Current law defines a PEO to mean a person engaged in the business of
entering into written contracts for the provision of the nontemporary, ongoing
employee workforce of a client and that under the contract has the obligation to pay
the employees providing services for the client. A PEG is defined to mean two or more
PEOs controlled by the same person. Current law defines a temporary help agency
as an employer who places its employee with or leases its employees to another
employer who controls the employee's work activities and compensates the first
employer for the employee's services, regardless of the duration of the services.
Current law defines a temporary help company as an entity that contracts with a
client to supply individuals to perform services for the client on a temporary basis
to support or supplement the workforce of the client in situations such as personnel
absences, temporary personnel shortages, and workload changes resulting from
seasonal demands or special assignments or projects, and that hires and terminates
the employment of, sets the rate of pay of, and pays the individuals.
This bill modifies the definition of PEO to explicitly exclude from the definition
both a temporary help agency and a temporary help company.
PEO and PEG small operations registration
Currently, a PEO or PEG that has no more than 50 employees performing
services for clients in Wisconsin and that is registered or licensed in another state,
domiciled in another state, and does not maintain an office in Wisconsin or directly
solicit clients that are located or domiciled in Wisconsin may apply for limited
registration. This bill changes the name of such registration from limited to small
operations.
Currently, an application for PEO or PEG registration or the renewal of
registration must be accompanied by a financial statement that sets forth the
financial condition of the applicant. This bill exempts a PEO or PEG seeking small
operations registration or the renewal of small operations registration from the
requirement to provide a financial statement to the department.
Treatment of tax credits and economic development incentives for providing
employment and payment of taxes, assessments, expenditures, and
benefits of employees
Current law provides that, in the event a client of a PEO or PEG is entitled to
obtain tax credits or other economic development incentives from the state as a result
of that client providing employment, the employees of a PEO or PEG who are
providing services for that client are to be considered the employees of the client for
purposes of determining the value of such tax credits or economic development
incentives. This bill provides that the employees of a PEO or PEG who are providing
services for the client will also be considered the employees of the client for the
purposes of determining the value of any tax credits or economic development
incentives that may be provided by a local governmental unit to a client who provides
employment. The bill defines a local governmental unit as a political subdivision of
or special purpose district in this state; an instrumentality or corporation of such a
political subdivision or special purpose district; a combination or subunit of a
political subdivision, special purpose district, instrumentality, or corporation; or an
instrumentality of the state and any of the foregoing.
The bill also requires that any taxes, assessments, expenditures, or benefits
required by the state or a local governmental unit to be paid by an employer on a per
employee basis is to be paid by the client of the PEO or PEG if the employee is
performing services for that client, or by the PEO or PEG if the employee is not
assigned to or providing services for a client. If a PEO or PEG pays any benefits or
monetary consideration to its employees and the benefits or monetary consideration
satisfy the requirements imposed by the state or local government unit, the amount
of the benefits or monetary consideration are to be applied to any obligations
required to be paid by, assessed against, or charged to a client.
Database of registrants
Currently, the department must maintain a list of registered PEOs and PEGs.
This bill provides that the department must periodically update the list and make
the list available on the department's Internet Web site, and that the list must
include the address of each registrant.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB716, s. 1
1Section
1. 440.08 (2) (a) (intro.) of the statutes is amended to read:
AB716,3,42
440.08
(2) (a) (intro.) Except as provided in par. (b) and in ss. 440.51, 442.04,
3444.03, 444.11, 448.065, 447.04 (2) (c) 2., 449.17 (1m) (d),
and 449.18 (2) (d)
, and
4461.02 (3) (a) and (b) and (4), the renewal dates for credentials are as follows:
AB716, s. 2
5Section
2. 461.01 (5) of the statutes is amended to read:
AB716,3,166
461.01
(5) "Professional employer organization" means a person that is
7engaged in the business of entering into written contracts for the provision of the
8nontemporary, ongoing employee workforce of a client and providing services under
9those contracts and that under those contracts has the obligation to pay the
10employees providing services for those clients from its own accounts, regardless of
11whether the person uses the term "professional employer organization," "PEO,"
12"staff leasing company," "registered staff leasing company," "employee leasing
13company," or "administrative employer," or uses any other name, as part of the
14person's business name or to describe the person's business.
