Extensis Group LLC., New Jersey’s leading Professional Employer Organization (PEO), announced today that it received approval from the Employer Services Assurance Corporation (ESAC). Their accreditation allows Extensis to provide its clients and employees with valuable assurance through ESAC’s Client Assurance Program and is testimony to the firm’s commitment to sound financial and operating principles.

Caveat Emptor - Latin for “Let The Buyer Beware”.

Over the years, I have advised business owners, entrepreneurs, executives, professional associations and non-profit organizations on a wide range of insurance and financial products and services. With few exceptions, when asked about a company’s background, history, financial strength and stability, I could refer to a number of qualified sources to provide accurate information.

When discussing life and health insurance products, employers want to make certain of a company’s ability to pay claims. There are rating agencies such as A.M. Best, Standard and Poors, Fitch Research and others. Their job is to evaluate these companies, rank them based on financial conditions, and routinely issue updated reports, so that investors and consumers can make knowledgable decisons.

This is not always the case when seeking the services of an employee leasing company or professional employer organization. Much too often, we read about PEO executives who used client’s funds to support a lavish lifestyle. Payments for payroll taxes, employee benefits, and workers compensation were directed to private overseas accounts or buried in a myriad of corporations. While many of these “cowboys and pirates” have been caught and are behind bars, I’m afraid that many others are operating for their own benefit as you read this.

Employer Services Assurance Corporation - Who and Why?

ESAC’s mission is to build trust and provide assurance to clients, worksite employees, insurers, taxing authorities, regulators, and the general public by providing the following services to the PEO industry:

1. Administering a PEO Client Assurance Program to provide financial assurance to clients, worksite employees, insurers and taxing authorities through surety bonds held by the Employer Services Trust on behalf of each Accredited Professional Employer Organization;
2. Administering a multi-faceted accreditation and monitoring process to ensure ongoing compliance with important ethical, financial and operational standards by Accredited Professional Employer Organizations; and
3. Working in cooperation with participating PEOs and other industry trade organizations to protect public interests and to promote continued industry growth.

ESAC has been accrediting PEOs since 1995 without a single default or unresolved complaint. ESAC accredited PEOs are regularly monitored for continuing compliance with all accreditation requirements including financial standard monitoring through:

• Quarterly submission of financial statements plus an annual audit by an independent CPA. ESAC’s staff, financial advisors and surety underwriters review all financial statements for compliance.


• Quarterly verification by an independent CPA of appropriate payment of taxes, benefit contributions and insurance premiums.


• Annual independent verification of adequate financial reserves for any loss-sensitive insurance plans that are not fully-funded in advance.


• Verification of adequate amounts of errors & omissions, fidelity and liability insurance coverages.

If an accredited PEO’s financial condition starts approaching ESAC’s minimum financial standards, the PEO submits financial statements and independent CPA certifications on a monthly rather than quarterly basis.

Being a member of ESAC certainly brings peace of mind to potential clients seeking the services of a professional employer organization. However, it is important to identify what resources and expertise your company’s needs first. Identify those firms that can provide the people, processes, HRIS platform, and employee benefit plans you want. After you’ve narrowed down the firms that can provide the quality and level of services you require, at a price within your budget, then consideration of their financial stability is essential.

A typical case involves ADP Totalsource. ADP may be the most finacially secure and stable PEO in the industry, if not the world. I know of many clients where the ADP service model was not a suitable fit for their company. Like many employers, they selected them initially because they heard of ADP, and knew they were a solid company. There are many terrific employee leasing and professional employer organizations to partner with. Don’t let size or a familar face mislead you into selecting the wrong partner.

Kudos to the Extensis Group for raising the bar. Congratulations.