Text: SSB01171 Text: SSB01173 Text: SSB01100 - SSB01199 Text: SSB Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 Section 1. NEW SECTION. 94B.1 SHORT TITLE. 1 2 This chapter shall be known as the "Iowa Professional 1 3 Employer Organization Recognition Act". 1 4 Sec. 2. NEW SECTION. 94B.2 DEFINITIONS. 1 5 As used in this chapter, unless the context otherwise 1 6 requires: 1 7 1. "Client" means a person who contracts with a 1 8 professional employer organization to obtain services from a 1 9 professional employer organization through a professional 1 10 employer agreement. 1 11 2. "Coemployee" means a person having an employment 1 12 relationship with both the professional employer organization 1 13 and the client. The client's officers, directors, 1 14 shareholders, and partners are considered coemployees of the 1 15 professional employer organization if they are earning wages 1 16 and are acting as operational managers or are performing 1 17 services for the client. 1 18 3. "Person" means a person as defined in section 4.1, 1 19 subsection 20. 1 20 4. "Professional employer agreement" means a written 1 21 services contract in which: 1 22 a. A professional employer organization and a client agree 1 23 to coemploy a majority of the employees providing service at a 1 24 client worksite. 1 25 b. The contract between the professional employer 1 26 organization and the client is intended to be ongoing rather 1 27 than temporary in nature. 1 28 c. Employer responsibilities for coemployees, including 1 29 hiring, firing, and discipline are allocated between the 1 30 professional employer organization and the client. 1 31 5. "Professional employer organization" means a person 1 32 that enters into a professional employer agreement with a 1 33 client to coemploy all or a majority of that client's existing 1 34 workforce at a client worksite. In determining whether the 1 35 professional employer organization employs a majority of the 2 1 employees at a client worksite, any employee who is employed 2 2 pursuant to the professional employer agreement after the 2 3 initial placement of client employees on the payroll of the 2 4 professional employer organization shall be considered a 2 5 coemployee. 2 6 Sec. 3. NEW SECTION. 94B.3 CONTINUING OBLIGATIONS. 2 7 1. COLLECTIVE BARGAINING AGREEMENTS EXEMPTED. A 2 8 professional employer agreement shall have no effect on 2 9 existing collective bargaining agreements. Notwithstanding 2 10 any statements to the contrary, nothing in this chapter shall 2 11 alter the rights or obligations of any client, professional 2 12 employer organization, or coemployee under the federal 2 13 National Labor Relations Act. 2 14 2. STATE LICENSING PROVISIONS NOT EXEMPTED. This chapter 2 15 does not exempt a client or a coemployee from any state, 2 16 local, or federal licensing, registration, or certification 2 17 requirement. 2 18 a. A person who must be licensed, registered, or certified 2 19 according to law and who is a coemployee is deemed an employee 2 20 of the client for purposes of any license, registration, or 2 21 certification requirement. 2 22 b. A professional employer organization does not engage in 2 23 an occupation, trade, or profession that is licensed, 2 24 registered, certified, or otherwise regulated by a 2 25 governmental entity solely by entering into a professional 2 26 employer agreement with a client or a coemployee. 2 27 Sec. 4. NEW SECTION. 94B.4 REQUIREMENTS. 2 28 1. A professional employer organization must meet the 2 29 following requirements: 2 30 a. Have executed a written professional employer agreement 2 31 between the client and the professional employer organization 2 32 that sets forth the responsibilities and duties of each party 2 33 to the agreement. The professional employer agreement shall: 2 34 (1) Contain a description of the type of services to be 2 35 rendered by the professional employer organization to the 3 1 client and of the respective rights and obligations of the 3 2 professional employer organization and the client. 3 3 (2) Provide that the professional employer organization 3 4 does all of the following: 3 5 (a) Reserves the right of direction and control over the 3 6 coemployees working at the client worksite. However, the 3 7 right shall be subject to the client's need to maintain the 3 8 degree of direction and control over the coemployees necessary 3 9 to conduct the client's business, discharge the client's 3 10 fiduciary responsibilities, or comply with licensure, 3 11 registration, or certification requirements applicable to the 3 12 client. 