PEO sales reps are good at their jobs. They’ll walk you through the benefits, show you a competitive rate, and make the whole thing feel seamless. What they won’t do is proactively surface the questions that might slow down the sale. That’s not because they’re dishonest — it’s because their incentive is to close. Your incentive is to make the right decision. Here are ten questions that separate a good deal from a bad one.
Before You Sign
1. What is my all-in cost per employee, including every fee? Not the admin fee. Not the quoted rate. The total — including workers’ comp, benefits, FICA, state unemployment, and any add-on charges. If the rep can’t give you this number, the proposal isn’t transparent enough to evaluate.
2. What happens to my rate at renewal? Many PEOs offer an attractive first-year rate and then raise it significantly at renewal. Ask what the historical renewal increase has been for clients in your industry, and whether there’s a rate cap or guarantee in the contract.
3. Who is the workers’ comp carrier, and what’s their AM Best rating? Your workers’ comp is only as good as the carrier backing it. An AM Best rating below A- should raise questions. I check carrier ratings for every PEO I evaluate because this single factor determines whether your coverage is solid or fragile.
4. What’s the termination clause? Some PEO contracts require 30 days’ notice. Others have 90-day windows, early termination fees, or auto-renewal provisions. Know exactly what it takes to leave before you sign.
5. Is EPLI included, and what are the limits? As I’ve written about in my post on EPLI through a PEO, this coverage is critically important — and not every PEO includes it. Ask for the specific per-claim and aggregate limits.
About the Service
6. Who is my day-to-day contact after I sign? Sales reps often disappear after the deal closes and you’re handed off to a service team. Ask who your dedicated contact will be, what their response time SLA is, and what happens if the relationship isn’t working.
7. How do you handle claims management? When an employee files a workers’ comp claim, who manages it? Is there a dedicated claims team, or does it get routed to a generic carrier hotline? Proactive claims management can reduce your costs by 20-40% over time.
8. Can I see a sample employee self-service portal? Your employees will interact with the PEO’s technology daily. If the portal is outdated or clunky, it reflects on your company. Ask for a demo before you commit.
About the Fine Print
9. What data do I get to keep if I leave? Payroll history, tax filings, employee records, benefits enrollment data — confirm that all of it transfers to you or your next provider. Some PEOs make this harder than it should be.
10. Are there any services in the proposal that are outsourced to third parties? Some PEOs outsource their payroll processing, benefits administration, or HR support to third-party vendors. That’s not necessarily a deal-breaker, but you should know who’s actually doing the work.
These questions aren’t designed to scare you away from PEOs — they’re designed to make sure you sign with the right one. If a PEO can answer all ten confidently, that’s a good sign. If they dodge or deflect, you’re learning something important. And if you’d rather have someone ask these questions on your behalf, that’s exactly what I do.
Want someone to ask these questions for you?
I ask these questions — and dozens more — for every PEO I evaluate. Let me do the due diligence so you don’t have to.
The right PEO will welcome these questions. The wrong one will dodge them. I make sure you end up with the right one.
Related: How to Compare PEO Proposals · The Real Cost of a PEO · Book a Free Consultation