A Guide to Ohio PEO Services

Ohio’s employment and labor laws often present a hurdle for businesses looking to expand operations while staying compliant. A professional employer organization (PEO) can help you overcome these challenges by taking over HR, payroll, and risk management leaving finance teams free to focus on growth.

Read on to discover how partnering with a PEO could impact your company and support long-term objectives.

The role of PEOs in Ohio

PEO services take care of key functions like payroll, tax compliance, and benefits administration, simplifying many aspects of workforce management. This allows in-house teams to channel more resources toward core business objectives and expansion.

While you pay the PEO for a service, the arrangement is more like a partnership. You enter into a co-employment relationship with the provider where they assume substantial responsibility for tax and HR compliance. However, you still maintain control over your staff and day-to-day decision-making.

Ohio regulates PEOs operating within the state to ensure compliance with its laws and protect businesses. All providers are required to register annually with the Bureau of Workers’ Compensation (BWC) and prove they have the working capital to support all their client companies. The state reserves the right to revoke the arrangement at any moment if the PEO violates local laws.

PEOs based outside the state can apply for limited registration if they don’t have physical offices, don’t solicit business in Ohio, and employ fewer than 50 workers collectively.

Benefits of partnering with an Ohio PEO

Partnering with a PEO in Ohio is an effective growth strategy. The provider can support your operations and minimize risk to your business while you concentrate on expansion. Here’s a closer look at the benefits of using a PEO:

Greater efficiency and cost savings

A PEO can streamline your operations and save you costs. For a predictable monthly fee, you can gain access to expert HR and payroll services so you don’t need to hire internal staff until it makes sense for your business.

Leading PEOs also offer advanced HR and payroll technology to streamline operations further. You can benefit from powerful automation and analytics tools, improving efficiency without compromising accuracy.

Access to a range of expertise

Small to medium businesses may not have the budget to hire in-house experts, making it harder to support growth. This also leaves you vulnerable to more financial and legal risks but you’re less likely to be able to absorb these penalties.

A PEO gives you HR and payroll experts on demand. While the fee remains the same, you can speak to the provider’s extensive team about optimizing processes and avoiding common pitfalls.

Affordable employee benefits plans

Through your partnership, your business can access more competitive benefits packages such as health insurance and retirement plans. The PEO has a large, collective workforce so they can leverage this to negotiate better deals with state providers.

In addition, PEOs can help you manage state-mandated benefits plans. Ohio requires you to secure workers’ compensation for all your employees but this responsibility automatically passes to the provider in a PEO partnership.

Enhanced compliance

Navigating complex federal and state laws is daunting with non-compliance potentially leading to significant penalties and legal action. For example, an Ohio-based business recently had to pay over $150,000 to settle a discrimination case with a former employee trying to return to work after approved medical leave.

A PEO can help you identify and mitigate risks when managing HR, payroll, and benefits. This allows your team to spend less time on compliance management while giving you peace of mind that your company is protected.

Payroll, labor, and employment laws in Ohio

Ohio expects employers to follow a combination of federal, state, and local regulations. Partnering with a PEO shifts the responsibility for staying compliant with these rules from the client company to the provider.

Here’s a breakdown of the main laws in Ohio:

Payroll and benefits laws

• Minimum wage: On January 1st, 2025, Ohio increased its minimum wage to $10.70 per hour for non-tipped workers and $5.35 for tipped workers. There’s a lower rate of $7.25 for businesses that gross $394,000 or less in the year
• Overtime: You must pay an overtime rate of 1.5 times the employee’s regular wages for any hours worked over 40 in a standard week. Employees grossing less than $150,000 per year are exempt
• Deductions: Employers must seek permission from workers before deducting anything from employee wages not required by federal, state, or local law
• Pay transparency: Ohio doesn’t have state-wide pay transparency laws requiring you to disclose salary ranges in ads or upon request. However, some cities have passed salary history bans, meaning you can’t inquire about what candidates have earned in previous roles
• Payment method: If you don’t have a written agreement concerning the provision of wages, you must pay the entire amount in cash
• Paydays: You must pay employees at least semi-monthly. Work done in the first half of the month must be paid by the 1st of the following month. Likewise, work done in the second half of the month must be paid by the 15th of the following month
• Sales: Employers can’t sell items to workers unless they’re made by the business or part of their usual products and services. You can make an exception for items like meals, confectionary, and safety equipment

Labor laws

• Meal and rest breaks: Ohio doesn’t mandate meal and rest breaks for workers but many employers choose to include them in their policies
• Paid time off (PTO): You’re not required to give or pay out PTO unless you include it in your company policy
• Workers compensation insurance: All employers in Ohio are required to obtain insurance from the Bureau of Workers’ Compensation. You must keep detailed records and make them available to the Bureau upon request
• Workplace safety: It’s the employer’s responsibility to provide a safe workplace including providing the right equipment and scheduling reasonable shifts
• Union laws: Employers can’t interfere with union activities or discriminate against workers who have joined a union. You’re also required to negotiate with certified representatives
• Job information: You’re allowed to disclose information about a worker’s performance to another prospective employer provided everything is true and you act in good faith

