HALFTIME REPORT

At the beginning of the year, I wrote that we were focused on “moving the chains.” While there’s a lot we continue to plug away on, we’ve already put some points on the board.

Our advocacy efforts continue to gain traction in Washington and across the states which many of you support by meeting with officials, submitting letters and contributing to NAPEO PAC (with 6 months left in the year, the 2025-2026 cycle is already NAPEO PAC’s strongest ever). Your support and involvement make a difference.

This was on full display a few weeks ago during PEO Capitol Summit when we held more than 100 meetings (a NAPEO record) with Congressional offices. Connecting industry constituents directly with policymakers is a key part of our strategy to elevate the visibility of the PEO industry, and anyone who participated last month could feel it working.

NAPEO’s sustained focus on IRS modernization and ERTC processing has elevated these issues among policymakers and regulators. Government reports released earlier this year validated many of the concerns our industry has raised for years, underscoring the credibility and effectiveness of our advocacy strategy.

Importantly, we now have a standing monthly meeting with IRS officials overseeing ERTC processing. Since the first meeting, nearly 20 additional processors have been added to the team and we’re seeing meaningful drops in the backlog. There remains more work ahead, but we’re moving in the right direction.

To further assist NAPEO members with ERTC-related issues, we developed a guide on how to engage your elected representatives in what they call “Congressional casework.” I know a few companies have already had positive results after contacting their representatives. While Members of Congress cannot force an outcome or resolution, inquiries from Congressional offices will receive attention and consideration from IRS officials.

We’ve also continued building support for H.R. 3223 to ensure that liability for payroll tax credits belongs with the entity who benefits from the claim. While the legislative process in Washington is rarely linear, we remain focused on growing support and moving the legislation across the finish line.

We also have a lot of irons in the fire in state capitals across the country. Our efforts to pass legislation in Maryland to permit PEOs to sponsor large group health plans continue as we begin a comprehensive public affairs campaign this summer to lay an important foundation as we move into the 2027 legislative session. Legislation in Massachusetts to codify this existing practice in the Bay State is close to passage, and we are optimistic it will become law soon. Further, we prevented harmful legislation from passing in Kansas and Louisiana.

In addition to our advocacy work, we are actively evaluating how we can modernize event programming and create opportunities for new industry voices. In April, more than 30 PEO c-suite leaders attended the CEO Retreat (a new take on the CEO Forum events series). The event provided a forum for industry leaders to think through systemic challenges—like AI and healthcare—affecting the industry.

We continue to enhance the professional development opportunities available through NextGen and WIN. Each of these communities offer opportunities for new industry members to connect and learn from PEO veterans. Our 2026 NextGen Leaders Class was announced in April, and the group has already embraced the initiative by participating in PEO Advocacy Day meetings.

Lastly, planning for NAPEO’s Annual Conference and Marketplace (September 16-18, Marco Island, FL) is in full swing. I’m confident it will be NAPEO’s strongest conference yet!

All the progress we have made this year reflects the strength of our strategic plan and the alignment of our membership behind it. The four pillars guiding our work aren’t just concepts on paper — they are actively shaping the decisions, investments and initiatives driving our industry forward.

I remain incredibly optimistic about where our industry is headed; now it’s time to finish strong.