"
Professional employer
15organization" does not mean a temporary help agency, as defined in s. 102.01 (2) (f),
16or a temporary help company, as defined in s. 108.02 (24m).
AB716,4,73
461.02
(2) (intro.) Except as provided in sub. (7) (b), an applicant for
4registration under this section shall submit to the department an application for
5registration on a form prescribed by the department, together with the registration
6fee determined by the department under s. 440.03 (9) (a)
, that contains and all of the
7following
information:
AB716, s. 4
8Section
4. 461.02 (2) (f) of the statutes is renumbered 461.02 (2) (f) 1. and
9amended to read:
AB716,4,2110
461.02
(2) (f) 1.
A Except as provided under subd. 2., a financial statement that
11sets forth the financial condition of the applicant as of a date that is not more than
1213 months preceding the date of the application, that is prepared in accordance with
13generally accepted accounting principles, and that has been audited by an
14independent certified public accountant. The financial statement shall be without
15qualification as to the going concern status of the applicant. A professional employer
16group may meet the requirements of this
paragraph
subdivision by submitting a
17combined or consolidated audited financial statement. An applicant that does not
18have sufficient operating history to have an audited financial statement that is based
19on at least 12 months of operating history may meet the requirements of this
20paragraph subdivision by submitting financial statements that have been reviewed
21by an independent certified public accountant.
AB716, s. 5
22Section
5. 461.02 (2) (f) 2. of the statutes is created to read:
AB716,4,2423
461.02
(2) (f) 2. Subdivision 1. does not apply to a professional employer
24organization or professional employer group applying for registration under sub. (5).
AB716,5,133
461.02
(4) (a)
On Renewal applications shall be submitted, together with the
4applicable renewal fee determined by the department under s. 440.03 (9) (a), to the
5department on a form provided by the department on or before the applicable
6renewal date specified under s. 440.08 (2) (a)
, and except
. Except as provided in
par. 7pars. (b)
and (c) and sub. (7) (b),
a registrant that wishes to renew its registration 8the renewal application shall
submit to the department, on forms furnished by the
9department, a renewal application, together with an updated be accompanied by a 10financial statement
described, as that term is used in sub. (2) (f)
and the renewal fee
11determined by the department under s. 440.03 (9) (a). A renewal of registration is
12valid for one year after the date of renewal 1., updated to reflect the current financial
13condition of the registrant.
AB716, s. 7
14Section
7. 461.02 (4) (c) of the statutes is created to read:
AB716,5,1715
461.02
(4) (c) A professional employer organization or professional employer
16group applying to renew a registration issued under sub. (5) is not required to submit
17a financial statement under this subsection.
AB716, s. 8
18Section
8. 461.02 (5) (title) of the statutes is amended to read:
AB716,5,1919
461.02
(5) (title)
Limited
Small operations registration.
AB716,6,1022
461.02
(5) (a) Except as provided in sub. (7) (b), a professional employer
23organization or professional employer group that is domiciled outside this state, that
24is registered or licensed as a professional employer organization or professional
25employer group in another state, that does not maintain an office in this state or
1directly solicit clients that are located or domiciled in this state, and that has no more
2than 50 employees performing services for clients in this state on any given day may
3apply for
limited small operations registration under this section by filing with the
4department a
limited small operations registration form prescribed by the
5department and paying the initial credential fee determined by the department
6under s. 440.03 (9) (a). An applicant that is seeking
limited small operations 7registration shall, in addition to the information
provided required under sub. (2)
(a)
8to (e), provide the department with information and documentation showing that the
9applicant meets the qualifications specified in this paragraph for
limited small
10operations registration.
