Bill Text: MI SB1038 | 2009-2010 | 95th Legislature | Engrossed
Bill Title: Employment security; reports; the Michigan employment security act requirements; revise to implement the new professional employer organization regulatory act. Amends 1936 (Ex Sess) PA 1 (MCL 421.1 - 421.75) by adding sec. 13m. TIE BAR WITH: SB 1037'09
Spectrum: Slight Partisan Bill (Republican 2-1)
Status: (Passed) 2010-12-29 - Assigned Pa 0383'10 With Immediate Effect [SB1038 Detail]
Download: Michigan-2009-SB1038-Engrossed.html
SB-1038, As Passed House, December 15, 2010
HOUSE SUBSTITUTE FOR
SENATE BILL NO. 1038
A bill to amend 1936 (Ex Sess) PA 1, entitled
"Michigan employment security act,"
(MCL 421.1 to 421.75) by adding section 13m.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 13m. (1) A professional employer organization that has
not previously filed shall file a report with the agency in
accordance with R 421.121 and R 421.190 of the Michigan
administrative code for a determination of its status as a liable
employing unit and employer under this act. A PEO determined to be
a liable employer shall complete an electronic employer
registration in the manner approved by the agency to register its
employer liability.
(2) Except as provided in subdivision (b), a PEO that is a
liable employer shall use the following method for reporting wages
and paying unemployment contributions under this act:
(a) The PEO shall comply with all requirements of this act
that apply to a contributing employer. The PEO shall file a single
quarterly wage report and unemployment contribution report and pay
contributions of its client employers based on the account
information of each client employer. The unemployment agency shall
convert a reimbursing employer to a contributing employer beginning
with the calendar quarter in which the employer becomes a client
employer of a PEO. The PEO shall file reports required under R
421.121 of the Michigan administrative code and make contribution
payments by electronic reporting and payment methods approved by
the agency. The PEO shall notify the agency within 30 days after
any employer becomes its client employer and within 30 days after
any client employer discontinues its association with the PEO. All
of the following apply to a rate calculation for client employers
of the PEO:
(i) For a client employer that is a contributing employer and
was a client employer of the PEO on the date that the PEO changed
to the reporting method provided in this subdivision, the following
rates apply:
(A) Except as provided in sub-subparagraphs (B) and (C), if
the client employer reported no employees or no payroll to the
agency for 8 or more quarters, the client employer's unemployment
tax rate will be the new employer tax rate.
(B) If the client employer was a client employer of the PEO
for less than 8 full calendar quarters, the client employer's
unemployment tax rate will be based on the client employer's prior
account and experience.
(C) If the client employer's account has been terminated for
more than 1 year or if the client employer never previously
registered with the agency, the client shall be separately
registered using a method approved by the agency within 30 days
after the employer becomes a client employer of the PEO. The client
employer shall be assigned the new employer unemployment tax rate.
(ii) A business entity that is a contributing employer and
becomes a client employer of the PEO on or after January 1, 2011
shall retain its existing unemployment tax rate or establish a new
rate as provided in section 19.
(b) A PEO that is a liable employer and that was operating in
this state before January 1, 2011 may elect and use the reporting
method in subdivision (a) before January 1, 2014, but shall report
using the method in subdivision (a) on and after January 1, 2014.
(3) A PEO that is a liable employer is the employer for
purposes of claims management and hearings under this act on behalf
of the client employer.
(4) A PEO that reports under subsection (2)(a) shall confirm
the mailing address of the client employer, which may be stated as
that of the PEO or of the client employer. The PEO shall disclose
the business address of the client employer, which shall be the
physical address of the client employer, to the agency.
(5) Either the PEO that reports under subsection (2)(a) or the
PEO's client employers, but not both, shall file a quarterly wage
detail report electronically, and shall file a quarterly
contribution payment in a manner approved by the agency.
(6) The agency shall issue a FUTA certification in accordance
with the internal revenue code of 1986, 26 USC 1 to 9834, and
regulations, rulings, instructions, and directives of the internal
revenue service.
(7) The requirements of this section do not preclude the
agency from enforcing any provision of this act based on any act or
omission by a PEO that occurred before January 1, 2011.
(8) As used in this section, "professional employer
organization" or "PEO" means that term as defined in R
421.190(1)(d) of the Michigan administrative code.
Enacting section 1. This amendatory act takes effect January
1, 2011.
Enacting section 2. This amendatory act does not take effect
unless Senate Bill No. 1037 of the 95th Legislature is enacted into
law.
