Missouri Senate

Introduced

REGISTRATION OF PEOS

Under this act, no person is permitted to provide, advertise, or otherwise hold itself out as providing professional employer services unless such person is registered with the Department of Insurance, Financial Institutions, and Professional Registration. PEO's may register individually or as a group. PEOs may further apply for limited registration. A PEO is eligible for limited registration if it is domiciled outside the state, licensed as a PEO in another state, does not maintain an office in this state or directly solicit clients in this state, and does not have more than 50 employees employed or domiciled in this state on any given day.

The Department of Insurance shall maintain a list of PEOs registered in this state. The Department is permitted to produce forms to be used for registration but shall permit the acceptance of electronic filings by either the PEO or an independent qualified assurance organization authorized by the PEO to act on behalf of a PEO.

PEOs shall pay an initial registration fee not to exceed $500 with an annual renewal fee not exceed $250. PEOs seeking limited registration shall pay an initial and annual registration fee not to exceed $250. The Department may determine a lower fee to be paid by a PEO. The Department shall determine a fee to be paid by PEO groups. No fee shall exceed the amount reasonably necessary for the administration of the act.

PEO BOARD

This act establishes the Professional Employer Organization Board, which shall consist of 5 members appointed by the Governor with the advice and consent of the Senate. The board is required to hold an annual meeting at which it is required to elect a chairperson and secretary. The Division of Professional Registration is required to provide staffing for the board.

REQUIREMENTS OF PEOS AND CLIENTS OF PEOS

Each PEO or PEO group shall maintain either positive working capital or provide a bond, irrevocable letter of credit, or securities with a minimum market value equaling the deficiency plus one hundred thousand dollars to the Department. PEOs seeking limited registration are not required to meet these requirements.

The act establishes the conditions under which a client and a PEO may enter into a professional employment agreement as well as the rights and responsibilities of each party.

PENALTIES

Persons may be sanctioned by the Department for providing professional employer services without registering with the Department, or for providing false or fraudulent information to the Department in conjunction with any registration, renewal, or report required by this act. Such sanctions may include revocation of license or the imposition of an administrative penalty of not more than $1,000, among other potential penalties.

DEFINITIONS

For purposes of this act, covered employees shall be considered employees solely of the client and not the PEO. Moreover, the client shall have the sole right of direction and control of the professional or licensed activities of covered employees and of the client's business.

The act modifies the definition of "lessor employing unit" for the purposes of unemployment law to include PEOs.

WOMAN AND MINORITY-OWNED BUSINESSES

This act provides that a client's status or certification as a minority-owned or woman-owned business enterprise shall not be affected because such client has entered into an agreement with a PEO or uses the services of a PEO.

LARGE DEDUCTIBLE AGREEMENTS

The act creates new provisions of law relating to large deductible agreements. Specifically, insurers that issue certain workers' compensation policies are required to:

• Require full collateralization of the outstanding obligations owed under a large deductible agreement; and

• Limit the size of a policyholder's obligations under a large deductible agreement to no greater than 20% of the total net worth of the policyholder at each policy inception as determined by an audited financial statement as of the most recently available fiscal year end.

Any insurer determined to be in a financially hazardous condition by the Director of the Department of Insurance, Financial Institutions and Professional Registration is prohibited from issuing or renewing a policy that includes a large deductible agreement.

The provisions of this act relating to large deductible agreements only apply to large deductible agreement issued or renewed by an insurer on or after January 1, 2018.

This act is substantially similar to SCS/SB 877 (2016), HB 1703 (2016) and HB 2203 (2014).

SCOTT SVAGERA