AB716,6,1511
(b) Except as provided in sub. (7) (b), a professional employer organization or
12professional employer group seeking
limited small operations registration that has
13employees performing services for clients in this state on July 1, 2009, shall register
14with the department as provided in sub. (3) (a)
, and the initial limited registration
15shall be valid as provided in sub. (3) (a).
AB716,6,2116
(c) Except as provided in sub. (7) (b), a professional employer organization or
17professional employer group seeking
limited small operations registration that does
18not have employees performing services for clients in this state on July 1, 2009, shall
19register with the department as provided in sub. (3) (b), before contracting with a
20client in this state
, and the initial limited registration shall be valid as provided in
21sub. (3) (b).
AB716,7,322
(d) Except as provided in sub. (7) (b), a professional employer organization or
23professional employer group registered under this subsection that wishes to renew
24its
limited small operations registration shall, in addition to complying with sub. (4),
25provide the department with information and documentation showing that the
1professional employer organization or professional employer group continues to
2meet the qualifications specified in par. (a) for
limited small operations registration
,
3and the limited registration shall be valid as provided in sub. (4).
AB716,7,166
461.02
(6) Professional employer group registration. Except as provided in
7sub. (7) (b), 2 or more professional employer organizations that are part of a
8professional employer group may register under this section or renew a registration
9by providing the information required under sub. (2), (4), or (5) on a combined or
10consolidated basis, paying the initial credential or renewal fee determined by the
11department under s. 440.03 (9) (a), and guaranteeing each other's obligations. If a
12professional employer group provides a combined or consolidated financial
13statement under sub. (2) (f)
1. that includes the financial condition of entities that
14are not part of the professional employer group, the person controlling the
15professional employer group shall guarantee the obligations of the professional
16employer organizations in the professional employer group.
AB716, s. 11
17Section
11. 461.02 (9) (intro.) (except 461.02 (9) (title)) of the statutes is
18renumbered 461.02 (9) (am) and amended to read:
AB716,7,2219
461.02
(9) (am) The department shall maintain
and periodically update a list
20of all professional employer organizations and professional employer groups
21registered under this section
. All, and shall make the list available on the
22department's Internet Web site. The list shall include the address of each registrant.
AB716,8,2
23(bm) Except as provided in par. (am), all records maintained by the department
24that contain any information obtained from an applicant or registrant are
1confidential and not open to public inspection or copying under s. 19.35 (1) unless one
2of the following applies:
AB716, s. 12
3Section
12. 461.02 (9) (a) to (d) of the statutes are renumbered 461.02 (9) (bm)
41. to 4.
AB716, s. 13
5Section
13. 461.03 (1) of the statutes is amended to read:
AB716,8,196
461.03
(1) Working capital requirement. Working capital, as defined by
7generally accepted accounting principals, of not less than $100,000, as shown in the
8financial statement submitted to the department under s. 461.02 (2) (f)
1., (4), or (6).
9If a professional employer organization or professional employer group has less than
10$100,000 in working capital, the department may issue a registration or renewal
11registration contingent on the registrant meeting the working capital requirement
12of this subsection no later than 180 days after the issuance of the registration or
13renewal registration. During the period of contingent registration, the registrant
14shall submit quarterly financial statements to the department accompanied by an
15attestation by the chief executive officer of the registrant that all wages, salaries,
16employee benefits, worker's compensation insurance premiums, payroll taxes,
17unemployment insurance contributions, and other amounts that are payable to or
18with respect to an employee of the registrant performing services for a client were
19paid by the registrant when due.
