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| PRIOR PRINTER'S NO. 1235 | PRINTER'S NO. 1689 |
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| THE GENERAL ASSEMBLY OF PENNSYLVANIA |
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| SENATE BILL |
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| INTRODUCED BY BROWNE, PIPPY, RAFFERTY, McILHINNEY, TOMLINSON, FOLMER, BREWSTER, FARNESE, STACK AND BLAKE, MAY 16, 2011 |
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| SENATOR GORDNER, LABOR AND INDUSTRY, AS AMENDED, OCTOBER 18, 2011 |
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| AN ACT |
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1 | Providing for the registration and regulation of professional |
2 | employer organizations and for powers and duties of the |
3 | Department of Labor and Industry State; and imposing | <-- |
4 | penalties. |
5 | The General Assembly of the Commonwealth of Pennsylvania |
6 | hereby enacts as follows: |
7 | CHAPTER 1 |
8 | PRELIMINARY PROVISIONS |
9 | Section 101. Short title. |
10 | This act shall be known and may be cited as the Professional |
11 | Employer Organization Registration and Recognition Act. |
12 | Section 102. Definitions. |
13 | The following words and phrases when used in this act shall |
14 | have the meanings given to them in this section unless the |
15 | context clearly indicates otherwise: |
16 | "Administrative fee." The fee charged to a client by a |
17 | professional employer organization for professional employer |
18 | services. The administrative fee shall not be deemed to include |
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1 | any amount of a fee by the professional employer organization |
2 | that is for wages and salaries, benefits, workers' compensation, |
3 | payroll taxes, withholding or other assessment paid by the |
4 | professional employer organization to or on behalf of covered |
5 | employees under the professional employer agreement. |
6 | "Client." Any person who enters into a professional employer |
7 | agreement with a professional employer organization. |
8 | "Coemployer." A professional employer organization or |
9 | client. |
10 | "Coemployment relationship." A relationship which is |
11 | intended to be an ongoing relationship rather than a temporary |
12 | or project specific one, wherein the rights, duties and |
13 | obligations of an employer which arise out of an employment |
14 | relationship have been allocated between coemployers pursuant to |
15 | a professional employer agreement and this act. |
16 | "Controlling person." A person that owns, directly or |
17 | indirectly, 10% or more of the equity interest in a professional |
18 | employer organization. |
19 | "Covered employee." An individual coemployed by a |
20 | professional employer organization and a client who meets the |
21 | following criteria: |
22 | (1) The individual has received written notice of co- |
23 | employment with the professional employer organization. |
24 | (2) The individual's coemployment relationship is |
25 | pursuant to a professional employer agreement subject to this |
26 | act. |
27 | Subject to section 504, individuals who are officers, directors, |
28 | shareholders, partners and managers of the client and who are |
29 | operational managers or perform day-to-day operational services |
30 | for the client are covered employees only to the extent that the |
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1 | client and the professional employer organization expressly |
2 | agree in the professional employer agreement. |
3 | "Department." The Department of Labor and Industry State of | <-- |
4 | the Commonwealth. |
5 | "Direct hire employee." An individual who is an employee of |
6 | either the client or the PEO within the meaning of the act of |
7 | June 2, 1915 (P.L.736, No.338), known as the Workers' |
8 | Compensation Act, and who is not a covered employee. |
9 | "Insurer." A legal entity authorized or licensed to transact |
10 | insurance business in accordance with the laws of this |
11 | Commonwealth. |
12 | "Licensed producer." An individual or business entity that |
13 | is licensed as an insurance producer by the Insurance Department |
14 | in accordance with the provisions of Article VI-A of the act of |
15 | May 17, 1921 (P.L.789, No.285), known as The Insurance |
16 | Department Act of 1921. |
17 | "Master policy basis." An agreement under which a single |
18 | workers' compensation policy issued to the professional employer |
19 | organization provides coverage for more than one client and may |
20 | provide coverage to the professional employer organization with |
21 | respect to its direct hire employees. Two or more clients that |
22 | are insured under the same policy solely because they are under |
23 | common ownership are considered a single client for purposes of |
24 | this definition. |
25 | "Multiple coordinated policy basis." An agreement under |
26 | which a separate workers' compensation policy is issued to the |
27 | professional employer organization on behalf of each client or |
28 | group of affiliated clients with payment obligations and certain |
29 | policy communications related to such workers' compensation |
30 | policy coordinated through the professional employer |
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1 | organization. |
2 | "PEO group." Two or more professional employer organizations |
3 | that are majority owned or commonly controlled by the same |
4 | entity, parent or controlling person. |
5 | "Person." Any individual, partnership, corporation, limited |
6 | liability company, association or any other form of legally |
7 | recognized entity. |
8 | "Professional employer agreement." A contract by and between |
9 | a client and a professional employer organization that provides: |
10 | (1) for the coemployment of covered employees; |
11 | (2) for the allocation of employer rights and |
12 | obligations between the client and the professional employer |
13 | organization with respect to the covered employees; and |
14 | (3) that the professional employer organization and the |
15 | client assume the responsibilities required by this act. |
16 | "Professional employer organization" or "PEO." Any person |
17 | engaged in the business of providing professional employer |
18 | services. |
19 | "Professional employer services." The business of entering |
20 | into coemployment relationships under this act. |
21 | "Registrant." A professional employer organization |
22 | registered under this act. |
23 | "Secretary." The Secretary of Labor and Industry State of | <-- |
24 | the Commonwealth. |
25 | "Temporary help services." Services consisting of a person: |
26 | (1) recruiting and hiring its own employees; |
27 | (2) finding other organizations that need the services |
28 | of those employees; |
29 | (3) assigning those employees to perform work at or |
30 | services for the other organizations to support or supplement |
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1 | the other organizations' work forces, or to provide |
2 | assistance in special work situations, including, but not |
3 | limited to, employee absences, skill shortages, seasonal |
4 | workloads or to perform special assignments or projects; and |
5 | (4) customarily attempting to reassign the employees to |
6 | other organizations when they finish each assignment. |
7 | Section 103. Scope. |
8 | A person engaged in the business of providing professional |
9 | employer services shall be subject to registration and |
10 | regulation under this act regardless of its use of the term or |
11 | conducting business as a professional employer organization, |
12 | PEO, staff leasing company, registered staff leasing company, |
13 | employee leasing company, administrative employer or any other |
14 | name. The following shall not be deemed to be professional |
15 | employer organizations or the providing of professional |
16 | employment services for purposes of this act: |
17 | (1) Arrangements wherein a person, whose principal |
18 | business activity is not entering into professional employer |
