2025 Year in review

On Capitol Hill, we meaningfully moved the ball forward for NAPEO and the PEO industry in several key areas:

• Building Support for H.R. 3223: The pro-PEO bill to clarify liability for payroll tax credits and improve processing of credits for small businesses now has 18 co-sponsors, a mix of both Democrats and Republicans.
• Raising the PEO Profile: Through sustained advocacy, strategic engagement and consistent messaging, we have significantly elevated awareness of the PEO industry and our priorities on Capitol Hill. As a result, we now have key relationships with lawmakers that are paying real dividends.
  • Rep. Max Miller spoke on behalf of NAPEO about the need to modernize the IRS during a Ways and Means Committee hearing.
  • Rep. Beth Van Duyne discussed NAPEO talking points on IRS modernization with Treasury Secretary Scott Bessent during a Ways & Means Committee hearing.
  • Sen. Tim Scott submitted to the IRS Commissioner a NAPEO-requested question on ERTC processing delays.

• Engaging with Federal Agencies: From the IRS to the Office of Management and Budget to the Department of Labor and beyond, NAPEO has sought and received critical guidance and clarifications for PEOs on implementation of the no tax on tips and overtime provisions of the One Big Beautiful Bill Act and continued to advocate for the industry on Form 5500 and other problematic regulations.
• IRS Modernization: NAPEO waged war on “Big Fax” with a digital ad and media campaign that took aim at the IRS’s continued reliance on antiquated technology and pushed Congress and the IRS to replace outdated, paper-heavy processes with secure digital processes and technologies.
• ERTC: We stepped into the breech on the ERTC to advocate for PEO clients and small business nationwide, keeping up the pressure the IRS to clear out the huge backlog and getting much-needed clarifications and guidance for PEOs when the program was ended.
• Member & Client Involvement: NAPEO, Justworks and several PEO clients met with eight Congressional offices to educate lawmakers on the real impact of ERTC processing delays. After the meetings, members of the NY delegation sent a letter urging the IRS to step up efforts to quickly process claims and shortly thereafter, the IRS announced the disbursement of $50 million in ERTC credits to 585 small businesses across New York.

NAPEO was heavily engaged and highly successful in the states this year, passing pro-PEO legislation in multiple states and successfully defeating harmful proposals in others.

Oregon: Passed NAPEO’s UI reporting bill that codifies existing PEO UI reporting practices and allows client by client reporting elections and wage base carry over in the state. Also passed a bill to update and modernize outdated PEO statutory definitions.

New Jersey: Passed NAPEO legislation that moves liability from the PEO to the client for the employee separation notification requirement to the Department of Labor & Workforce Development.

California: Advanced the PEO Model Act through the Assembly and Senate Labor and Appropriations Committees. We are carrying the bill over to 2026 to further educate the governor’s office on the bill.

Texas: Worked with the Texas Department of Licensing & Regulation to pass a bill that extends a PEO’s employer status of covered workers for 18 months should a PEO fail to renew its license in time.

Georgia: Advanced the PEO Model Act further than ever before by passing the House with a 165-7 vote. The bill will carry over to 2026 after opposition in the Senate Subcommittee.

Indiana: Prevented a UI reporting change that would have repealed PEO level reporting, ensuring that Indiana remains an option reporting state.

Maine: Successfully convinced the state’s Department of Labor to delay a reporting switch from using the PEO UI rate to the client rate, allowing our members time to make the necessary programmatic and technological changes to comply with the change.

Kansas: Worked with the Secretary of State to pass a bill that amends the PEO Act to reflect a set renewal date of October 15 for PEO licensing, removes the irrevocable letter of credit or securities requirement and lowers all fees to $250 across the board.

Montana: Worked with the Department of Labor & Industry to pass a bill that removes onerous and burdensome registration requirements for PEO registration and have received confirmation that DLI will not be pursuing a UI reporting change when lawmakers go back in session in 2027.

North Carolina: Engaged on a Department of Insurance driven bill and successfully secured amendments extending the timeline for PEOs to file quarterly financial reports from 45 days to 60 days.

Nebraska: Defeated the Department of Insurance’s proposed PEO registration and licensing fee increases.

Our PAC is a powerful and effective tool to build relationships and strengthen PEO comprehension and support in Washington. Our investments in the PAC are already paying dividends – we’re leveraging the relationships we’ve formed in Congress to create certainty and opportunities for the industry.

• Total raised: $178,000, one of our biggest years ever
• Number of NAPEO members and staff who donated to the PAC: 115
• Total industry impact for 2025-2026 election cycle:
  • NAPEO PAC Donations: $177,938
  • Direct contributions by NAPEO Members to Lawmakers: $106,450

Total Industry Impact: $284,388

• PEO Operations Workshop: We successfully merged the Risk Management Workshop and CFO & Payroll Seminar into an expanded event, the PEO Operations Workshop. It included more education, networking and collaboration and got rave reviews from attendees.
• Annual Conference: The 2025 NAPEO Annual Conference & Marketplace in Austin had more fully registered attendees than ever before and our largest-ever exhibit hall.
• NAPEO NextGen: We enhanced our focus on developing the next generation of PEO industry leaders with the inaugural NAPEO NextGen Leadership Workshop and the selection of the first NextGen Leadership Class, honoring the rising stars of the industry.
• Advanced Event Scheduling: The full slate of 2026 NAPEO events has been scheduled and announced, allowing members to plan ahead and make the most of their NAPEO membership.