registration page. You apply to WorkForce West Virginia, by email if possible, and it then issues an employer account number.

Who carries workers' compensation in West Virginia?

Coverage is mandatory for "all persons, firms, associations, and corporations regularly employing another person or persons for the purpose of carrying on any form of industry, service, or business in this state," with narrow exceptions such as domestic service (W. Va. Code § 23-2-1). The PEO article adds:

• Allocate it in writing. The duty to obtain coverage "shall be specifically allocated in the professional employer agreement to either the client-employer or the PEO" (§ 33-46A-7(a)).
• The client stays on the hook. If the PEO takes it on, it must buy from a carrier authorized in West Virginia, but "the client-employer shall at all times remain ultimately liable under chapter twenty-three of this code to provide workers' compensation coverage for its covered employees" (§ 33-46A-7(b)(1)). Ask for the certificate naming your company and a promise of notice if the policy lapses.
• Policy forms. A master policy covering several clients, separate coordinated policies for each client, or another basis the commissioner approves (§ 33-46A-7(c)).
• Exclusive remedy. The protection applies "to the PEO, the client-employer, and to all covered employees and other employees of the client-employer irrespective of whether the PEO or the client-employer obtains the workers' compensation coverage" (§ 33-46A-7(e)).

Which West Virginia registrations, reports and notices still apply?

• Business registration. "Before engaging in business activity in West Virginia, every individual or business entity must obtain a West Virginia business registration certificate," per the State Tax Department. The PEO registers itself; ask your own tax adviser whether your company's activity in the state calls for one too.
• Withholding. Employees complete Form WV/IT-104. Residents of Kentucky, Maryland, Ohio, Pennsylvania or Virginia whose only West Virginia income is wages can claim exemption on Form WV/IT-104NR, per the Tax Division form.
• New-hire reporting. "Employers shall submit a report within fourteen days of the date of the hiring, rehiring or return to work," including contractors paid $2,500 or more in a year (§ 48-18-125).
• Pay notice at hire. Employers must "Notify his employees in writing, at the time of hiring of the rate of pay, and of the day, hour, and place of payment" (§ 21-5-9). Ask who sends it and keeps the copy.
• Posters. The Division of Labor lists its required posters. Ask how a remote worker receives them.
• Paid leave programs. We found no West Virginia paid family leave or disability insurance program that needs a separate employer registration.

What does the client company still own in West Virginia?

By statute, a lot. Every PEO agreement "shall provide that the client-employer shall retain the right to hire, discipline, and terminate a covered employee" (§ 33-46A-6(b)), and the client is "solely responsible for directing, supervising, training and controlling the work of a covered employee" (§ 33-46A-6(c)(2)). The article does not diminish a covered employee's rights against the client, "including but not limited to rights and obligations arising from civil rights laws guaranteeing nondiscrimination in employment practices" (§ 33-46A-3(b)(1)). In practice:

• Screening. West Virginia has no ban-the-box law for any employer and no pay transparency statute; see ban the box in West Virginia and West Virginia background check laws. Drug testing follows the Safer Workplace Act and the medical cannabis rules in West Virginia drug testing laws.
• Interviews. A party may record, but disclosing an unlawful recording is an offense; see West Virginia recording consent law for interviews.
• Covenants. The article does not affect restrictive covenants between the client and a covered employee, whether signed before or after the PEO agreement (§ 33-46A-3(b)(2), (3)). See West Virginia non-compete law.
• Quality and safety of the work. The client is "solely responsible for the quality, adequacy or safety of the goods or services produced or sold" in its business (§ 33-46A-6(c)(1)).
• Co-employment liability. See joint employer liability for staffing agencies.
• Federal payroll taxes. The IRS says a company that outsources payroll "generally remains responsible for paying taxes and filing returns," unless the PEO is certified; see the IRS's CPEO public listings.

When is registering your own company in West Virginia the better route?

Registering yourself means a business registration certificate, a WorkForce West Virginia account, a withholding account, IT-104 forms, written pay notices, 14-day new-hire reports and a workers' compensation policy from the first regular employee. Because the client stays ultimately liable for workers' compensation anyway, and the PEO's license may not even apply to a single hire at a large company, that route often wins once you expect more than a couple of West Virginia hires or already run multi-state payroll. A licensed PEO fits a small company that wants payroll, benefits and comp handled together for its whole team; a temporary help firm fits a short assignment.

Questions to ask an employer of record or PEO before signing for West Virginia

1. Do you hold a West Virginia PEO license or a limited license from the Insurance Commissioner?
2. If not, why do you say our arrangement is not professional employer services, and will you put that in writing?
3. Does our agreement allocate wages, payroll and unemployment taxes, benefits and workers' compensation, as § 33-46A-6 requires?
4. Whose WorkForce West Virginia account will report the wages, and whose experience rating will our claims affect?
5. Who is the workers' compensation carrier, will the certificate name us, and how will we hear if it lapses?
6. Who sends the written pay notice at hire and files the 14-day new-hire report?
7. Does the agreement confirm that we keep the right to hire, discipline and terminate, and does it change any covenant the worker signed with us?
8. Are you an IRS-certified PEO, and who is liable for federal employment taxes if a deposit is missed?

Employer of record rules in other states: Maryland, Ohio, Pennsylvania, Virginia, Tennessee, the District of Columbia, Vermont, Wisconsin and Wyoming.