2. Diminish, affect, or impair any rights of a covered employee as to a client or
any duties or obligations of a client as to a covered employee that existed before the
effective date of the professional employer agreement.
3. Affect or impair any contractual relationship or restrictive covenant between
a covered employee and a client, whether existing prior to the effective date of the
professional employer agreement or entered into after that date.
4. Affect or impair any federal, state, or local licensing, registration, or
certification requirement that is applicable to a client or covered employee (licensing

requirement). Under the bill: a) a covered employee who is subject to a licensing
requirement is considered to be an employee solely of the client for purposes of
engaging in any trade, occupation, profession, or other activity that is subject to the
licensing requirement; b) a PEO is not considered to be engaging in any trade,
occupation, profession, or other activity that is subject to the licensing requirement
solely because the PEO has entered into and maintains a coemployment relationship
with the covered employee; and c) a client has the sole right to direct, supervise, and
control the activities of the covered employee, and the business of the client, that are
subject to the licensing requirement.
In addition, the bill provides that, for purposes of taxation, tax credits, and
other economic development incentives, all of the following apply:
1. A covered employee whose services are subject to sales or use taxes is
considered to be an employee of the client for purposes of liability for payment of sales
or use taxes on those services.
2. The liability of a PEO for any tax on professional employer services that is
based on gross receipts is limited to a tax on the administrative fee charge by the
professional employer organization, which does not include any amount charged to
a client by a PEO for wages, salaries, employee benefits, worker's compensation
coverage, payroll tax withholdings, unemployment insurance contributions, or other
assessments paid to or on behalf of a covered employee by the PEO.
3. The liability of a client for any tax that is based on the payroll of an employer
is limited to the amount of that tax that is based on the compensation of a covered
employee and the liability of a PEO for such a tax is limited to the amount of that tax
that is based on the compensation of an employee who is not a covered employee.
4. The client is entitled to the benefit of tax credits, economic development
incentives provided by the state that are based on providing employment, or other
benefits that arise out of the employment of a covered employee.
Finally, the bill provides that, for purposes of contracting with, or obtaining a
grant or loan from, the state or a local governmental unit, a client's status or
certification as a minority business, minority financial adviser, minority investment
firm, women's business, small business, native American or Indian business,
veteran-owned business, or disadvantaged business is not affected because the
client has entered into a professional employer agreement.
For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB1056, s. 1 1Section 1. 20.445 (1) (j) of the statutes is created to read:
AB1056,6,32 20.445 (1) (j) Professional employer organizations. All moneys received under
3s. 105.117 (2) (h) for the administration and enforcement of s. 105.117.
AB1056, s. 2
1Section 2. 21.72 (1) (a) 9. of the statutes is created to read:
AB1056,7,22 21.72 (1) (a) 9. A registration issued under s. 105.117 (2).
AB1056, s. 3 3Section 3. 49.857 (1) (d) 9. of the statutes is created to read:
AB1056,7,44 49.857 (1) (d) 9. A registration issued under s. 105.117 (2).
AB1056, s. 4 5Section 4. 73.0301 (1) (d) 3m. of the statutes is amended to read:
AB1056,7,86 73.0301 (1) (d) 3m. A license or, certificate, or registration issued by the
7department of workforce development under s. 102.17 (1) (c), 103.275 (2) (b), 103.91
8(1), 103.92 (3), 104.07 (1) or (2) or 105.13 (1), 105.05, or 105.117 (2).
AB1056, s. 5 9Section 5. 102.01 (2) (a) of the statutes is renumbered 102.01 (2) (af).
AB1056, s. 6 10Section 6. 102.01 (2) (ad) of the statutes is created to read:
AB1056,7,1211 102.01 (2) (ad) "Coemployer" means a professional employer organization, as
12defined in s. 105.117 (1) (j), or a client, as defined in s. 105.117 (1) (c).
AB1056, s. 7 13Section 7. 102.01 (2) (an) of the statutes is created to read:
AB1056,7,1414 102.01 (2) (an) "Covered employee" has the meaning given in s. 105.117 (1) (g).
AB1056, s. 8 15Section 8. 102.01 (2) (f) of the statutes is amended to read:
AB1056,7,1916 102.01 (2) (f) "Temporary help agency" means an employer who on a temporary
17basis
places its employee with or leases its employees to another employer who
18controls the employee's work activities and compensates the first employer for the
19employee's services, regardless of the duration of the services.
