SS/SCS/SB 600 - This act establishes new provisions for the regulation of professional employer organizations.REGISTRATION OF PEOs
Under this act, no person is permitted to provide, advertise, or otherwise hold itself out as providing professional employer services unless such person is registered with the Secretary of State. PEOs may register individually or as a group . PEOs may further apply for limited registration. A PEO is eligible for limited registration if it is domiciled outside the state, licensed as a PEO in another state, does not maintain an office in this state or directly solicit clients in this state, and does not have more than 50 employees employed or domiciled in this state on any given day.
The Secretary of State shall maintain a list of PEOs registered in this state. The Secretary is permitted to produce forms to be used for registration but shall permit the acceptance of electronic filings by either the PEO or an independent organization authorized by the PEO to act on behalf of a PEO.
PEOs shall pay an initial registration fee not to exceed $500 with an annual renewal fee not exceed $250. PEOs seeking limited registration shall pay an initial and annual registration fee not to exceed $250. The Secretary may determine a lower fee to be paid by a PEO. The Secretary shall determine a fee to be paid by PEO groups. No fee shall exceed the amount reasonably necessary for the administration of the act.
REQUIREMENTS OF PEOs AND CLIENTS OF PEOs
Each PEO or PEO group shall maintain either positive working capital or provide a bond, irrevocable letter of credit, or securities with a minimum market value equaling the deficiency plus one hundred thousand dollars to the Secretary of State. PEOs seeking limited registration are not required to meet these requirements.
The act establishes the conditions under which a client and a PEO may enter into a professional employment agreement as well as the rights and responsibilities of each party under such agreement.
WORKERS' COMPENSATION COVERAGE
The responsibility to obtain workers' compensation coverage shall be specifically allocated in the professional employer agreement to either the PEO or the client.
If the coemployment relationship between a PEO and a client is terminated, the client shall utilize an experience modification rating that reflects its individual experience. The PEO shall provide a client its workers' compensation information within 5 business days of receiving or giving notice that the relationship has been terminated.
A client may request its workers' compensation information at any time and the PEO shall provide such information to the client within 5 business days of receiving such request. Such information shall also be provided to any future client insurer if requested by such client.
A client is additionally required to provide prospective insurers with its workers' compensation information upon receiving such information from the PEO. A client is further required to disclose to a prospective insurer its current or previous relationship with a PEO. Violation of either of these provisions is subject to a Class A misdemeanor.
If a third party requests verification of a client's experience modification factor for a client in certain types of insurance policies from a PEO, the PEO shall, within five business days of receipt of receiving the client's consent, provide the information to the third party. If the client refuses to grant consent to a request for information, the PEO shall notify the requesting third party that the client has refused to consent to the disclosure of the information.
PENALTIES
Persons may be sanctioned by the Secretary of State for violating provisions of this act. Such sanctions may include revocation of license or the imposition of an administrative penalty of not more than $1,000, among other potential penalties.
This act is identical to provisions in the truly agreed to CCS/SS/SCS/HB 1719 (2018), SS/SB 666 (2018), HCS/SCS/SB 846 (2018), and HCS/HBs 1656 & 2075 (2018). The act is substantially similar to SCS/SB 266 (2017), HB 1154 (2017), HB 1196 (2017), HB 1198 (2017), SCS/SB 877 (2016), HB 1703 (2016), and HB 2203 (2014).
SCOTT SVAGERA