Ohio’s new professional-employer law takes effect Sept. 17: What workers and businesses should know

When a Dublin worker opens a pay stub and sees one company’s name on the paperwork while reporting each day to another, the practical question is simple: If the job ends, whose unemployment account covers the worker?

Starting Sept. 17, 2026, Senate Bill 263 will change unemployment-compensation reporting for businesses that share workers with professional employer organizations, or PEOs. A PEO will be able to elect to put a client business’s shared employees under its own unemployment account and experience rate under Ohio Revised Code Section 4141.24. The option is not automatic, so Dublin-area employers should confirm in writing who will handle employment records, unemployment coverage, quarterly filings and claim questions.

Gov. Mike DeWine signed the bill June 18. State Sen. Kristina D. Roegner, the Senate District 27 Republican who sponsored the bill, described it this way in a Senate news release: “Senate Bill 263 helps modernize Ohio’s unemployment reporting system by allowing professional employer organizations to file a single consolidated report for the businesses they support, rather than potentially hundreds per quarter.”

PEO or temporary staffing?

Under Ohio Revised Code Section 4125.01, a PEO enters an agreement with a client employer to coemploy all or part of the client’s workforce at its worksite. The two businesses share employer responsibilities and liabilities, although the client generally remains the workplace the employee reports to each day.

That is different from an ordinary temporary-staffing assignment. A shared employee under a PEO arrangement is intended for permanent assignment with the client employer, rather than brought in as a temporary addition to its workforce. The bill’s rules therefore do not cover every worker placed through a staffing agency.

Workers who are unsure which arrangement they have should check pay stubs and onboarding paperwork for the names of both businesses and terms such as “PEO,” “client employer” or “coemployment.” They can then ask whether their assignment is temporary or whether they are coemployed under a PEO agreement.

How reporting will work

To use the new option, a PEO must notify the director of the Ohio Department of Job and Family Services that it will report shared employees under its own unemployment account and experience rate.

The change also allows qualifying groups of two or more commonly owned or controlled PEOs to file through a “PEO reporting entity.” A local business whose provider uses several related PEOs should ask which legal entity and unemployment account will appear in the state’s system.

For unemployment wage and contribution reporting, Ohio will recognize the PEO or reporting entity as the employer of record. That designation is limited to that reporting function: It does not end the coemployment relationship or remove the responsibilities shared by the PEO and client business.

“By cutting unnecessary paperwork and red tape, this legislation lets employers focus on running their businesses while maintaining full accountability in our unemployment system,” Roegner said.

For the initial election, the bill requires the PEO or reporting entity to ensure the state receives notice within 60 days after Sept. 17. That puts the end of the initial notice period on Nov. 16, 2026.

Payroll managers should also keep the regular quarterly calendar in view. Under Ohio Administrative Code Rule 4141-11-01, contributory employers generally must file unemployment wage and contribution reports by the last day of the month following each calendar quarter. The Ohio Department of Job and Family Services’ tax guidance for new employers lists those deadlines as April 30, July 31, Oct. 31 and Jan. 31.

What to confirm now

Workers whose employment paperwork runs through a PEO should identify both the client employer at the worksite and the PEO. If the PEO makes the election, that organization may be the employer of record for unemployment reporting even while the client remains the day-to-day workplace employer.

Workers should keep pay stubs, onboarding paperwork, W-2s and any separation notices. If a job ends, those records can help identify both employers when asking who reported the wages and who should answer unemployment-claim questions.

Small businesses and payroll managers on either the Franklin or Delaware County side of Dublin should get written answers from their PEO to four questions:

• Will the PEO make the new election?
• Which unemployment account and experience rate will cover shared employees?
• Which party will maintain employment records and handle wage reports, contributions and claim questions?
• Will the filing come from the PEO itself or a related reporting entity?

Businesses that become liable for unemployment contributions can use the Ohio Department of Job and Family Services’ employer-obligations guidance. It directs employers to report that liability through the state’s ERIC system or by filing Form JFS 20100 with the agency’s Contribution Section.

If the worksite employer and PEO give conflicting answers, workers and businesses should take both company names and the relevant paperwork to the Ohio Department of Job and Family Services’ unemployment program. By Sept. 17, a coemployed worker should be able to get one clear answer about who holds the unemployment account — not discover the disagreement only after a job ends.