Alabama Department of Labor

New Law Requires PEO Registration with Labor

Every business currently operating as a Professional Employer Organization (PEO) in Alabama has until January 1, 2007 to register with the Alabama Department of Labor, as required by a new state law.

The Alabama Legislature enacted the Alabama Professional Employer Organization Registration Act on March 7, 2006, and Governor Bob Riley signed the bill on March 13. The law became effective on June 1. A PEO that was not operating in Alabama on June 1 must complete initial registration prior to launching its business. Under the law, PEOs must renew their registration annually with Labor.

PEO registrations may be completed online through the home page of the Labor Web site, www.labor.alabama.gov. In addition to online registration, PEOs are required to submit a registration fee, along with various documents, including financial statements and proof of workers' compensation insurance. Labor will not issue a registration certificate until all attachments and fees have been received.

Any PEO that fails to register is liable for a civil penalty of $100 per day until the registration process is completed. A complete copy of the Alabama Professional Employer Organization Registration Act is available for review on the Labor Web site.

Some PEOs may qualify to operate in Alabama under a limited registration. As a limited registrant you (1) must be domiciled outside the state, (2) must be licensed or registered as a PEO in another state with substantially the same or greater requirements of this act, (3) must not maintain an office in the state or solicit clients located in the state, and (4) must not have more than 50 covered employees in the state on any given day.

Notice must be posted in each business office of the PEO which states that the PEO is registered and regulated by Labor, and that any questions or complaints should be addressed to the director. Notice must be maintained in the administrative office of all client employers stating the name of the PEO they are associated with, that the PEO is registered and regulated by Labor, and that any questions or complaints should be addressed to the director.

For further information or assistance with the PEO registration process, contact the Labor Workers' Compensation Division (toll free) at 1-800-528-5166, or by e-mail at craig.white@labor.alabama.gov.