AB1056, s. 9 20Section 9. 102.04 (2p) of the statutes is created to read:
AB1056,8,321 102.04 (2p) A coemployer that assumes liability under s. 105.117 (4) (b) 2. for
22compensation under this chapter is the employer of a covered employee for purposes
23of this chapter. The coemployer assuming that liability is liable under s. 102.03 for
24all compensation payable under this chapter to that covered employee, including any
25payments required under s. 102.16 (3), 102.18 (1) (b) or (bp), 102.22 (1), 102.35 (3),

1102.57, or 102.60. Except as permitted under s. 102.29, a coemployer assuming that
2liability may not seek or receive reimbursement from another coemployer for any
3payments made as a result of that liability.
AB1056, s. 10 4Section 10. 102.29 (6m) of the statutes is created to read:
AB1056,8,85 102.29 (6m) No covered employee who makes a claim for compensation against
6a coemployer that has assumed liability under s. 105.117 (4) (b) 2. for compensation
7under this chapter may make a claim or maintain an action in tort against any other
8coemployer of the covered employer.
AB1056, s. 11 9Section 11. 103.005 (10) of the statutes is amended to read:
AB1056,8,1310 103.005 (10) Except as provided in ss. 103.275 (2) (bm) and (br), 103.91 (4) (b)
11and (c), 103.92 (6) and (7), 104.07 (5) and (6), 105.117 (7) (b) and (c), and 105.13 (2)
12and (3), orders of the department under chs. 103 to 106 shall be subject to review in
13the manner provided in ch. 227.
AB1056, s. 12 14Section 12. 105.117 of the statutes is created to read:
AB1056,8,16 15105.117 Registration of professional employer organizations. (1)
16Definitions. In this section:
AB1056,8,2317 (a) "Administrative fee" means the fee that is charged to a client by a
18professional employer organization for professional employer services, except that
19"administrative fee" does not include any amount charged to a client by a
20professional employer organization for wages, salaries, employee benefits, worker's
21compensation coverage, payroll tax withholdings, unemployment insurance
22contributions, or other assessments paid to or on behalf of a covered employee by the
23professional employer organization.
AB1056,8,2524 (b) "Applicant" means a professional employer organization that applies for
25registration under sub. (2).
AB1056,9,2
1(c) "Client" means any person that enters into a professional employer
2agreement with a professional employer organization.
AB1056,9,33 (d) "Coemployer" means a professional employer organization or a client.
AB1056,9,114 (e) "Coemployment relationship" means a relationship between a professional
5employer organization and a client, a professional employer organization and a
6covered employee, and a client and a covered employee under a professional
7employer agreement that is intended to be an ongoing relationship and not a
8temporary or project-specific relationship and in which the rights, duties, and
9obligations of an employer that arise out of an employment relationship are allocated
10between the professional employer organization and the client as provided in the
11professional employer agreement and this section.
AB1056,9,1212 (f) "Controlling person" means any of the following:
AB1056,9,1513 1. A person who, individually or acting in concert with one or more other
14persons, owns or controls, directly or indirectly, 25 percent or more of the ownership
15interest of an applicant or registrant.
AB1056,9,1816 2. A person who serves as president or chief executive officer of an applicant
17or registrant or who otherwise has the authority to act as the senior executive officer
18of an applicant or registrant.
AB1056,9,2519 (g) "Covered employee" means an individual who has a coemployment
20relationship with a professional employer organization and a client under a
21professional employer agreement that complies with this section and who has
22received written notice of that coemployment relationship under sub. (4) (c).
23"Covered employee" includes an individual who is an officer, director, member,
24manager, or partner of a client if the professional employer agreement provides for
25the coemployment of the individual, the individual has received written notice of that

1coemployment relationship under sub. (4) (c), and the individual acts as an
2operational manager of or performs operational services for the client.
AB1056,10,53 (h) "Professional employer group" means 2 or more professional employer
4organizations that are controlled by the same person and that agree to guarantee
5each other's obligations under this section.
AB1056,10,76 (i) "Professional employer agreement" means a written contract between a
7professional employer organization and a client that provides for all of the following:
AB1056,10,98 1. The majority of the employees of the client or of the employees in a division
9or work unit of the client to be covered employees.
AB1056,10,1210 2. The allocation between the professional employer organization and the
11client of the rights, duties, and obligations of an employer that arise out of an
12employment relationship.
AB1056,10,1413 3. The professional employer organization and the client to assume their
14respective duties and obligations under this section.
AB1056,10,2015 (j) "Professional employer organization" has the meaning given in s. 108.02
16(21e), regardless of whether the person uses the term "professional employer
17organization," "PEO," "staff leasing company," "registered staff leasing company,"
18"employee leasing company," or "administrative employer," or uses any other name,
19as part of the person's business name or to describe the person's business.