Employment laws

• Worker classification: There are several tests to determine whether someone should be classified as an employee or an independent contractor. All tests generally gauge the level of control and direction you have over your workers
• At-will employment: Ohio is an at-will state, which means you can terminate an employment contract at any moment provided the reason is legal. However, you can’t violate the terms of any written agreements between you and workers
• Discrimination: Employers can’t discriminate between workers based on factors like age, gender, and disability. You can only pay different salaries for the same role when you have a clear seniority or meritocracy system
• Family leave: Ohio defaults to the federal Family and Medical Leave Act (FMLA) and gives new parents up to 12 weeks of paid leave. Employees must take the leave within one year of the birth or adoption and be named as the biological parent or legal guardian
• Sick leave: Under the FMLA, your employees can also take up to 12 weeks of PTO for serious illness or injury in Ohio. They must supply you with a medical certificate as proof of their condition
• Policy: You’re free to include policies about the number of hours required, location of work, and notifications about schedule changes in your employment contract

Additional requirements and enforcement

Beyond compliance with these laws, you’re required to pay unemployment insurance (UI) for any employees in Ohio. You must register with the Department of Job and Family Services the moment you hire your first eligible worker.

The following types of workers are exempt:

• Students working for their educational institute while attending classes
• Family members employed by a sole proprietorship
• Workers employed by churches or religious organizations
• Individuals in rehabilitation programs who aren’t ready for competitive employment
• Employees of nonprofits earning less than $50 per quarter
• People engaged in state or federally funded work relief or training programs

In 2025, you can expect to pay between 0.4% and 10.1% on a taxable wage base of $9000. New employers start at 2.7% unless they’re in the construction industry where it’s 5.6%.

You may be subject to other laws depending on your industry. Where there’s any overlap with federal and state law, you’re generally required to comply with the ones offering workers the great rights.

See also: Your Ultimate Guide to Ohio Payroll

How to choose the right PEO in Ohio

The right PEO can keep your business updated with all the relevant federal and state laws while streamlining your operations. Here are the seven steps you can take to assess each provider and determine whether they’re a good fit:

1. Define your business needs

Begin with a comprehensive review of your payroll, benefits, and HR operations to look for inefficiencies. Consider how the PEO could help you streamline these processes and save costs.

Think about your long-term goals as well as your short-term requirements. A great provider should be able to adapt its services as your organization expands and its needs evolve.

2. Research PEOs with Ohio expertise

Prioritize PEOs with a strong presence in Ohio and a history of success with similar companies. Case studies and testimonials can tell you about the quality of each provider’s service and give you an idea of how they handle issues.

Additionally, check all PEOs are registered in the state of Ohio as this shows they’re legitimate and meet the required standards to support your operations.

3. Evaluate the range of services and quality of benefits

Explore the services provided by each PEO to check whether they align with your specific needs and goals. Benefits are a key focus area—the provider should be able to guarantee comprehensive packages at a competitive rate.

Also, assess how easily the PEO can tailor its services to your unique setup. For example, consider how easily you can customize their HR and payroll tools to your processes and incorporate them into your operations.

4. Assess compliance and risk management capabilities

Research how the PEO stays updated with federal, state, and local regulations and how they communicate any regulatory changes to client companies. They should take a proactive approach to ensure you’re always one step ahead of any potential disruptions.

Leading PEOs offer tools to help you monitor and keep up-to-date with laws. For example, Deel has a Compliance Hub that notifies clients of regulatory updates and flags compliance risks. We translate new legislature into straightforward, accessible language and send the relevant updates to your business.

5. Check customer service and support

Assess the PEO company’s support, looking closely at its availability, contact options, and average response times. Compliance issues are often time-sensitive, so you need to know the team will provide prompt and expert assistance.

Ask whether they offer a dedicated customer success manager as this gives you a single point of contact. You can count on this person to familiarize themselves with your business so they can offer targeted support.

6. Review and negotiate the contract

Carefully review the PEO contract to ensure it clearly outlines all your rights and responsibilities. If necessary, consult with a legal professional to confirm the agreement aligns with your company’s objectives. They can clarify any legal terminology and help you negotiate any unfavorable terms with the provider.

7. Plan for implementation and transition

Prepare your team for the transition to a PEO. Inform employees about all the upcoming changes and explain the benefits of partnering with the provider. You can encourage them to ask questions and get their input on what’s working well and what’s not.

Work closely with the PEO to develop a timeline with clear milestones for each stage of the transition. This can help you keep the initiative on track and develop a strong foundation for the partnership.

See also: How to choose a US PEO

Manage your Ohio, US, and global workers with Deel

Deel makes payroll and HR management easy, whether you’re hiring in one state, across the country, or around the world.

As your PEO*, Deel takes care of payroll, HR, and benefits administration while ensuring state tax compliance and handling sensitive issues by providing:

• Expert payroll administration
• Access to benefit plans from leading carriers and benefits administration
• Robust HRIS with free IT, Finance, and PTO management
• State-specific training, HR policies, and on-demand HR support
• Advanced tax and benefits compliance
• And more

Book a demo to learn more about using Deel’s PEO in Ohio.

*Provided by Deel PEO US, LLC, Deel Employment Services, LLC, or through Deel's partnership with licensed providers where required.