19 | arrangements and which does not hold itself out as a PEO, |
20 | shares employees with a commonly owned company within the |
21 | meaning of section 414(b) and (c) of the Internal Revenue |
22 | Code of 1986 (Public Law 99-514, 26 U.S.C. § 1 et seq.). |
23 | (2) Independent contractor arrangements. |
24 | (3) Providing temporary help services. |
25 | Section 104. Construction. |
26 | (a) Collective bargaining agreements.--Nothing contained in |
27 | this act or in any professional employer agreement shall affect, |
28 | modify or amend any existing collective bargaining agreement, |
29 | specifically limit or affect any future collective bargaining |
30 | agreement, or affect, modify or amend any rights or obligations |
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1 | of any client, PEO or covered employee under the National Labor |
2 | Relations Act (49 Stat. 449, 29 U.S.C. § 151 et seq.), the |
3 | Railway Labor Act (Public Law 69-257, 44 Stat. 577) or the act |
4 | of June 1, 1937 (P.L.1168, No.294), known as the Pennsylvania |
5 | Labor Relations Act. For purposes of determining the number of |
6 | workers for existing and prospective collective bargaining |
7 | agreements, each client shall be treated as employing its direct |
8 | hire employees and only those covered employees coemployed by |
9 | the client. |
10 | (b) Employment arrangements.--Nothing in this act or in any |
11 | professional employer agreement shall: |
12 | (1) Diminish, abolish or remove rights of covered |
13 | employees of a client or obligations of such client to a |
14 | covered employee existing prior to the effective date of the |
15 | professional employer agreement. |
16 | (2) Affect, modify or amend any contractual relationship |
17 | or restrictive covenant between a covered employee and any |
18 | client in effect at the time a professional employer |
19 | agreement becomes effective, nor shall it prohibit or amend |
20 | any contractual relationship or restrictive covenant that is |
21 | entered into subsequently between a client and a covered |
22 | employee. A PEO shall have no responsibility or liability in |
23 | connection with, or arising out of, any existing or new |
24 | contractual relationship or restrictive covenant unless the |
25 | PEO has specifically agreed otherwise in writing. |
26 | (3) Eliminate any right otherwise existing in law, |
27 | except as provided in this act. |
28 | (4) Create any right or cause of action not otherwise |
29 | existing in law except as specifically set forth in the |
30 | professional employer agreement or this act. |
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1 | (c) Licensing.--Nothing contained in this act or any |
2 | professional employer agreement shall affect, modify or amend |
3 | any Federal, State or local licensing, registration or |
4 | certification requirement applicable to any client or covered |
5 | employee. The following apply: |
6 | (1) A covered employee who must be licensed, registered |
7 | or certified according to law or regulation is deemed solely |
8 | an employee of the client for purposes of the license, |
9 | registration or certification requirement. |
10 | (2) A PEO shall not be deemed to engage in any |
11 | occupation, trade, profession or other activity that is |
12 | subject to licensing, registration or certification |
13 | requirements, or is otherwise regulated by a governmental |
14 | entity, solely by entering into and maintaining a |
15 | coemployment relationship with a covered employee who is |
16 | subject to such requirements or regulation. |
17 | (3) A client shall have the sole right of direction and |
18 | control of the professional or licensed activities of covered |
19 | employees and of the client's business. Covered employees and |
20 | clients shall remain subject to regulation by the regulatory |
21 | or governmental entity responsible for licensing, |
22 | registration or certification of the covered employees or |
23 | clients. |
24 | (d) Tax credits and other incentives.--For purposes of |
25 | determination of tax credits and other economic incentives |
26 | provided by the Commonwealth or other government entity and |
27 | based on employment, covered employees shall be deemed employees |
28 | solely of the client. A client shall be entitled to the benefit |
29 | of any tax credit, economic incentive or other benefit arising |
30 | as the result of the employment of covered employees of the |
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1 | client. If the grant or amount of any incentive is based on the |
2 | number of employees, then each client shall be treated as |
3 | employing its direct hire employees and those covered employees |
4 | coemployed by the client. Covered employees working for other |
5 | clients of the PEO shall not be counted. Each PEO will provide, |
6 | upon request by a client or an agency or department of the |
7 | Commonwealth, employment information reasonably required by any |
8 | agency or department of the Commonwealth responsible for |
9 | administration of a tax credit or economic incentive and |
10 | necessary to support any request, claim, application or other |
11 | action by a client seeking the tax credit or economic incentive. |
12 | (e) Disadvantaged business.--With respect to a bid, |
13 | contract, purchase order or agreement entered into with the |
14 | Commonwealth or a political subdivision of the Commonwealth, a |
15 | client company's status or certification as a small, minority- |
16 | owned, disadvantaged or woman-owned business enterprise or as a |
17 | historically underutilized business is not affected because the |
18 | client company has entered into an agreement with a PEO or uses |
19 | the services of a PEO. |
20 | (f) Other entity as employer.--Nothing in this act shall be |
21 | construed to designate any entity other than the client as the |
22 | employer of any employee performing services for or on its |
23 | behalf while employed directly or indirectly by a PEO for any |
24 | purposes other than those specifically designated in this act. |
25 | Persons performing services for or on behalf of a client shall |
26 | be deemed to be employees of the client for all purposes other |
27 | than those specifically designated in this act where persons may |
28 | be considered employees of a PEO. |
29 | CHAPTER 3 |
30 | REGISTRATION |
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1 | Section 301. Registration. |
2 | (a) Registration requirements.--The department shall |
3 | register a PEO or PEO group only if the PEO or the PEO group |
4 | meets all requirements of this act. A PEO seeking limited |
5 | registration pursuant to subsection (e) shall provide the |
6 | department with information and documentation necessary to show |
7 | that the PEO qualifies for limited registration. |
8 | (b) Registration information.--An application for |
9 | registration shall include the following information: |
10 | (1) The name or names under which the PEO or the PEO |
11 | group members conduct business and the legal name. |
12 | (2) The address of the principal place of business of |
13 | the PEO or the PEO group members and the address of each |
14 | office maintained in this Commonwealth. |
15 | (3) The taxpayer or employer identification number of |
16 | the PEO or the PEO group members. |
17 | (4) A list by state of each name under which the PEO or |
18 | the PEO group members has operated in the preceding five |
19 | years, including any alternative names, names of predecessors |
20 | and, if known, successor business entities. |
21 | (5) A statement of ownership, which shall include the |
22 | name and evidence of the business experience of any |
23 | controlling person. |
24 | (6) A statement of management, which shall include the |
25 | name and evidence of the business experience of any person |
26 | who serves as president, chief executive officer or otherwise |
27 | has the authority to act as senior executive officer of the |
28 | PEO or PEO group member. |
29 | (7) A financial statement that sets forth the financial |
30 | condition of the PEO or PEO group and meets the following |