AB716, s. 14
20Section
14. 461.03 (2) of the statutes is amended to read:
AB716,9,1621
461.03
(2) Alternative commitment. A bond, certificate of deposit, escrow
22account, or irrevocable letter of credit in an amount that is not less than $100,000
23or, if the financial statement submitted to the department under s. 461.02 (2) (f)
1.,
24(4), or (6) indicates a deficit in working capital, a bond, certificate of deposit, escrow
25account, or irrevocable letter of credit in an amount that is not less than $100,000
1plus an amount that is sufficient to cover that deficit. The commitment described in
2this subsection shall be in a form approved by the department, shall be held in a
3depository designated by the department, and shall secure the payment by the
4professional employer organization or professional employer group of any wages,
5salaries, employee benefits, worker's compensation insurance premiums, payroll
6taxes, unemployment insurance contributions, or other amounts that are payable to
7or with respect to an employee performing services for a client if the professional
8employer organization or professional employer group does not make those
9payments when due. The commitment shall be established in favor of or be made
10payable to the department, for the benefit of the state and any employee to whom or
11with respect to whom the professional employer organization or professional
12employer group does not make a payment described in this subsection when due. The
13professional employer organization or professional employer group shall file with the
14department any agreement, instrument, or other document that is necessary to
15enforce the commitment against the professional employer organization or
16professional employer group, or against any relevant 3rd party, or both.
AB716, s. 15
17Section
15. 461.04 (4) (title) of the statutes is amended to read:
AB716,9,1918
461.04
(4) (title)
Tax credits and other economic development incentives;
19taxes, assessments, expenditures, and benefits.
AB716, s. 16
20Section
16. 461.04 (4) of the statutes is renumbered 461.04 (4) (b) and
21amended to read:
AB716,9,2522
461.04
(4) (b) For purposes of determining tax credits, other economic
23development incentives provided by the state
or a local governmental unit that are
24based on providing employment, or any other benefits that
arises arise out of the
25employment of an employee of a professional employer organization or professional
1employer group who is performing services for a client, such an employee is
2considered to be an employee solely of the client, and the client is entitled to the
3benefit of the tax credit, economic development incentive, or other benefit. If the
4amount of a tax credit, incentive, or benefit described in this
subsection paragraph 5is based on the number of employees employed by a client, only those employees of
6a professional employer organization or professional employer group who are
7performing services for the client shall be treated as employees employed by the
8client, and employees of the professional employer organization or professional
9employer group who are performing services for
the professional employer
10organization or professional employer group or for another client shall not be treated
11as employees employed by the client. On request of a client that is seeking a tax
12credit, incentive, or other benefit described in this
subsection paragraph or
on
13request of an agency of this state
or local governmental unit that is responsible for
14administering such a tax credit, incentive, or benefit, a professional employer
15organization or professional employer group shall provide any employment
16information
requested and reasonably required by the agency
or local governmental
17unit that is necessary to support a claim, application, or other action by the client.
AB716, s. 17
18Section
17. 461.04 (4) (a) of the statutes is created to read:
AB716,10,2019
461.04
(4) (a) In this subsection, "local governmental unit" has the meaning
20given in s. 19.42 (7u).
AB716, s. 18
21Section
18. 461.04 (4) (c) of the statutes is created to read:
AB716,11,722
461.04
(4) (c) Taxes, assessments, expenditures, or benefits required by the
23state or a local governmental unit to be paid by an employer on a per employee basis
24shall be paid by, assessed against, or charged to a client if the employee is providing
25services for that client or by a professional employer organization or professional
1employer group if the employee is providing services to the professional employer
2organization or professional employer group and not assigned to or providing
3services for a specific client. Benefits or monetary consideration provided or paid to
4an employee by a professional employer organization or professional employer group
5shall be credited against the obligations required to be paid by, assessed against, or
6charged to the client if the benefits or monetary consideration provided or paid to the
7employee satisfy the requirements imposed by the state or local governmental unit.
AB716, s. 19
8Section
19. 461.10 of the statutes is created to read:
AB716,11,10
9461.10 Short title. This chapter shall be known as the "Wisconsin
10Professional Employer Organizations Act."