3 13 (b) Assumes responsibility for withholding and remittance 3 14 of payroll-related taxes and employee benefits for coemployees 3 15 from the professional employer organization's own accounts, as 3 16 long as the contract between the client and the professional 3 17 employer organization remains in force. 3 18 (c) Retains authority to hire, terminate, and discipline 3 19 coemployees. 3 20 b. Provide written notice of the general nature of the 3 21 relationship between the professional employer organization 3 22 and the client to the coemployees of the client and to the 3 23 client. 3 24 2. A professional employer organization shall be 3 25 considered an employer of its coemployees for purposes of Iowa 3 26 law. 3 27 Sec. 5. NEW SECTION. 94B.5 WORKERS' COMPENSATION. 3 28 1. Both the client and the professional employer 3 29 organization are considered an employer for purposes of 3 30 coverage under the Iowa workers' compensation laws provided in 3 31 chapter 85, 85A, or 85B. 3 32 2. Both the professional employer organization and the 3 33 client are entitled to the protection of section 85.20, the 3 34 exclusive remedy provision of the Iowa workers' compensation 3 35 laws, irrespective of whether the professional employer 4 1 organization or the client secures and provides workers' 4 2 compensation coverage. 4 3 Sec. 6. NEW SECTION. 94B.6 EMPLOYEE BENEFITS. 4 4 1. A professional employer organization is considered an 4 5 employer under Iowa law for the purpose of sponsoring welfare 4 6 benefit plans for coemployees. 4 7 2. This section does not, however, preclude a client from 4 8 including its coemployees in any welfare benefit plan 4 9 sponsored by the client or any affiliated company of the 4 10 client. 4 11 Sec. 7. NEW SECTION. 94B.7 PROFESSIONAL EMPLOYER 4 12 ORGANIZATION SALE OF SERVICES. 4 13 The provision of services under and negotiation of 4 14 professional employer agreements by a professional employer 4 15 organization in conformance with the provisions of this 4 16 chapter does not constitute the sale of insurance within the 4 17 meaning of Title XIII, subtitle 1. 4 18 Sec. 8. NEW SECTION. 94B.8 UNEMPLOYMENT COMPENSATION 4 19 INSURANCE. 4 20 1. During the term of a professional employer agreement, a 4 21 professional employer organization is liable in accordance 4 22 with the provisions of chapter 96 for the payment of 4 23 contributions, penalties, and interest on wages paid to 4 24 coemployees. 4 25 2. The professional employer organization shall report and 4 26 pay all required contributions to the unemployment 4 27 compensation fund using the state employer account number and 4 28 the contribution rate of the professional employer 4 29 organization. 4 30 3. A professional employer organization that enters into a 4 31 professional employer agreement with a client during the 4 32 course of a taxable year shall receive a credit for amounts 4 33 already paid by the client to the unemployment compensation 4 34 fund for any employee coemployed by the professional employer 4 35 organization. 5 1 EXPLANATION 5 2 This bill creates new Code chapter 94B that recognizes 5 3 professional employer organizations. The bill defines a 5 4 "professional employer organization" as a person that enters 5 5 into a written contract with a client to coemploy all or a 5 6 majority of the client's employees. Both a client and a 5 7 professional employer organization are a "person" as that term 5 8 is defined in Code section 4.1, subsection 20, that means 5 9 individual, corporation, limited liability company, government 5 10 or governmental subdivision or agency, business trust, estate, 5 11 trust, partnership, or association, or any other legal entity. 5 12 A professional employer agreement between a professional 5 13 employer organization and a client allocates employer 5 14 responsibilities for coemployees including hiring, firing, and 5 15 discipline between the parties to the agreement. Both the 5 16 client and the professional employer organization are 5 17 considered employers for purposes of Iowa workers' 5 18 compensation law. The professional employer organization is 5 19 considered an employer for purposes of sponsoring welfare 5 20 benefit plans and reporting and making contributions to the 5 21 unemployment compensation fund. 5 22 LSB 2630SC 79 5 23 av/cls/14
Text: SSB01171 Text: SSB01173 Text: SSB01100 - SSB01199 Text: SSB Index Bills and Amendments: General Index Bill History: General Index
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