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1 | requirements: |
2 | (i) The financial statement shall be prepared in |
3 | accordance with generally accepted accounting principles. |
4 | (ii) The financial statement shall be audited by an |
5 | independent certified public accountant licensed to |
6 | practice in the jurisdiction in which the accountant is |
7 | located and shall be without qualification as to the |
8 | going concern status of the PEO. A PEO or PEO group may |
9 | submit a combined or consolidated audited financial |
10 | statement to meet the requirements of this subparagraph. |
11 | (iii) The financial statement shall cover the PEO or |
12 | PEO group's most recent fiscal year. If a financial |
13 | statement for the most recent fiscal year is not |
14 | available at the time the application is filed, the |
15 | department may grant the PEO or PEO group an extension of |
16 | time to submit the financial statement, allow the PEO or |
17 | PEO group to submit the immediately preceding financial |
18 | statement or, if the PEO or PEO group does not have |
19 | sufficient operating history to have a financial |
20 | statement for a complete fiscal year, allow the PEO or |
21 | PEO group to submit a financial statement for a shorter |
22 | period of time that is reviewed by a certified public |
23 | accountant. |
24 | (8) The provisions of the professional employer |
25 | agreements in use or that will be used by the PEO or PEO |
26 | group in this Commonwealth. |
27 | (9) A complete list of current clients with covered |
28 | employees who perform services within this Commonwealth at |
29 | the time of registration. |
30 | (10) Evidence of current workers' compensation insurance |
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1 | policies issued to or through the PEO insuring covered |
2 | employees located in this Commonwealth. |
3 | (11) Designation of a registered agent for acceptance of |
4 | service of process in this Commonwealth. |
5 | (12) All additional information required by the |
6 | department to demonstrate that the PEO or PEO group meets the |
7 | requirements for the applicable registration. |
8 | (c) Timely application and duration of registration.-- |
9 | (1) An initial registration, if granted by the |
10 | department, shall be effective through the end of the |
11 | calendar year following the year in which the application for |
12 | registration is filed with the department. All other |
13 | registrations shall be effective for 12 months from the |
14 | effective date indicated by the department. |
15 | (i) Each PEO or PEO group operating within this |
16 | Commonwealth as of the effective date of this act shall |
17 | file its application for initial registration no later |
18 | than 30 days after the effective date of this act. |
19 | (ii) Each PEO not operating within this Commonwealth |
20 | as of the effective date of this act shall receive its |
21 | initial registration prior to commencement of operations |
22 | within this Commonwealth. |
23 | (2) A PEO or PEO group that will continue its operations |
24 | beyond the termination of its initial registration or its |
25 | most recent renewal registration shall file an application to |
26 | renew its registration with the department no later than 90 |
27 | days before the end of the current registration. If a timely |
28 | application for renewal is filed, the current registration |
29 | shall remain effective until the department grants or denies |
30 | the application for renewal. |
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1 | (d) PEO group registration.--PEOs in a PEO group may satisfy |
2 | the application, reporting and financial requirements of this |
3 | act on a combined or consolidated basis, provided that each |
4 | member of the PEO group guarantees the obligations under this |
5 | act of each other member of the PEO group. In the case of a PEO |
6 | group that submits a combined or consolidated audited financial |
7 | statement, including entities that are not PEOs or that are not |
8 | in the PEO group, a controlling person of the PEO group under |
9 | the consolidated or combined statement must guarantee the |
10 | obligations of the PEOs in the PEO group. |
11 | (e) Limited registration.-- |
12 | (1) A PEO or PEO group is eligible for a limited |
13 | registration under this act if the PEO or PEO group meets the |
14 | following: |
15 | (i) Is domiciled outside this Commonwealth and is |
16 | licensed or registered as a PEO or PEO group in another |
17 | jurisdiction having PEO registration or licensing |
18 | requirements, including those related to financial |
19 | capability as set forth in section 303, that, in the |
20 | estimation of the department, are at least as stringent |
21 | as those set forth in this act. |
22 | (ii) Does not maintain an office in this |
23 | Commonwealth. |
24 | (iii) Does not directly solicit clients with covered |
25 | employees who may perform services within this |
26 | Commonwealth. |
27 | (iv) Does not have more than 50 covered employees |
28 | who may perform services in this Commonwealth on any |
29 | given day. |
30 | (2) Section 303 shall not apply to applicants for |
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1 | limited registration. |
2 | (f) List.--The department shall maintain a list of PEOs and |
3 | PEO groups registered under this act that is readily available |
4 | to the public by electronic or other means. |
5 | (g) Forms.--Applications for registration shall be made in |
6 | the manner prescribed by the department. The department may |
7 | prescribe forms necessary to promote the efficient |
8 | administration of this section. |
9 | (h) Electronic filing and compliance.--The department may to |
10 | the extent practical provide for the acceptance of electronic |
11 | filings in conformance with the act of December 16, 1999 |
12 | (P.L.971, No.69), known as the Electronic Transactions Act, |
13 | including applications, documents, reports and other filings |
14 | required by this act. The department may provide for the |
15 | acceptance of electronic filings and other assurance from an |
16 | independent and qualified assurance organization approved by the |
17 | department that provides satisfactory assurance of compliance |
18 | acceptable to the department in lieu of the requirements of this |
19 | section and section 303 and other requirements of this act or |
20 | the rules promulgated pursuant to this act. If the department |
21 | provides for the acceptance of electronic filings under this |
22 | section, a PEO or PEO group may authorize an assurance |
23 | organization, approved by the department, to act on the PEO's or |
24 | PEO group's behalf in complying with the registration |
25 | requirements of this act, including electronic filings of |
26 | information and payment of registration fees. Nothing in this |
27 | subsection shall limit or change the department's authority to |
28 | register or terminate registration of a PEO or PEO group or to |
29 | investigate or enforce any provision of this act. |
30 | (i) Record confidentiality.--All financial statements, any |
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1 | person's personal identifying information, employer |
2 | identification numbers, a Federal employment identification |
3 | number, provisions of the professional employer agreements and |
4 | client lists obtained by the department from a PEO or PEO group |
5 | under this act shall not be public records under the act of |
6 | February 14, 2008 (P.L.6, No.3), known as the Right-to-Know Law. |
7 | The department shall make available such personal identifying |
8 | information, employer identification numbers, a Federal |
9 | employment identification number, provisions of the professional |
10 | employer agreements and client lists obtained by the department |
11 | from a PEO or PEO group under this act to a rating organization |
12 | licensed pursuant to section 712(a) of the act of June 2, 1915 |
13 | (P.L.736, No.338), known as the Workers' Compensation Act, as |
14 | required to comply with that rating organization's statutory |
15 | obligations. Information obtained under this subsection shall |
