Senate amendment to the 2nd edition makes the following changes.
Amends the enactment date, providing that the act will be effective on October 1, 2013 (was, July 1, 2013).
Senate committee substitute makes the following changes to the 1st edition.
Repeals GS 58-89A-5(8) defining hazardous financial condition.
Amends GS 58-89A-50(a), concerning surety bonds, providing that an applicant whose current assets do not exceed current liabilities pursuant to GS 58-89A-60(b) must file an additional surety bond or other items as set forth in subsection GS 58-89A-5(f), equal to or in excess of current liabilities, less current assets.
Amends GS 58-89A-60(b), providing that every applicant must file with the Commissioner an audited GAAP financial statement, prepared as of a date not more than 90 days before the application, that demonstrates that the applicant or licensee's current assets exceed current liabilities. Sets out the requirements for the GAAP financial statement, including that it must be audited by an independent certified public accountant licensed to practice in the jurisdiction in which the accountant is located and that the accountant cannot have qualification as to the going concern status of the PEO. Provides that a PEO group can submit combined or consolidated audited financial statements to meet the above requirements, except for PEOs that do not have sufficient operating history.
Amends GS 58-89A-85, Supervision; rehabilitation; liquidation, requiring the Commissioner to proceed in two specified manners if it is determined that a licensee is bankrupt (previously, allowed if it is determined the licensee is bankrupt or in a hazardous financial condition).
Amends GS 58-89A-95, reinstating previously deleted language which provided that a licensee must give written notice of the agreement, as it affects assigned employees, to each employee assigned to a client company work site.
Amends GS 58-89A-100, regarding contract requirements, providing that, unless otherwise expressly agreed to by a professional employer organization and a client company in a PEO agreement, the client company retains the exclusive right of direction and control over the assigned employees as is necessary to conduct the client company's business. Also provides that the licensee will have the right to hire, discipline, and terminate an assigned employee in accordance with the licensee's responsibilities under GS Chapter 58 and a PEO agreement. Establishes that the client company has the right to hire, discipline, and terminate an assigned employee.
Reinstates previously repealed GS 58-89A-145, Examinations, and provides that the reasonable cost of an examination, including fees related to attorneys, appraisers, and so forth can only be recovered pursuant to GS 58-89A-65(d).
Summary date: Mar 27 2013 - More information
Amends various provisions of Article 89A of GS Chapter 58 governing the licensure requirements for Professional Employer Organizations (PEOs) as follows.
Amends GS 58-89A-5(8) to redefine a hazardous financial condition as being the license applicant's inability to demonstrate a net worth of at least $50,000. An applicant must demonstrate net worth through either audited financial statements or guarantees, letters of credit, or other security acceptable to the Department of Insurance.
Amends GS 58-89A-50 to change the surety bond requirement under subsection (a) from the existing formula based on the applicant's prior year compensation to a flat amount of $100,000 and authorizes the applicant to submit in lieu of a surety bond an irrevocable letter of credit from an FDIC-insured financial institution or a cash deposit. Deletes subsection (d) (which prohibits a licensee from requiring a client to contribute to the licensee's surety bond payment).
Amends GS 58-89A-60(b) to change the standard applicable to the financial information submitted by a license applicant from demonstrating that the applicant is not in a hazardous financial condition to demonstrating that the applicant meets the financial requirements specified by the Commissioner of Insurance.
Amends GS 58-89A-95 by deleting subsections (b) and (c) (which establish certain notice requirements that the licensee must give to employees).
Amends GS 58-89A-100 by deleting language in subsection (1) requiring the contract between a licensee and a client company to reserve to the licensee the right of direction and control over its own employees assigned to the client while allowing the client to retain sufficient control over the licensee's employees necessary to conduct the client's business. Deletes subsection (4) (which requires the contract to reserve to the licensee the right to hire, fire, and discipline its employees).
Repeals GS 58-89A-145 (which relates to the Commissioner's authority in conducting license examinations), and repeals GS 58-89A-155(a)(4) (which relates to a notice requirement under a different Article within Chapter 58).
The act becomes effective July 1, 2013.
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