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:
AB1056,17,63 (a) A net worth of not less than $100,000, as shown in the financial statement
4submitted to the department under sub. (2) (b) 7., (d), or (f), except that the value of
5any instrument specified in par. (b) may not be included in calculating the net worth
6required under this paragraph.
AB1056,17,217 (b) A bond, certificate of deposit, escrow account, or irrevocable letter of credit
8in an amount that is not less than $100,000. The commitment described in this
9paragraph shall be in a form approved by the department, shall be held in a
10depository designated by the department, and shall secure the payment by the
11professional employer organization of any wages, salaries, employee benefits,
12worker's compensation insurance premiums, payroll taxes, unemployment
13insurance contributions, or other amounts that are payable to or with respect to a
14covered employee if the professional employer organization does not make those
15payments when due. The commitment shall be established in favor of or be made
16payable to the department, for the benefit of the state and any covered employee to
17whom or with respect to whom the professional employer organization does not make
18a payment described in this paragraph when due. The professional employer
19organization shall file with the department any agreement, instrument, or other
20document that is necessary to enforce the commitment against the professional
21employer organization or any relevant 3rd party or both.
AB1056,18,2 22(4) Professional employer agreements; requirements. (a) Allocation of
23rights, duties, and obligations.
Except as specifically provided in this section, a
24coemployment relationship shall be governed by a professional employer agreement.

1A professional employer agreement shall allocate the rights, duties, and obligations
2of an employer that arise out of an employment relationship as follows:
AB1056,18,63 1. The professional employer organization shall be permitted to exercise and
4enforce only those rights, and shall be required to perform only those duties and
5obligations, that are specifically allocated to the professional employer organization
6under the professional employer agreement or this section.
AB1056,18,157 2. The client shall be permitted to exercise and enforce all those rights, and
8shall be required to perform all those duties and obligations, that are specifically
9allocated to the client under the professional employer agreement or this section or
10that are not specifically allocated under the professional employer agreement or this
11section and, unless otherwise agreed to in the professional employer agreement, to
12retain the exclusive right to direct, supervise, and control the activities of the covered
13employees as necessary to conduct the client's business, to discharge the client's
14fiduciary duties, or to comply with any federal, state, or local licensing, registration,
15or certification requirements that are applicable to the client or a covered employee.
AB1056,18,1816 (b) Contents of agreement. In addition to allocating the rights, duties, and
17obligations specified in par. (a), a professional employer agreement shall specify all
18of the following:
AB1056,19,519 1. That the professional employer organization is responsible for paying wages
20or salary to a covered employee; for withholding, collecting, reporting, and remitting
21payroll taxes and unemployment insurance contributions on behalf of a covered
22employee; and, to the extent agreed to in the professional employer agreement, for
23making payments for employee benefits for a covered employee; except that the
24professional employer organization is not responsible for the payment of any
25remuneration payable by a client to a covered employee beyond the covered