16 | only be used by the rating organization to comply with those |
17 | statutory duties either prescribed under the Workers' |
18 | Compensation Act or required by the Insurance Department |
19 | pursuant to its statutory authority under the act of May 17, |
20 | 1921 (P.L.789, No.285), known as The Insurance Department Act of |
21 | 1921, or the act of May 17, 1921 (P.L.682, No.284), known as The |
22 | Insurance Company Law of 1921, and shall not be considered |
23 | public records under the Right-to-Know Law. |
24 | (j) Appeals.-- |
25 | (1) If the department denies an application for |
26 | registration or revokes a registration under section 701, the |
27 | PEO or PEO group may appeal the department's determination to |
28 | the secretary. The appeal must be received by the department |
29 | within 30 days after the date of the determination. |
30 | (2) An appeal of a determination by the department |
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1 | denying an application for a renewal registration or revoking |
2 | a registration shall operate as a supersedeas while the |
3 | appeal is pending. The effective date of a denial or |
4 | revocation subject to this subsection shall not be prior to |
5 | the expiration of the appeal period under paragraph (1). |
6 | (3) Proceedings under this section are subject to 2 |
7 | Pa.C.S. Ch. 5 Subch. A (relating to practice and procedure of |
8 | Commonwealth agencies) and Ch. 7 Subch. A (relating to |
9 | judicial review of Commonwealth agency action). |
10 | Section 302. Fees. |
11 | (a) Fees.--Except as provided in subsection (b), the | <-- |
12 | department shall charge the following fees for applications |
13 | under this act: |
14 | (1) Initial PEO registration, $500. |
15 | (2) Initial PEO group registration, $750. |
16 | (3) Renewal registration, $250. |
17 | (4) Limited registration, $250. |
18 | (b) Amended fees.--No less than 60 days after publishing |
19 | notice of an intent to revise fees in the Pennsylvania Bulletin, |
20 | the department may revise the fees to be charged under |
21 | subsection (a) or establish additional fees. Fees as revised or |
22 | established by the department shall not exceed amounts |
23 | reasonably necessary for the administration of this act. The |
24 | department shall retain the application fees for the purposes of |
25 | administering this act. |
26 | The department may promulgate rules and regulations | <-- |
27 | establishing fees for application and renewal under this act. No |
28 | fee shall exceed the actual amount necessary for the |
29 | administration of this act. Fees shall be retained by the |
30 | department only for the purposes of administering this act. |
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1 | Section 303. Financial capability. |
2 | (a) Working capital.--Except as provided in section 301(e), |
3 | each registrant shall maintain either: |
4 | (1) positive working capital at registration or renewal |
5 | as reflected in the financial statements provided under |
6 | section 301(b)(7); or |
7 | (2) if the registrant does not meet the requirement in |
8 | paragraph (1), the registrant shall provide one or more of |
9 | the instruments set forth in subsection (b) with a minimum |
10 | aggregate value sufficient to establish positive working |
11 | capital plus $100,000. The instruments shall secure payment |
12 | by the registrant of all taxes, wages, benefits or other |
13 | entitlements due to or with respect to covered employees if |
14 | the registrant fails to make payment when due. |
15 | (b) Instruments.--The following instruments may be |
16 | maintained to comply with subsection (a)(2): |
17 | (1) A surety bond on a form prescribed by the department |
18 | issued by an insurer authorized to transact surety business |
19 | in this Commonwealth by the Insurance Department. The |
20 | following shall apply: |
21 | (i) The surety company shall possess a current A.M. |
22 | Best Rating of B+ or better or a Standard and Poor's |
23 | rating of claims paying ability of A or better. |
24 | (ii) The PEO shall replace the bond with a new bond |
25 | issued by a surety company with an acceptable rating or |
26 | with another instrument under this subsection if the |
27 | surety company's rating falls below the acceptable rating |
28 | after the bond is issued. If the bond is not replaced |
29 | within 60 days, the department may draw on the surety |
30 | bond and deposit the proceeds with the State Treasurer to |
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1 | secure payment as set forth in subsection (a)(2). |
2 | (2) An instrument held under a trust agreement |
3 | prescribed by the department and maintained to secure payment |
4 | as set forth in subsection (a)(2). The following shall apply: |
5 | (i) The deposit shall consist of cash, bonds or |
6 | other evidence of indebtedness issued, assumed or |
7 | guaranteed by the United States of America or by an |
8 | agency or instrumentality of the United States; |
9 | investments in common funds or regulated investment |
10 | companies which invest primarily in Federal Government or |
11 | State government agency obligations; or bonds or other |
12 | security issued by the Commonwealth and backed by the |
13 | Commonwealth's full faith and credit. |
14 | (ii) The securities shall be held in a Commonwealth |
15 | chartered bank and trust company or trust company as |
16 | defined in section 102 of the act of November 30, 1965 |
17 | (P.L.847, No.356), known as the Banking Code of 1965, or |
18 | a federally chartered bank or foreign bank with a branch |
19 | office and trust powers in this Commonwealth. |
20 | (3) An irrevocable letter of credit using provisions |
21 | required by the department issued by and payable at a branch |
22 | office of a commercial bank located in the United States. The |
23 | letter of credit shall state that the terms of the letter of |
24 | credit automatically renew annually unless the letter of |
25 | credit is specifically nonrenewed by the issuing bank 60 days |
26 | or more prior to the anniversary date of its issuance. The |
27 | following shall apply: |
28 | (i) At the time of issuance of the letter of credit, |
29 | the issuing bank or its holding company shall have a B/C |
30 | or better rating or 2.5 or better score by Thomson |
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1 | BankWatch, or the issuing bank shall have a CD rating of |
2 | BBB or better by Standard & Poor's Corporation. |
3 | (ii) The registrant shall replace the letter of |
4 | credit with a new letter of credit issued by a bank with |
5 | an acceptable credit rating or with another acceptable |
6 | form of security if a bank's rating falls below the |
7 | acceptable rating after the letter of credit is issued. |
8 | If the letter of credit is not replaced within 60 days, |
9 | the department shall be entitled to draw on the letter of |
10 | credit and will deposit the proceeds to secure payment as |
11 | set forth in subsection (a)(2). |
12 | (iii) The registrant shall execute a trust agreement |
13 | on a form prescribed by the department with a |
14 | Commonwealth chartered bank and trust company or trust |
15 | company as defined in section 102 of the Banking Code of |
16 | 1965 or a federally chartered bank or foreign bank with a |
17 | branch office and trust powers in this Commonwealth. The |
18 | trust agreement must accommodate proceeds from a letter |
19 | of credit drawn on by the department. |
20 | (c) Certification.--Within 60 days after the end of each |
21 | calendar quarter, a registrant shall submit to the department a |
22 | certification by a senior manager that all applicable Federal, |
23 | State and local taxes and required insurance premiums have been |
24 | paid for all covered employees in this Commonwealth on a timely |
25 | basis for that quarter. |
26 | CHAPTER 5 |
27 | PEO DUTIES AND AGREEMENTS |
28 | Section 501. Duties and contractual relationship. |
29 | (a) Allocation of rights, duties and obligations.--Except as |
30 | specifically provided in this act, nothing in this act shall be |
|
