Gusto rolls out new offerings to address compliance pain points for small businesses

Sponsored by

The cost of noncompliance. Onboarding oversights aren’t just administrative noise: A single compliance slipup carries an immediate penalty ranging from $288 to $2,861 per individual form. Equifax’s article breaks down what you need to know about redefined I-9 violations and higher penalty risks for employers. Learn more.

Gusto is rolling out a slew of new features, including its own professional employer organization (PEO), to better support small businesses’ compliance needs.

The announcement comes six months after the payroll and HR platform announced it would acquire Mosey, an AI-powered startup tailored to help small businesses with compliance, particularly if they hire out of state.

Gusto’s new compliance tool, called Gusto Business Compliance, is one of the fruits of that acquisition. It includes features that assist with obligations such as state tax registration, tracking government mail, and filing initial and annual reports to Secretaries of State.

There’s no shortage of entrepreneurs seeking to start their own businesses today. The number of Americans looking to start their own businesses grew precipitously following the pandemic, with applications rising from 3.5 million in 2018 to 5.5 million in 2023, according to the Census Bureau. New business applications hit a new high in 2025, at 5.6 million, as AI advancements spurred more entrepreneurs to take the leap.

But the ever-evolving legal landscape makes it difficult for small businesses to thrive, Gusto contends. In an Oct. 1 press release detailing the new offerings, Gusto pointed to a 2024 US Chamber of Commerce survey that found more than one-half (51%) of small businesses said navigating regulatory compliance requirements was hindering their growth.

“The US, I joke, is more like 50 countries sometimes than one country,” Gusto CEO and co-founder Josh Reeves said. “If Gusto can be the in-between, and we can go do a bunch of those things for the customer, that saves them a ton of time.”

Keeping on top of mail is one example of a time-consuming process where Gusto believes it can serve as a middleman between small businesses and the government. With the new compliance tool, small businesses can set up government mail to go through a digitized system that routes certain action items, like tax-related notices, to the Gusto team.

“It’s about building these systems that help you on an ongoing basis stay compliant,” Alex Kehayias, who founded Mosey and now heads up Gusto Business Compliance, said. Kehayias, who founded several companies himself, added, “the business owner didn’t start their business because they wanted to become a compliance expert. They want to run their business. They want to grow their business.” These offerings, he said, are designed to “enable them to go do more of that.”

Will small businesses owners trust an entity like Gusto to handle sensitive mail that comes from the government? Reeves believes so, given that small businesses have been entrusting the company with sensitive information—from employee identification numbers to company bank numbers—since it was founded in 2012.

In addition to Gusto Business Compliance, the company is also rolling out a feature that pairs customers with senior HR leaders who can advise on sensitive issues, such as harassment claims, complex terminations, or safety-related issues. It’s also introducing its own PEO, which is intended for customers with more complex HR needs, such as a desire for more premium health insurance.

The hope is that these new offerings will still prove cost-effective for customers whose margins tend to be slim. While Gusto didn’t share pricing details for its PEO or the HR Partners program, Business Compliance will be available as an $85 add-on (per state, per month) for customers on its “simple” or “plus” plans.

With the launch of its PEO, Gusto is entering a crowded market, with more than 500 vendors operating in the US. Some 14% of all employers with 20 to 499 workers use a PEO, according to the National Association of PEOs. Reeves said Gusto hopes to set itself apart by prioritizing “accuracy, reliability…speed of response.” He added that Gusto hopes to tap already-existing customers, “so the migration, the setup will be very seamless, easier than shifting to any external third-party PEO.”