1employee's regular rate of pay or overtime pay, such as bonuses, commissions, profit
2sharing, deferred compensation, severance or dismissal pay, or sick pay, holiday pay,
3vacation pay, or other paid time off, unless the professional employer organization
4specifically agrees in the professional employer agreement to assume responsibility
5for those payments.
AB1056,19,96 2. Whether the professional employer organization or the client assumes
7liability for worker's compensation under s. 102.03 and agrees to obtain a policy of
8worker's compensation insurance issued by an insurer authorized to do business in
9this state under s. 102.28 (2) (a) or self-insure in accordance with s. 102.28 (2) (b).
AB1056,19,1310 3. That the client may hire, discipline, or discharge a covered employee, but
11that the professional employer organization may also hire, discipline, or discharge
12a covered employee as necessary to fulfill the professional employer organization's
13duties and obligations under the professional employer agreement and this section.
AB1056,19,1814 (c) Notice to covered employees. A professional employer organization that
15enters into a professional employer agreement shall provide written notice to each
16covered employee who is affected by the professional employer agreement
17concerning the general nature of the coemployment relationship created by the
18professional employer agreement.
AB1056,19,2219 (d) Responsibilities of professional employer organization and client. Except
20as specifically provided in a professional employer agreement, all of the following
21apply to a coemployment relationship that is created by the professional employer
22agreement:
AB1056,19,2423 1. The client is solely responsible for the quality, adequacy, and safety of the
24goods or services produced, provided, or sold in the course of the client's business.
AB1056,20,4
12. The client is solely responsible for directing, supervising, and controlling the
2activities of the covered employees with respect to the client's business, for training
3the covered employees involved in that business, and for the acts, errors, or omissions
4of the covered employees in the performance of those activities.
AB1056,20,85 3. The client is not liable for the acts, errors, or omissions of the professional
6employer organization or of a covered employee when the covered employee is acting
7under the express direction, supervision, and control of the professional employer
8organization.
AB1056,20,119 4. The professional employer organization is not liable for the acts, errors, or
10omissions of a client or of a covered employee when the covered employee is acting
11under the express direction, supervision, and control of the client.
AB1056,20,2012 5. For purposes of coverage under any policy of general liability insurance or
13employer's liability insurance, other than worker's compensation insurance, carried
14by the professional employer organization or under a fidelity or surety bond posted
15by the professional employer organization, a covered employee is not, solely by
16reason of being a covered employee, considered to be an employee of the professional
17employer organization, unless the covered employee is specified as an employee of
18the professional employer organization for those purposes in the professional
19employer agreement and in any applicable prearranged employment contract,
20insurance policy, or bond.
AB1056,20,2421 (e) Professional employer services not insurance. A professional employer
22organization that offers, markets, sells, administers, or provides professional
23employer services is not engaged in the business of insurance or in the business of
24an employee benefit plan administrator under ch. 633.
AB1056,21,7
1(5) Rights, duties, and obligations unaffected. (a) Labor relations. Nothing
2in this section or in any professional employer agreement may be construed to affect
3or impair any collective bargaining agreement or any right, duty, or obligation of any
4covered employee, representative of a covered employee, client, or professional
5employer organization under subch. I, III, IV, or V of ch. 111, the federal National
6Labor Relations Act, 29 USC 151 to 169, or the federal National Railway Labor Act,
745 USC 151 to 180.
AB1056,21,98 (b) Employment arrangements. Nothing in this section or in any professional
9employer agreement may be construed to do any of the following:
AB1056,21,1210 1. Diminish, affect, or impair any rights of a covered employee as to a client or
11any duties or obligations of a client as to a covered employee that existed prior to the
12effective date of the professional employer agreement.
AB1056,21,1913 2. Affect or impair any contractual relationship or restrictive covenant between
14a covered employee and a client, whether existing prior to the effective date of the
15professional employer agreement or entered into after that date. A professional
16employer organization shall have no liability or responsibility in connection with or
17arising out of any contractual relationship or restrictive covenant between a covered
18employee and a client unless the professional employer organization specifically
19agrees otherwise in writing.
AB1056,22,220 (c) Licensing. Nothing in this section or in a professional employer agreement
21may be construed to affect or impair any federal, state, or local licensing,
22registration, or certification requirement that is applicable to a client or covered
23employee. All of the following apply to a covered employee who is required to be
24licensed, registered, or certified under any federal, state, or local law, rule, or

1regulation and to the client and professional employer organization that are the
2coemployers of the covered employee:
AB1056,22,53 1. The covered employee is considered to be an employee solely of the client for
4purposes of engaging in any trade, occupation, profession, or other activity that is
5subject to the licensing, registration, or certification requirement.
AB1056,22,106 2. The professional employer organization is not considered to be engaging in
7any trade, occupation, profession, or other activity that is subject to the licensing,
8registration, or certification requirement solely because the professional employer
9organization has entered into and maintains a coemployment relationship with the
10covered employee.
AB1056,22,1311 3. The client has the sole right to direct, supervise, and control the activities
12of the covered employee, and the business of the client, that are subject to the
13licensing, registration, or certification requirement.
AB1056,22,1914 (d) Taxation, tax credits, and other economic development incentives. 1. Any
15covered employee whose services are taxable service under s. 77.52 or 77.53 is
16considered to be an employee of the client for purposes of liability for payment of sales
17or use taxes on those services. Nothing contained in this section shall release a client
18from any liability for payment of the full amount of sales or use taxes due on those
19services.
AB1056,22,2220 2. The liability of a professional employer organization for any tax on
21professional employer services that is based on gross receipts is limited to a tax on
22the administrative fee charge by the professional employer organization.
AB1056,23,223 3. For purposes of any tax that is based on the payroll of an employer, a client
24is liable for the amount of that tax that is based on the compensation of a covered