1 | deemed to affect or alter any provision of Pennsylvania law. |
2 | Specifically: |
3 | (1) The client shall be entitled to exercise all rights, |
4 | and shall be obligated to perform all duties and |
5 | responsibilities, otherwise applicable to an employer in an |
6 | employment relationship. |
7 | (2) The PEO shall be entitled to exercise only those |
8 | rights, and obligated to perform only those duties and |
9 | responsibilities, specifically required by this act or set |
10 | forth in the professional employer agreement. The rights, |
11 | duties and obligations of the PEO as coemployer with respect |
12 | to any covered employee shall be limited to those arising |
13 | pursuant to the professional employer agreement and this act |
14 | during the term of coemployment by the PEO of the covered |
15 | employee. |
16 | (3) Unless otherwise expressly agreed by the PEO and the |
17 | client in a professional employer agreement, the client |
18 | retains the exclusive right to direct and control the covered |
19 | employees as is necessary to conduct the client's business, |
20 | to discharge any of client's fiduciary responsibilities or to |
21 | comply with any licensure requirements applicable to the |
22 | client or to the covered employees. |
23 | (b) Contractual relationship.--Except as provided by law, |
24 | the coemployment relationship between the client and the PEO, |
25 | and between each coemployer and each covered employee, shall be |
26 | governed by the professional employer agreement. The PEO shall |
27 | ensure that each professional employer agreement is reduced to |
28 | writing and signed by both the client and the PEO and each |
29 | professional employer agreement shall provide: |
30 | (1) The allocation of rights, duties and obligations as |
|
1 | described in subsection (a). |
2 | (2) That the PEO shall have responsibility to pay wages |
3 | to covered employees; to withhold, collect, report and remit |
4 | payroll-related taxes and may remit unemployment taxes in |
5 | accordance with section 504; and, to the extent the PEO has |
6 | assumed responsibility in the professional employer |
7 | agreement, to make payments for employee benefits for covered |
8 | employees. As used in this paragraph, the term "wages" does |
9 | not include any obligation between a client and a covered |
10 | employee for payments beyond or in addition to the covered |
11 | employee's salary, draw or regular rate of pay, such as |
12 | bonuses, commissions, severance pay, deferred compensation, |
13 | profit sharing or vacation, sick or other paid time off pay, |
14 | unless the PEO has expressly agreed to assume liability for |
15 | these payments in the professional employer agreement. |
16 | (3) Nothing in this act or in a professional employer | <-- |
17 | agreement shall relieve a client from compliance with the |
18 | Commonwealth's wage and labor laws, including the act of May |
19 | 13, 1915 (P.L.286, No.177), known as the Child Labor Law, the |
20 | act of August 15, 1961 (P.L.987, No.442), known as the |
21 | Pennsylvania Prevailing Wage Act, the act of July 14, 1961 |
22 | (P.L.637, No.329), known as the Wage Payment and Collection |
23 | Law, and the act of January 17, 1968 (P.L.11, No.5), known as |
24 | The Minimum Wage Act of 1968. If the client is a health care |
25 | facility as defined in section 2 of the act of October 9, |
26 | 2008 (P.L.1376, No.102), known as the Prohibition of |
27 | Excessive Overtime in Health Care Act, the client shall |
28 | comply with that act. No professional employer organization |
29 | shall knowingly engage in or assist in the violation of the |
30 | statutes referenced in this paragraph. |
|
1 | (4) That the PEO shall have a right to hire, discipline |
2 | and terminate a covered employee as may be necessary to |
3 | fulfill the PEO's responsibilities under this act and the |
4 | professional employer agreement. The client shall have a |
5 | right to hire, discipline and terminate a covered employee. |
6 | (5) The PEO or client has the responsibility to provide |
7 | workers' compensation coverage for covered employees, in |
8 | compliance with section 503, which responsibility shall be |
9 | specifically allocated in the professional employer agreement |
10 | to either the client or the PEO in accordance with section |
11 | 503(a). |
12 | (c) Notice to terminate.--With respect to each professional |
13 | employer agreement entered into by the PEO, the PEO shall |
14 | provide the procedures by which the client or PEO may terminate |
15 | the professional employer agreement, including any fees or costs |
16 | payable upon termination, and that except as otherwise expressly |
17 | provided or required by law, all services provided by the PEO to |
18 | the client shall cease immediately as of the effective date of |
19 | the termination. |
20 | (d) Notice to covered employees and clients.-- |
21 | (1) With respect to each professional employer agreement |
22 | entered into by a PEO, the PEO shall provide written notice |
23 | to each covered employee affected by the agreement of the |
24 | general nature of the coemployment relationship between and |
25 | among the PEO, the client and the covered employee. |
26 | (2) If the PEO is providing benefits to covered |
27 | employees pursuant to a PEO sponsored welfare benefit plan, |
28 | the PEO shall provide specific notice to the client as to |
29 | services provided by the PEO concerning those benefits. These |
30 | responsibilities include those related to administration, |
|
1 | which includes Consolidated Omnibus Budget Reconciliation Act |
2 | (COBRA) administration, plan administration, enrollment and |
3 | renewal services pursuant to their professional employer |
4 | agreement. The notice may be contained in the professional |
5 | employer agreement or in a separate notice. |
6 | (e) Specific responsibilities.--Except to the extent |
7 | otherwise expressly provided by the applicable professional |
8 | employer agreement: |
9 | (1) A client shall be solely responsible for the |
10 | quality, adequacy or safety of the goods or services produced |
11 | or sold in client's business. |
12 | (2) A client shall be solely responsible for directing, |
13 | supervising, training and controlling the work of the covered |
14 | employees with respect to the business activities of the |
15 | client and solely responsible for the acts, errors or |
16 | omissions of the covered employees with regard to these |
17 | activities. |
18 | (3) A client shall not be liable for the acts, errors or |
19 | omissions of a PEO or of any covered employee of the client |
20 | and a PEO when the covered employee is acting under the |
21 | express direction and control of the PEO. |
22 | (4) A PEO shall not be liable for the acts, errors or |
23 | omissions of a client or of any covered employee of the |
24 | client when the covered employee is acting under the express |
25 | direction and control of the client. |
26 | (5) Nothing in this subsection shall serve to limit any |
27 | contractual liability or obligation specifically provided in |
28 | the written professional employer agreement. |
29 | (6) A covered employee is not, solely as the result of |
30 | being a covered employee of a PEO, an employee of the PEO for |
|
1 | purposes of general liability insurance, fidelity bonds, |
2 | surety bonds, employer's liability which is not covered by |
3 | workers' compensation or liquor liability insurance carried |
4 | by the PEO unless the covered employee is included by |
5 | specific reference in the professional employer agreement and |
6 | applicable prearranged employment contract, insurance |
7 | contract or bond. |
8 | (f) Professional employer services not insurance.--A PEO |
9 | under this act is not engaged in the sale of insurance or in |
10 | acting as a third party administrator by offering, marketing, |
11 | selling, administering or providing professional employer |
12 | services which include services and employee benefit plans for |
13 | covered employees. |
14 | (g) Taxation.-- |
15 | (1) Covered employees whose services are subject to |
16 | sales tax shall be deemed the employees of the client for |
