• Summary date: Mar 24 2015 - More information

    Amends GS Chapter 58 by enacting new Article 89B, Regulation of Payroll Processors. Provides two terms and definitions for use in the section, employer and payroll processor or processor. Requires all payroll processors conducting business in North Carolina to obtain a bond to provide security that the processor will operate in accordance with the applicable laws of the state as well as federal laws, including paying taxes to the state and federal government for the employers they service. Directs the Commissioner of Insurance (Commissioner) to determine the surety bond amount based on the volume of a payroll processor's business and prohibits it from exceeding the lowest amount required to protect the public. The bond must also designate the Commissioner or his or her designee as payee. Sets out uses of proceeds from the bond, including for the benefit of any employer that might have  a cause of action against the processor. Also requires the Commissioner to establish a program of periodic review of the amount of surety bonding required and regular examinations of payroll processors. Directs the Commissioner to adopt rules to effectuate the surety bond requirement. Sets out minimum requirements that the rules must contain or provide, including rules concerning notification of changes to surety bonds.

    Establishes insurance policy requirements for payroll processors, allowing all processors to maintain contractual liability insurance for 100% of the volume of the payroll processor's business in lieu of the surety bond. Requires all forms relating to the above insurance policies to be filed with the Commissioner. Sets out provisions that each policy must contain. 

    Establishes record keeping requirements, allowing all payroll processors to maintain records of all its processing service activity in conformity with generally accepted accounting principles and practices. Requires such records to be maintained for at least six years from the end of the fiscal year in which the activity took place. Authorizes the Commissioner to conduct examinations of any payroll processor as often as deemed appropriate by the Commissioner. Allows the Commissioner to contract with third parties to expedite and complete the specified processes and activities and exempts those contracts from specified statutes.

    Sets out confidentiality requirements for information collected or submitted pursuant to this new Article. Allows the Commissioner to enter into cooperative agreements with certain agencies and to engage experts in carrying out the regulatory functions of the Article.

    Provides for injunctive relief and temporary or permanent orders to prevent or restrain violations of the Article. Authorizes the Commissioner to issue cease and desist orders for violations of the Article or rules or agreements entered into or promulgated as a result of the Article. Sets out provisions concerning the need to issue emergency cease and desist orders, providing that they are effective immediately upon service and remain effective for 90 days. 

    Effective January 1, 2016, or six months after the date of ratification, whichever is sooner. 

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