Print Friendly HOUSE BILL NO. 97 – Professional employers/benefit plan
HOUSE BILL NO. 97
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H0097.......................................by COMMERCE AND HUMAN RESOURCES
PROFESSIONAL EMPLOYERS - Amends existing law to clarify that benefit and
welfare plans maintained by professional employers are not subject to
regulation under Title 41, Idaho Code.
01/26 House intro - 1st rdg - to printing
01/29 Rpt prt - to Com/HuRes
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-sixth Legislature First Regular Session - 2001
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 97
BY COMMERCE AND HUMAN RESOURCES COMMITTEE
1 AN ACT
2 RELATING TO PROFESSIONAL EMPLOYERS; AMENDING SECTION 44-2405, IDAHO CODE, TO
3 CLARIFY THAT BENEFIT AND WELFARE PLANS MAINTAINED BY PROFESSIONAL EMPLOY-
4 ERS ARE NOT SUBJECT TO REGULATION UNDER TITLE 41, IDAHO CODE; AND DECLAR-
5 ING AN EMERGENCY.
6 Be It Enacted by the Legislature of the State of Idaho:
7 SECTION 1. That Section 44-2405, Idaho Code, be, and the same is hereby
8 amended to read as follows:
9 44-2405. MINIMUM STANDARDS. (1) Each professional employer shall, as a
10 condition to being recognized by this chapter, agree to the following stan-
12 (a) Have a written contract between the client and the professional
13 employer setting forth the responsibilities and duties of each party. The
14 contract shall disclose to the client the services to be rendered, the
15 respective rights and obligations of the parties, and provide that the
16 professional employer:
17 (i) Reserves a right of direction and control over workers assigned
18 to the client's location. However, the client may retain such suffi-
19 cient direction and control over the assigned workers as is necessary
20 to conduct the client's business and without which the client would
21 be unable to conduct its business, discharge any fiduciary responsi-
22 bility which it may have, or comply with any applicable licensure,
23 regulatory or statutory requirement of the client;
24 (ii) Assume responsibility for the withholding and remittance of
25 payroll-related taxes and employee benefits from its own accounts, as
26 long as the contract between the client and professional employer
27 remains in force;
28 (iii) Retain authority to hire, terminate, discipline, and reassign
29 assigned workers. However, the client, if it accepts the responsibil-
30 ity for its action, may have the right to accept or cancel the
31 arrangement of any assigned worker.
32 (b) Give written notice of the general nature of the relationship between
33 the professional employer and the client to the workers assigned to the
34 client and the public at large. Such notice may be posted in a visible and
35 conspicuous manner at the client's work site.
36 (2) It is anticipated that under this chapter professional employers
37 will, from time to time, receive from client companies, moneys which represent
38 assigned workers' wages, withholdings, taxes, and benefit plan payments. Each
39 professional employer shall keep in force, in the state of Idaho, a separate
40 bank account or accounts for the purpose of keeping such money separate from
41 the professional employer's operating funds. Assigned workers' wages, with-
42 holdings, taxes, and benefit plan payments shall be promptly paid from such
43 trust accounts.
1 (3) A professional employer shall be considered an employer for purposes
2 of withholding state income tax pursuant to section 63-3035, Idaho Code, to
3 the same extent as the professional employer is an employer for withholding
4 federal income taxes pursuant to the Internal Revenue Code. As long as the
5 professional employer's contract with the client remains in force, the profes-
6 sional employer shall have a right to and shall perform the following respon-
8 (a) Pay wages and collect, report and pay employment taxes from its trust
10 (b) Pay unemployment taxes as required in Idaho state unemployment laws,
11 chapter 13, title 72, Idaho Code;
12 (c) Work with the client in securing and providing worker's compensation
13 coverage for all of its assigned workers.
14 (4) A recognized professional employer shall be deemed the employer for
15 the purposes of sponsoring and maintaining benefit and welfare plans for its
16 assigned workers. Such plans, the sponsoring professional employer, and its
17 clients shall not be subject to title 41, Idaho Code.
18 (5) Subject to any contrary provisions of the contract between the client
19 and the professional employer, the professional employer arrangement that
20 exists between a professional employer and its clients shall be interpreted
21 for the purposes of sales tax on services, insurance and bonding as follows:
22 (a) A professional employer shall not be liable for the acts, errors or
23 omissions of a client or of any assigned worker acting under the direction
24 and control of a client. A client shall not be liable for the acts, errors
25 or omissions of a professional employer or of any assigned worker of a
26 professional employer acting under the direction and control of the pro-
27 fessional employer. Nothing herein shall limit any contractual liability
28 between the professional employer and the client, nor shall this subsec-
29 tion in any way limit the liabilities of any professional employer or cli-
30 ent as defined elsewhere in this chapter;
31 (b) Workers assigned or contracted to a client by a professional employer
32 are not deemed employees of the professional employer for purposes of gen-
33 eral liability insurance, automobile insurance, fidelity bonds, surety
34 bonds, employer's liability which is not covered by worker's compensation,
35 or liquor liability insurance carried by the professional employer unless
36 the employees are included by specific reference in the applicable employ-
37 ment arrangement contract, insurance contract or bond;
38 (c) If Idaho enacts a tax on services similar to the sales tax, the
39 administration fee will be the amount which is taxed.
40 (6) The sale of professional employer arrangements in conformance with
41 the provisions of this chapter shall not constitute the sale of insurance
42 within the meaning of applicable Idaho law.
43 SECTION 2. An emergency existing therefor, which emergency is hereby
44 declared to exist, this act shall be in full force and effect on and after its
45 passage and approval.
STATEMENT OF PURPOSE
This legislation clarifies that benefit and welfare plans
sponsored and maintained by recognized professional employers
are not subject to regulation under title 41 Idaho Code. This
recognizes that professional employers are treated the same
as other self-insured employers with respect to the offering
of employee health plans.
There will be no impact to the general fund.
Name: David E. Kerrick
STATEMENT OF PURPOSE/FISCAL NOTE H97