17 | purposes of collecting and levying sales tax on the services |
18 | performed by the covered employee. Nothing contained in this |
19 | act shall relieve a client of any sales tax liability with |
20 | respect to its goods or services. |
21 | (2) Any tax upon professional employer services or any |
22 | business license or other fee which is based upon gross |
23 | receipts shall be limited to the administrative fee of the |
24 | PEO. |
25 | (3) Any tax assessed on a per capita or per employee |
26 | basis shall be assessed against the client for covered |
27 | employees and against the PEO for its employees who are not |
28 | covered employees coemployed with a client. |
29 | (4) In the case of tax imposed or calculated upon the |
30 | basis of total payroll, the PEO shall be eligible to apply |
|
1 | any small business allowance or exemption available to the |
2 | client for the covered employees for purpose of computing the |
3 | tax. |
4 | Section 502. Benefit plans. |
5 | (a) Retirement and welfare benefit plans.--A client and a |
6 | PEO shall each be deemed an employer for purposes of sponsoring |
7 | retirement and welfare benefit plans for its covered employees. |
8 | (b) Construction.--A fully insured welfare benefit plan |
9 | offered to the covered employees of a single PEO shall be |
10 | considered for purposes of Commonwealth law and regulation to be |
11 | a single employer welfare benefit plan and shall not be |
12 | considered a multiple employer welfare arrangement. |
13 | (c) Insurance Company Law.--For purposes of section 621.2 of |
14 | the act of May 17, 1921 (P.L.682, No.284), known as The |
15 | Insurance Company Law of 1921, a PEO shall be considered the |
16 | employer of all of its covered employees, and all covered |
17 | employees of one or more clients participating in a health |
18 | benefit plan sponsored by a single PEO shall be considered |
19 | employees of the PEO. |
20 | (d) Plans not fully insured.--If a PEO offers to its covered |
21 | employees any health benefit plan which is not fully insured by |
22 | an insurer, the plan shall: |
23 | (1) Utilize a third-party administrator licensed to do |
24 | business in this Commonwealth. |
25 | (2) Hold all plan assets, including participant |
26 | contributions, in a trust account. |
27 | (3) Provide sound reserves as determined by an actuary |
28 | using generally accepted actuarial standards of practice. |
29 | (4) Provide written notice to each covered employee |
30 | participating in the benefit plan that the plan is self- |
|
1 | insured or is not fully insured. |
2 | (5) Provide written notice to the client of the amount | <-- |
3 | of any aggregate stop loss insurance. |
4 | Section 503. Workers' compensation. |
5 | (a) Requirement for coverage of covered employees.-- |
6 | (1) Both the PEO and the client shall be an employer of |
7 | covered employees assigned to the client for purposes of this |
8 | act and the act of June 2, 1915 (P.L.736, No.338), known as |
9 | the Workers' Compensation Act. |
10 | (2) The responsibility to provide workers' compensation |
11 | coverage for the covered employees shall be specifically |
12 | allocated in the professional employer agreement to either |
13 | the client or the PEO. |
14 | (3) When the responsibility to provide workers' |
15 | compensation coverage is specifically allocated in the |
16 | professional employer agreement to the PEO, the PEO must |
17 | elect to provide coverage for all covered employees assigned |
18 | to that client pursuant to subsection (b)(3), (4) or (5). |
19 | (4) When the responsibility to provide workers' |
20 | compensation coverage is specifically allocated in the |
21 | professional employer agreement to the client, the client |
22 | must provide coverage pursuant to subsection (b)(1) or (2). |
23 | (b) Methods of coverage.--A client and a registered PEO that |
24 | have entered into a professional employer agreement may meet |
25 | their statutory obligation under the Workers' Compensation Act |
26 | for coverage as employers for the covered employees by any of |
27 | the following: |
28 | (1) The client obtaining a standard workers' |
29 | compensation policy from an insurer authorized to provide |
30 | workers' compensation coverage covering the client's covered |
|
1 | employees. Separate experience modification, risk |
2 | classifications, merit rating adjustments, construction |
3 | classification premium adjustments or certified safety |
4 | committee program credits shall be applied to the exposures |
5 | of the client covered by a policy obtained under this |
6 | paragraph based on the client's entire Pennsylvania |
7 | operations notwithstanding coverage provided under additional |
8 | professional employer agreements pursuant to paragraphs (3), |
9 | (4) and (5). |
10 | (2) The client being approved by the department | <-- |
11 | Department of Labor and Industry to self-insure or group | <-- |
12 | self-insure its workers' compensation obligations for the |
13 | client's covered employees. |
14 | (3) The PEO purchasing workers' compensation insurance |
15 | on a multiple coordinated policy basis from an insurer |
16 | authorized to provide workers' compensation coverage to the |
17 | PEO and to the client with respect to the covered employees |
18 | assigned to the client. Each policy written on a multiple |
19 | coordinated policy basis shall be issued to the PEO as |
20 | primary named insured and must identify both the PEO and the |
21 | client as insureds. At the written request of the client, a | <-- |
22 | professional employer organization shall make available |
23 | evidence of workers' compensation coverage, loss history and |
24 | total wages paid for covered employees of the client. The |
25 | following apply: |
26 | (i) Separate experience data must be reported to the |
27 | licensed rating organization for workers' compensation |
28 | insurance for each multiple coordinated policy in a |
29 | format complying with requirements of the approved |
30 | statistical plan for workers' compensation coverage. |
|
1 | (ii) Risk classifications shall be assigned to each |
2 | client based on the totality of that client's |
3 | Pennsylvania operations regardless of whether workers |
4 | engaged therein are provided under one or more |
5 | professional employer agreements or are direct hire |
6 | employees of the client. |
7 | (iii) If applicable, separate experience |
8 | modification, merit rating adjustments, construction |
9 | classification premium adjustment or certified safety |
10 | committee program credits shall be applied to the |
11 | exposures of each client covered by a multiple |
12 | coordinated policy based on the client's entire |
13 | Pennsylvania operations whether coverage is being |
14 | provided for the client's exposures under the client's |
15 | own policy or on a master policy basis or multiple |
16 | coordinated policy basis under one or more professional |
17 | employer agreements, or some combination thereof. |
18 | (iv) Policies written in accordance with this |
19 | paragraph by the same insurer with the PEO as named |
20 | insured may be combinable for premium discount and other |
21 | purposes including a retrospective rating program or any |
22 | other approved pricing program. Such programs may be |
23 | based on the combined total standard premium and losses |
24 | of all such policies issued to the PEO as the primary |
25 | named insured. |
26 | (v) Nothing in this paragraph shall prohibit a |
27 | professional employer organization from participating in |
28 | a large deductible program, retrospective rating program |
29 | or any other rating program approved for and written |
30 | under a workers' compensation policy offered by an |
|
1 | insurer. Further, nothing in this paragraph shall |
2 | restrict an insurer from collecting workers' compensation |
3 | premium based on the totality of the exposure under these |
4 | multiple coordinated policies and applying rates and |
5 | discounts consistent with those approved for the insurer |
6 | pursuant to the rating program. |
7 | (4) The PEO being duly qualified and approved by the |