20"Professional employer organization" does not include any of the following:
AB1056,10,2521 1. A person that shares employees with a controlled group of corporations, as
22defined in 26 USC 414 (b), or with other trades or businesses that are under common
23control, as defined in 26 USC 414 (c), if the person's principal business activity is not
24entering into professional employer agreements and if the person does not hold itself
25out as a professional employer organization.
AB1056,11,4
12. A person that performs services as an independent contractor under an
2arrangement in which the person assumes responsibility for the satisfactory
3completion of the work or services that the person has contracted to perform and
4controls the means of performing that work or those services.
AB1056,11,55 3. A temporary help company, as defined in s. 108.02 (24m).
AB1056,11,76 (k) "Professional employer services" means the service of entering into
7coemployment relationships.
AB1056,11,98 (L) "Registrant" means a professional employer organization that is registered
9under sub. (2).
AB1056,11,16 10(2) Registration requirements. (a) Registration required. No person may
11offer or provide professional employer services, advertise that the person is a
12professional employer organization or that the person provides professional
13employer services, or otherwise hold itself out as a professional employer
14organization unless the person first registers with the department as provided in this
15subsection. To register under this subsection, a person shall file the registration form
16under par. (b) and pay the applicable registration fee specified in par. (h) 1. to 5.
AB1056,11,1917 (b) Registration form. To apply for registration under this subsection, an
18applicant shall file with the department a registration form prescribed by the
19department that contains all of the following information:
AB1056,11,2020 1. The name or names under which the applicant conducts business.
AB1056,11,2221 2. The address of the principal place of business of the applicant and of each
22office that the applicant maintains in this state.
AB1056,11,2423 3. The social security number or federal employer identification number of the
24applicant as provided in sub. (7) (a).
AB1056,12,4
14. A list by jurisdiction of each name under which the applicant has operated
2in the 5 years preceding the date of the application, including any alternate names
3of the applicant, the names of any predecessor business entities of the applicant, and,
4if known, the names of any successor business entities of the applicant.
AB1056,12,65 5. A statement of ownership, which shall include the name and business
6experience of every controlling person, as defined in sub. (1) (f) 1., of the applicant.
AB1056,12,87 6. A statement of management, which shall include the name and business
8experience of every controlling person, as defined in sub. (1) (f) 2., of the applicant.
AB1056,12,189 7. A financial statement that sets forth the financial condition of the applicant
10as of a date that is not more than 180 days preceding the date of the application, that
11is prepared in accordance with generally accepted accounting principles, and that
12has been audited by an independent certified public accountant. A professional
13employer organization group may meet the requirements of this subdivision by
14submitting a combined or consolidated audited financial statement. A professional
15employer organization that does not have sufficient operating history to have an
16audited financial statement that is based on at least 12 months of operating history
17may meet the requirements of this subdivision by submitting pro form a financial
18statements that have been reviewed by an independent certified public accountant.
AB1056,12,2519 (c) Initial registration. 1. Each professional employer organization that is
20operating in this state on the effective date of this subdivision .... [revisor inserts
21date], shall register with the department by no later than 180 days after that date.
22An initial registration under this subdivision is valid until 180 days after the end of
23the first fiscal year of the registrant that ends more than one year after the effective
24date of this subdivision .... [revisor inserts date], unless sooner suspended, restricted,
25or revoked under sub. (6).
AB1056,13,6
12. Any person that is not engaged in the business of providing professional
2employer services in this state on the effective date of this subdivision .... [revisor
3inserts date], shall register with the department before engaging in that business in
4this state. An initial registration under this subdivision is valid until 180 days after
5the end of the first fiscal year of the registrant that ends after the date of initial
6registration, unless sooner suspended, restricted, or revoked under sub. (6).
AB1056,13,137 (d) Renewal registration. A registrant that wishes to renew its registration
8shall, by no later than 180 days after the end of the registrant's fiscal year, renew that
9registration by notifying the department of any changes in the information specified
10in par. (b) 1. to 6., filing an updated financial statement as described in par. (b) 7.,
11and paying the renewal fee specified in par. (h) 2. A renewal registration is valid for
12one year after the date of renewal, unless sooner suspended, restricted, or revoked
13under sub. (6).
AB1056,14,214 (e) Limited registration. 1. A professional employer organization that is
15domiciled outside this state, that is registered or licensed as a professional employer
16organization in another state that has registration or licensure requirements that
17are at least as strict as the registration requirements under this subsection, that does
18not maintain an office in this state or directly solicit clients that are located or
19domiciled in this state, and that has no more than 50 covered employees employed
20in this state on any given day may apply for limited registration under this
21subsection by filing with the department a limited registration form prescribed by
22the department and paying the limited registration fee specified in par. (h) 3. A
23professional employer organization that is seeking limited registration shall, in
24addition to the information provided under par. (b), provide the department with
25information and documentation showing that the professional employer

1organization meets the qualifications specified in this subdivision for limited
2registration.
