5373-S.E AMH COND REIN 126
ESSB 5373 - H AMD 592
By Representative Condotta
FAILED 4/6/2007
On page 13, beginning on line 10, strike all of sections 8 through 11 and insert the following:
"NEW SECTION. Sec. 8. A new section is added to chapter 50.04 RCW to read as follows:
For the purposes of this title:
(1) "Professional employer organization" means a person or entity that enters into an agreement with one or more operating employers to provide professional employer services. The "professional employer organization" has the primary responsibility for all payment to the department of contributions, penalties, and interest owed to the department under this chapter. "Professional employer organization" includes entities that use the term "staff leasing company," "permanent leasing company," "registered staff leasing company," "employee leasing company," "administrative employer," or any other name, when they provide professional employer services to operating employers. The following are not classified as professional employer organizations: Independent contractors in RCW 50.04.140; temporary staffing services companies and services referral agencies as defined in RCW 50.04.245; third-party payers as defined in section 15 of this act; or labor organizations.
(2) "Coemployer" means either a professional employer organization or an operating employer that has entered into a professional employer agreement.
(3) "Covered employee" means an individual performing services for an operating employer that constitutes employment under this title.
(4) "Operating employer" means any employer who enters into a professional employer agreement with a professional employer organization.
(5) "Professional employer services" means services provided by the professional employer organization to the operating employer, which include, but are not limited to, human resource functions, risk management, or payroll administration services, in a coemployment relationship.
(6) "Coemployment relationship" means a relationship that is intended to be ongoing rather than temporary or project-specific, where the rights, duties, and obligations of an employer in an employment relationship are allocated between coemployers pursuant to a professional employer agreement and state law. A coemployment relationship exists only if a majority of the employees performing services to an operating employer, or to a division or work unit of an operating employer, are covered employees. In determining the allocation of rights and obligations in a coemployment relationship:
(a) The professional employer organization has only those employer rights and is subject only to those obligations specifically allocated to it by the professional employer agreement or state law;
(b) The operating employer has those rights and obligations allocated to it by the professional employer agreement or state law, as well as any other right or obligation of an employer that is not specifically allocated by the professional employer agreement or state law.
(7) "Professional employer agreement" means a written contract between an operating employer and a professional employer organization that provides for: (a) The coemployment of covered employees; and (b) the allocation of employer rights and obligations between the operating employer and the professional employer organization with respect to the covered employees.
NEW SECTION. Sec. 9. A new section is added to chapter 50.12 RCW to read as follows:
(1) A professional employer organization must register with the department and ensure that its operating employers are registered with the department as provided in RCW 50.12.070.
(2) By September 1, 2007, the professional employer organization shall provide the department with:
(a) The names, addresses, unified business identifier numbers, and employment security account numbers of all its existing operating employers who do business or have covered employees in Washington state. This requirement applies whether or not the operating employer currently has covered employees performing services in Washington state;
(b) The names and social security numbers of corporate officers, owners, or limited liability company members of operating employers; and
(c) The business location in Washington state where payroll records of its operating employers will be made available for review or inspection upon request of the department.
(3) For operating employers registering for the first time as required in RCW 50.12.070, the professional employer organization must:
(a) Provide the names, addresses, unified business identifier numbers, and employment security account numbers of the operating employers who do business or have covered employees in Washington state. This requirement applies whether or not the operating employer currently has covered employees performing services in Washington state;
(b) Provide the names and social security numbers of corporate officers, owners, or limited liability company members of the operating employers; and
(c) Provide the business location in Washington state where payroll records of its operating employers will be made available for review or inspection at the time of registration or upon request of the department.
(4) The professional employer organization must notify the department within thirty days each time it adds or terminates a relationship with an operating employer. Notification must take place on forms provided by the department. The notification must include the name, employment security account number, unified business identifier number, and address of the operating employer, as well as the effective date the relationship began or terminated.
(5) The professional employer organization must provide a power of attorney, confidential information authorization, or other evidence, completed by each operating employer as required by the department, authorizing it to act on behalf of the operating employer for unemployment insurance purposes.
(6) The professional employer organization must file quarterly wage and contribution reports with the department. The professional employer organization may file either a single electronic report containing separate and distinct information for each operating employer and using the employer account number and tax rate assigned to each operating employer by the department, or separate paper reports for each operating employer.
(7) The professional employer organization must maintain accurate payroll records for each operating employer and make these records available for review or inspection upon request of the department at the location provided by the professional employer organization.
NEW SECTION. Sec. 10. A new section is added to chapter 50.29 RCW to read as follows:
For purposes of this title, each operating employer of a professional employer organization is assigned its individual contribution rate based on its own experience.
NEW SECTION. Sec. 11. A new section is added to chapter 50.24 RCW to read as follows:
(1) The operating employer of a professional employer organization is liable for the payment of any taxes, interest, or penalties due.
(2) The professional employer organization may collect and pay taxes due to the department for unemployment insurance coverage from its operating employers in accordance with its professional employer agreement. If such payments have been made to the professional employer organization by the operating employer, the department shall first attempt to collect the contributions due from the professional employer organization.
(3) To collect any contributions, penalties, or interest due to the department from the professional employer organization, the department must follow the procedures contained in chapter 50.24 RCW. If the amount of contributions, interest, or penalties assessed by the commissioner pursuant to chapter 50.24 RCW is not paid by the professional employer organization within ten days and cannot be obtained from any bond that has been secured for this purpose, then the commissioner may follow the collection procedures in chapter 50.24 RCW. After the ten-day period and attempts to collect from a bond obtained by the professional employer organization for this purpose, if the professional employer organization has not paid the total amount owing, the commissioner may also pursue the operating employer to collect what is owed using the procedures contained in chapter 50.24 RCW."
EFFECT: Specifies that "professional employer organizations" have the primary responsibility for payments of contributions, penalties, and interest.
Authorizes the Employment Security Department to follow its usual collection procedures only if the amount of contributions assessed cannot be obtained from a bond secured for the purpose of paying such contributions.
Changes references to "client employer" to "operating employer."