8 | department Department of Labor and Industry to self-insure | <-- |
9 | its workers' compensation obligations, including direct |
10 | employees and covered employees. |
11 | (5) The PEO purchasing workers' compensation insurance |
12 | on a master policy basis from an insurer authorized to |
13 | provide workers' compensation coverage. The insurer or |
14 | licensed producer shall provide a certificate of insurance |
15 | evidencing workers' compensation coverage to each client and |
16 | to the PEO with respect to the covered employees of that |
17 | client. The following apply: |
18 | (i) When coverage is provided under a master policy, |
19 | the insurer must report separate experience data to the |
20 | licensed rating organization for workers' compensation |
21 | insurance for each client insured within any master |
22 | policy in a format complying with the requirements of the |
23 | approved statistical plan for workers' compensation |
24 | coverage. |
25 | (ii) Risk classifications shall be assigned to each |
26 | client based on the totality of that client's |
27 | Pennsylvania operations regardless of whether workers |
28 | engaged therein are provided under one or more |
29 | professional employer agreements or are direct hire |
30 | employees of the client. |
|
1 | (iii) If applicable, separate experience |
2 | modification, merit rating adjustments, construction |
3 | classification premium adjustments or certified safety |
4 | committee program credits shall be applied to the |
5 | exposures of each client covered by a master policy based |
6 | on the client's entire Pennsylvania operations whether |
7 | coverage is being provided for the client's exposures |
8 | under the client's own policy or on a master policy basis |
9 | or multiple coordinated policy basis under one or more |
10 | professional employer agreements, or some combination |
11 | thereof. |
12 | (iv) Nothing in this paragraph shall prohibit a |
13 | professional employer organization from participating in |
14 | a large deductible program, retrospective rating program |
15 | or any other rating program approved for and written |
16 | under a workers' compensation policy offered by an |
17 | insurer. Further, nothing in this paragraph shall |
18 | restrict an insurer from collecting workers' compensation |
19 | premium based on the totality of the exposure under the |
20 | master policy and applying rates and discounts consistent |
21 | with those approved for the insurer pursuant to the |
22 | rating program. |
23 | (c) Employee coverage.--Direct hire employees of and covered |
24 | employees assigned to a client shall all be collectively covered |
25 | either by the State Workers' Insurance Fund or by insurers |
26 | authorized to transact workers' compensation insurance in the |
27 | voluntary market. Covered employees insured by the State |
28 | Workers' Insurance Fund may only be covered pursuant to a policy |
29 | issued to the client under subsection (b)(1) or on a multiple |
30 | coordinated policy basis issued pursuant to subsection (b)(3). |
|
1 | (d) Client obligation.-- |
2 | (1) A client retains the statutory obligation to provide |
3 | workers' compensation coverage for employees that are not |
4 | covered employees pursuant to the professional employer |
5 | agreement. Nothing in this paragraph shall preclude a client |
6 | from purchasing a workers' compensation policy insuring both |
7 | its covered employees and its direct hire employees. |
8 | (2) If a client's insurer or the client, if self- |
9 | insured, has issued coverage for direct hire employees, and |
10 | an injured employee is entitled to workers' compensation |
11 | benefits but there is a dispute as to whether the employee is |
12 | a direct hire employee of the client or a covered employee of |
13 | the PEO, the client's insurer or the client, if self-insured, |
14 | shall pay the benefits, subject to reimbursement of claims |
15 | costs and loss adjustment expenses by the PEO's insurer if it |
16 | is determined that the claimant is a covered employee of the |
17 | PEO. |
18 | (3) If the client does not have coverage for direct hire |
19 | employees, either through an insurer or by self-insurance, |
20 | and an injured employee is entitled to workers' compensation |
21 | benefits but there is a dispute as to whether the employee is |
22 | a direct hire employee of the client or a covered employee of |
23 | the PEO, the PEO's insurer or the PEO, if self-insured, shall |
24 | pay the benefits, subject to reimbursement of claims costs |
25 | and loss adjustment expenses by the client, if it is |
26 | determined that the claimant is not a covered employee of the |
27 | PEO. |
28 | (e) Policy issuance permitted.--Subject to subsection (b), |
29 | and notwithstanding the provisions of section 653 of the act of |
30 | May 17, 1921 (P.L.682, No.284), known as The Insurance Company |
|
1 | Law of 1921, insurers may issue multiple coordinated policies | <-- |
2 | and master policies covering fewer than all of a client's |
3 | employees pursuant to subsection (b)(3) and (5) standard | <-- |
4 | workers' compensation policies under subsection (b)(1), multiple |
5 | coordinated policies under subsection (b)(3) or master policies |
6 | under subsection (b)(5) covering fewer than all of a client's |
7 | employees. |
8 | (f) Notice of coverage to the client.-- |
9 | (1) If coverage is provided under a policy issued to the |
10 | PEO for covered employees of the PEO, the PEO shall give |
11 | clear and conspicuous written notice to the client that: |
12 | (i) The client of the PEO has a continuing |
13 | obligation to provide coverage under the Workers' |
14 | Compensation Act for direct hire employees of the client |
15 | who are not covered employees and not otherwise covered |
16 | under a policy described in this section. |
17 | (ii) While coverage provided under a policy issued |
18 | to the PEO is in force, the PEO will be responsible for |
19 | paying all premium obligations, including any audit |
20 | adjustments and policyholder assessments, and will be |
21 | entitled to any premium refunds. The written notice to |
22 | the client shall further explain that although the PEO |
23 | will charge the client amounts that reflect or include |
24 | the cost of coverage, these charges are not considered |
25 | insurance premium obligations of the client. If there is |
26 | a policy deductible, the written notice to the client |
27 | shall further explain that the PEO is responsible for |
28 | reimbursing the insurer for the deductible and may not |
29 | seek recovery from the client. |
30 | (2) The written notice to the client shall explicitly |
|
1 | state that: |
2 | (i) If the professional employer organization |
3 | terminates the professional employment agreement with the |
4 | client, termination of workers' compensation coverage by |
5 | the insurer shall be effective the sooner of: |
6 | (A) Sixty days after notice of intent to |
7 | terminate workers' compensation coverage by the |
8 | insurer has been given by the professional employer |
9 | organization to the client. |
10 | (B) Fifteen days after notice of intent to |
11 | terminate workers' compensation coverage by the |
12 | insurer for nonpayment has been given by the |
13 | professional employer organization to the client. |
14 | (C) The date on which workers' compensation |
15 | coverage for the covered employees is transferred to |
16 | the client's workers' compensation policy or other |
17 | coverage. |
18 | (ii) The requirements under paragraph (1) shall |
19 | continue to apply to workers' compensation coverage |
20 | provided by the insurer after the notice is given |
21 | pursuant to subparagraph (i). |
22 | (iii) The client shall pay for all workers' |
23 | compensation coverage provided by the insurer, including |
24 | reasonable administrative expenses, subsequent to the |
25 | termination of the professional employer agreement by the |
26 | professional employer organization. |
27 | (iv) If workers' compensation coverage is provided |
28 | through a workers' compensation insurance policy issued |
29 | to the professional employer organization on behalf of |