AB1056,14,63 2. A professional employer organization seeking limited registration that has
4covered employees in this state on the effective date of this subdivision .... [revisor
5inserts date], shall register with the department as provided in par. (c) 1., and the
6initial limited registration shall be valid as provided in par. (c) 1.
AB1056,14,117 3. A professional employer organization seeking limited registration that does
8not have covered employees in this state on the effective date of this subdivision ....
9[revisor inserts date], shall register with the department as provided in par. (c) 2.
10before employing any covered employees in this state, and the initial limited
11registration shall be valid as provided in par. (c) 2.
AB1056,14,1612 4. A registrant that wishes to renew its limited registration shall, in addition
13to complying with par. (d), provide the department with information and
14documentation showing that the registrant continues to meet the qualifications
15specified in subd. 1. for limited registration, and the limited registration shall be
16valid as provided in par. (d).
AB1056,14,1817 5. A limited registrant is not required to comply with the financial capability
18requirement under sub. (3).
AB1056,14,2219 (f) Professional employer group registration. A professional employer group
20may register under this subsection or renew a registration by providing the
21information required under par. (b), (d), or (e) on a combined or consolidated basis
22and paying the fee specified in par. (h) 4.
AB1056,15,423 (g) Alternative registration. The department may by rule provide for
24registration of a professional employer organization without compliance with par.
25(b), (d), (e), or (f) or sub. (3) on acceptance by the department of an affidavit or

1certification provided by a bonded, independent, and qualified assurance
2organization that has been approved by the department certifying that the
3professional employer organization is qualified to engage in the business of
4providing professional employer services in this state.
AB1056,15,65 (h) Fees. 1. An applicant for initial registration under par. (c) shall pay an
6initial registration fee of $500.
AB1056,15,87 2. An applicant for renewal registration under par. (d) shall pay a renewal
8registration fee of $250.
AB1056,15,109 3. An applicant for limited registration or for renewal of a limited registration
10under par. (e) shall pay a limited registration fee of $250.
AB1056,15,1411 4. An applicant for group registration or for renewal of a group registration
12under par. (f) shall pay a reasonable fee determined by the department by rule that
13does not exceed an amount that is necessary to cover the cost of issuing or renewing
14the group registration.
AB1056,15,1615 5. An applicant for alternative registration or for renewal of an alternative
16registration under par. (g) shall pay an alternative registration fee of $250.
AB1056,15,1917 6. The department may promulgate rules to specify a reasonable fee for any
18other service provided under this section that does not exceed an amount that is
19necessary to cover the cost of providing that service.
AB1056,15,2120 7. All fees collected under this paragraph shall be deposited into the general
21fund and credited to the appropriation account under s. 20.445 (1) (j).
AB1056,16,622 (i) Issuance of registration. On receipt of an application for registration or for
23renewal of a registration under par. (c) to (g) and of the applicable registration fee
24under par. (h) 1. to 5., the department shall investigate the applicant or registrant
25to determine whether the applicant or registrant is qualified for registration or for

1renewal registration. Subject to subs. (6) and (7) (b) and (c), the department shall
2issue a registration or renewal registration if, after completing the investigation, the
3department determines that the applicant or registrant meets the requirements
4under this subsection and rules promulgated under sub. (8) for issuance or renewal
5of a registration and is satisfied that the applicant or registrant will comply with this
6section and those rules.
AB1056,16,117 (j) List of registrants; confidentiality. The department shall maintain a list of
8all professional employer organizations registered under this section. All records
9maintained by the department that contain any information obtained from an
10applicant or registrant are confidential and not open to public inspection or copying
11under s. 19.35 (1) unless one of the following applies:
AB1056,16,1212 1. Disclosure of the record is necessary for the administration of this section.
AB1056,16,1413 2. A court of competent jurisdiction in this state orders the department to
14release the record.
AB1056,16,2015 3. The requester is the subunit of the department that administers child and
16spousal support or a county child support agency under s. 59.53 (5), the request is
17made under s. 49.22 (2m), and the request is limited to the name, home address, and
18business address of the applicant or controlling person who is the subject of the
19request and any financial information about the applicant or controlling person
20contained in the record.
AB1056,16,2421 4. The department of revenue requests the record for the purpose of locating
22a person, or the assets of a person, who has failed to file tax returns, who has
23underreported taxable income, or who is a delinquent taxpayer; identifying
24fraudulent tax returns; or providing information for tax-related prosecutions.
AB1056,17,2
1(3) Financial capability. Except as provided in sub. (2) (e) 5. or (g), a
2professional employer organization shall maintain one of the following:
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