1employee and a professional employer organization is liable for the amount of that
2tax that is based on the compensation of an employee who is not a covered employee.
AB1056,23,183 4. For purposes of determining tax credits, other economic development
4incentives provided by the state that are based on providing employment, or any
5other benefits that arises out of the employment of a covered employee, a covered
6employee is considered to be an employee solely of the client, and the client is entitled
7to the benefit of the tax credit, economic development incentive, or other benefit. If
8the amount of a tax credit, incentive, or benefit described in this paragraph is based
9on the number of employees employed by a client, only those covered employees who
10are coemployed by the client and the professional employer organization shall be
11treated as employees employed by the client, and covered employees who are
12coemployed by the professional employer organization and another client of the
13professional employer organization shall not be treated as employees employed by
14the client. On request of a client that is seeking a tax credit, incentive, or other
15benefit described in this paragraph or of an agency of this state that is responsible
16for administering such a tax credit, incentive, or benefit, a professional employer
17organization shall provide any employment information reasonably required by the
18agency that is necessary to support a claim, application, or other action by the client.
AB1056,23,2419 (e) Contracts, grants, and loans. For purposes of contracting with, or obtaining
20a grant or loan from, the state or a local governmental unit, a client's status or
21certification as a minority business, minority financial adviser, minority investment
22firm, women's business, small business, native American or Indian business,
23veteran-owned business, or disadvantaged business is not affected because the
24client has entered into a professional employer agreement.
AB1056,24,6
1(6) Violations; penalties. (a) Disciplinary action. The department may deny,
2suspend, revoke, restrict, refuse to renew, or otherwise withhold a registration;
3impose a period of probation under specified conditions; order a registrant to cease
4and desist from violating this section or a rule promulgated under sub. (8); or impose
5a forfeiture of not more than $1,000; if the department finds that an applicant,
6registrant, or controlling person has done any of the following:
AB1056,24,87 1. Conducted any of the activities specified in sub. (2) (a) without first
8registering with the department as provided in sub. (2).
AB1056,24,119 2. Knowingly made a material misrepresentation or false statement in an
10application for registration or for renewal of a registration under sub. (2) or in a
11report under s. 108.067.
AB1056,24,1512 3. Been convicted of any crime in connection with the operation of a professional
13employer organization, any crime that involves fraud or deceit, or any crime that
14otherwise affects the ability of the applicant, registrant, or controlling person to
15operate a professional employer organization.
AB1056,24,1716 4. Willfully committed a violation of this section or of a rule promulgated under
17sub. (8).
AB1056,24,2118 (b) Investigations; orders. The department may investigate violations specified
19in par. (a) and issue orders to enforce this section. The investigations and orders shall
20be made as provided in s. 103.005. Orders issued under this section are subject to
21review as provided in ch. 227.
AB1056,25,3 22(7) Child support; delinquent taxes. (a) Social security number or federal
23identification number required.
1. Except as provided in subd. 3., the department
24shall require each applicant for registration who is an individual to provide the
25department with the applicant's social security number, and shall require each

1applicant for registration who is not an individual to provide the department with
2the applicant's federal employer identification number, when applying for initial or
3renewal registration.
AB1056,25,104 2. If an applicant who is an individual fails to provide the applicant's social
5security number to the department or if an applicant who is not an individual fails
6to provide the applicant's federal employer identification number to the department,
7the department may not issue or renew a registration to or for the applicant unless
8the applicant is an individual who does not have a social security number and the
9applicant submits a statement made or subscribed under oath or affirmation as
10required under subd. 3.
AB1056,25,1511 3. If an applicant who is an individual does not have a social security number,
12the applicant shall submit a statement made or subscribed under oath or affirmation
13to the department that the applicant does not have a social security number. The
14form of the statement shall be prescribed by the department. A registration issued
15in reliance upon a false statement submitted under this subdivision is invalid.
AB1056,25,2116 4. The subunit of the department that obtains a social security number or a
17federal employer identification number under subd. 1. may not disclose the social
18security number or the federal employer identification number to any person except
19to the department of revenue for the sole purpose of requesting certifications under
20s. 73.0301 or on the request of the subunit of the department that administers the
21child and spousal support program under s. 49.22 (2m).
AB1056,26,722 (b) Child support payments. The department shall deny, suspend, restrict,
23refuse to renew, or otherwise withhold a registration for failure of the applicant or
24registrant to pay court-ordered payments of child or family support, maintenance,
25birth expenses, medical expenses, or other expenses related to the support of a child