30 | the client who has been given notice pursuant to |
|
1 | subparagraph (i), the professional employer organization |
2 | shall notify the affected insurer of the notice. |
3 | (g) Notice to department Department of Labor and Industry.-- | <-- |
4 | If the professional employer agreement provides for the PEO to |
5 | provide workers' compensation insurance for covered employees, |
6 | the PEO shall: |
7 | (1) Notify the department Department of Labor and | <-- |
8 | Industry that it has insured covered employees assigned to a |
9 | client for workers' compensation on a multiple coordinated |
10 | policy basis pursuant to subsection (b)(3) or through self- |
11 | insurance in accordance with subsection (b)(4) or on a master |
12 | policy basis pursuant to subsection (b)(5) within 15 days |
13 | after the effective date of the professional employer |
14 | agreement. |
15 | (2) Notify the department Department of Labor and | <-- |
16 | Industry of any cancellation or termination of a professional |
17 | employer agreement under which the PEO has assumed the |
18 | obligation to provide workers' compensation insurance for |
19 | covered employees within ten days following the date the |
20 | notification of cancellation or termination of the |
21 | professional employer agreement is issued to the client. |
22 | (3) Notify the department Department of Labor and | <-- |
23 | Industry of any cancellation or termination of workers' |
24 | compensation coverage for covered employees by the PEO's |
25 | insurer, or any change in insurers for covered employees, |
26 | within ten days of the effective date of cancellation, |
27 | termination or change of insurers. |
28 | (h) Notice by insurer or licensed producer.--The insurer or |
29 | licensed producer of a workers' compensation policy sponsored by |
30 | a PEO for covered employees shall provide the department | <-- |
|
1 | Department of Labor and Industry with copies of all notices of | <-- |
2 | coverage, cancellation or nonrenewal related to that policy. The |
3 | PEO shall notify the insurer or licensed producer of the |
4 | requirement under this subsection. |
5 | (i) Exclusive remedy.-- |
6 | (1) The Workers' Compensation Act shall provide the |
7 | exclusive remedy for injuries suffered by direct hire and |
8 | covered employees in the course and scope of their employment |
9 | or coemployment with the PEO and client where the PEO or |
10 | client has secured workers' compensation insurance or self- |
11 | insured their workers' compensation obligations as required |
12 | by the Workers' Compensation Act, this act and the |
13 | professional employer agreement. Both the PEO and the client |
14 | shall be entitled to the exclusiveness of remedy under |
15 | section 303 of the Workers' Compensation Act regardless of |
16 | which provided such coverage. |
17 | (2) Nothing in this act may include within the coverage |
18 | of the Workers' Compensation Act individuals, services or |
19 | remuneration that are otherwise excluded from the Workers' |
20 | Compensation Act. |
21 | (j) Cost.--The professional employer organization shall not |
22 | make any materially inaccurate, misleading or fraudulent |
23 | representations to the client regarding the cost of workers' |
24 | compensation coverage. If the professional employer organization |
25 | charges the client an itemized amount for workers' compensation |
26 | coverage, the professional employer organization shall provide |
27 | the client with an accurate and concise description of the basis |
28 | upon which it was calculated and the services that are included. |
29 | A professional employer organization shall not charge a client |
30 | an itemized amount for workers' compensation coverage that is |
|
1 | materially inconsistent with the actual amounts that the |
2 | professional employer organization is charged by the insurer, |
3 | given reasonably anticipated loss-sensitive charges, if |
4 | applicable, reasonable recognition of the professional employer |
5 | organization's costs and a margin for profit. |
6 | (k) Applicability.--This section shall apply to new and |
7 | renewal workers' compensation policies issued to professional |
8 | employer organizations on or after the effective date of this |
9 | act. |
10 | Section 504. Unemployment compensation insurance. |
11 | (a) Employer.--Notwithstanding any other provision of this |
12 | act, the following shall apply: |
13 | (1) A professional employer agreement under this act |
14 | shall constitute an arrangement included in section 4(j)(2.1) |
15 | of the act of December 5, 1936 (2nd Sp.Sess., 1937 P.L.2897, |
16 | No.1), known as the Unemployment Compensation Law. |
17 | (2) Nothing in this act shall be construed: |
18 | (i) To affect the responsibilities of the client as |
19 | the employer of covered employees for purposes of the |
20 | Unemployment Compensation Law. |
21 | (ii) To affect the responsibility of the PEO to file |
22 | reports pursuant to section 315(a)(4) of the Unemployment |
23 | Compensation Law. |
24 | (iii) To preclude the applicability of section 4(j) |
25 | (2.1) or any other provisions of the Unemployment |
26 | Compensation Law to any arrangement or person not |
27 | governed by this act. |
28 | (b) Procedure.-- |
29 | (1) A client may authorize a PEO to file employer |
30 | reports pursuant to section 304 of the Unemployment |
|
1 | Compensation Law and pay unemployment compensation |
2 | contributions, interest and penalties on the client's behalf. |
3 | (2) An authorization, filing or payment under this |
4 | subsection shall be made in the manner prescribed by the |
5 | department Department of Labor and Industry. | <-- |
6 | (3) This subsection shall not be construed to allow |
7 | multiple employer reports to be filed on a client's |
8 | unemployment compensation account for a calendar quarter. |
9 | CHAPTER 7 |
10 | ENFORCEMENT |
11 | Section 701. Enforcement. |
12 | (a) Prohibited acts.--A person commits a misdemeanor of the |
13 | third degree if that person: |
14 | (1) Offers, provides, advertises or holds itself out as |
15 | providing professional employer services or uses the names |
16 | PEO, professional employer organization, staff leasing, |
17 | employee leasing, administrative employer or other title |
18 | representing professional employer services without first |
19 | becoming registered under this act. |
20 | (2) Knowingly and willingly misrepresents a material |
21 | fact or fails to disclose a material fact in conjunction with |
22 | any application, registration, renewal or in any report |
23 | required under this act. |
24 | (b) Inspection and disciplinary action.-- |
25 | (1) Upon petition of the department, a court of |
26 | competent jurisdiction may enjoin a PEO from taking action |
27 | under or violating this act. |
28 | (2) The department may conduct audits, inspections and |
29 | investigations as necessary to administer and enforce this |
30 | act. The books and records of a PEO and a client shall be |
|
1 | available to the department for inspection and copying at |
2 | reasonable times. The department may examine an individual |
3 | under oath or affirmation and issue subpoenas to compel the |
4 | attendance of witnesses and the production of documents. |
5 | (3) The department may revoke the registration of a PEO |
6 | or PEO group, or may impose an administrative penalty in an |
7 | amount not to exceed $1,000 for each violation, or both, if |
8 | after notice and hearing, the PEO or PEO group: |
9 | (i) Knowingly violates any provision of this act. |
10 | (ii) Ceases to meet any requirement of this act. |
11 | (iii) Knowingly misrepresents a material fact in |
12 | conjunction with any application, registration or renewal |
13 | or in any report required under this act. |
14 | (iv) Fails to disclose a material fact in |
15 | conjunction with any application, registration or renewal |
16 | or in any report required under this act. |
17 | CHAPTER 21 |
18 | MISCELLANEOUS PROVISIONS |
19 | Section 2101. Effective date. |
20 | This act shall take effect in 180 days. |
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