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In every state you operate in, there is one call, one action that is universally dreaded by business owners and operators alike... it's the call to the EDD to set up SUTA accounts.

 

A couple of terms:

 

EDD - Economic Development Department (though it may feel like anything but)

SUTA - State Unemployment Tax Act

 

This call (or worse, a random government website) usually ends in frustration, time sucks, and a boatload of homework.  In the old days... you would never think to try and solve this problem by outsourcing.  You were likely hiring in your own state so at worst you had to waste a day setting up that state and then you'd mercifully never deal with the EDD or SUTA tax ever again.  Then Covid hit.  All of a sudden employees could live and work from anywhere and you as a business owner had to set up SUTA accounts all over the US even as a small company!!!

 

PEOs sometimes do this on behalf of the companies they contract with using a contract called a Power of Attorney (PoA), they could act on behalf of their client companies and set up new SUTA accounts on their behalf.  Not all PEOs are created equal on this account however!  Many are living in the past and not using PoAs and actually require the companies to still make that phonecall.

 

It is crucial you ask your potential PEO partners whether they use a PoA to establish new entities in the states you will operate in.  If nationwide expansion is in your plans this will save you countless hours in your onboarding of new employees in new states.