Bill Summary for S 475 (2013-2014)
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A BILL TO BE ENTITLED AN ACT TO MAKE VARIOUS TECHNICAL, CLARIFYING, AND OTHER CHANGES TO THE PROFESSIONAL EMPLOYER ORGANIZATION STATUTES.Intro. by Meredith.
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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.