1or former spouse or for failure of the applicant or registrant to comply, after
2appropriate notice, with a subpoena or warrant issued by the department or a county
3child support agency under s. 59.53 (5) and related to paternity or child support
4proceedings, as provided in a memorandum of understanding entered into under s.
549.857. Notwithstanding s. 103.005 (10), an action taken under this paragraph is
6subject to review only as provided in the memorandum of understanding entered into
7under s. 49.857 and not as provided in ch. 227.
AB1056,26,138 (c) Delinquent taxes. The department shall deny an application for the issuance
9or renewal of a registration, or revoke a registration already issued, if the
10department of revenue certifies under s. 73.0301 that the applicant or registrant is
11liable for delinquent taxes. Notwithstanding s. 103.005 (10), an action taken under
12this paragraph is subject to review only as provided under s. 73.0301 (5) and not as
13provided in ch. 227.
AB1056,26,15 14(8) Rules. The department shall promulgate rules to implement this section.
15Those rules shall include rules providing for all of the following:
AB1056,26,1716 (a) Alternative registration of professional employer organizations under sub.
17(2) (g).
AB1056,26,1918 (b) Fees under sub. (2) (h) 4. and 6. for registration of professional employer
19groups and for other services provided under this section.
AB1056,26,2120 (c) Minimum requirements for issuance or renewal of a registration under sub.
21(2) (i).
AB1056, s. 13 22Section 13. 108.02 (21e) (a) of the statutes is amended to read:
AB1056,26,2523 108.02 (21e) (a) Has the right to hire and terminate the employees who perform
24services for the client and to reassign the employees to other clients as provided in
25s. 105.117 (4) (b) 3.
;
AB1056, s. 14
1Section 14. 108.02 (21e) (d) of the statutes is amended to read:
AB1056,27,62 108.02 (21e) (d) Has a general right of direction and control over the employees,
3including corporate officers, which right may be shared with the client to the degree
4necessary to allow the client to conduct its business, meet any fiduciary
5responsibility, or comply with any applicable regulatory or statutory requirements

6as provided in a professional employer agreement under s. 105.117 (4);
AB1056, s. 15 7Section 15. 108.02 (21e) (f) of the statutes is amended to read:
AB1056,27,108 108.02 (21e) (f) Has the obligation to establish, fund, and administer employee
9benefit plans for the employees, if so agreed to in a professional employer agreement
10under s. 105.117 (4) (b) 1.
; and
AB1056, s. 16 11Section 16. 108.02 (21e) (g) of the statutes is amended to read:
AB1056,27,1312 108.02 (21e) (g) Provides notice of the employee leasing arrangement to the
13employees under s. 105.117 (4) (c).
AB1056, s. 17 14Section 17 . Nonstatutory provisions.
AB1056,27,2115 (1) Rule making. The department of workforce development shall submit in
16proposed form the rules required under section 105.117 (8) of the statutes, as created
17by this act, to the legislative council staff under section 227.15 (1) of the statutes no
18later than the first day of the 6th month beginning after the effective date of this
19subsection, unless the secretary of administration requires the department to
20prepare an economic impact report under section 227.137 of the statutes for the
21proposed rules.
AB1056, s. 18 22Section 18. Effective dates. This act takes effect on the first day of the 12th
23month beginning after publication, except as follows:
AB1056,28,2
1(1) Rule making. The treatment of Section 17 (1) of this act takes effect on the
2day after publication.
AB1056,28,33 (End)
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