IDAHO PROFESSIONAL EMPLOYER
44-2405. Minimum standards. (1) Each professional employer shall, as a condition to being recognized by this chapter, agree to the following standards:
(a) Have a written contract between the client and the professional employer setting forth the responsibilities and duties of each party. The contract shall disclose to the client the services to be rendered, the respective rights and obligations of the parties, and provide that the professional employer:
(i) Reserves a right of direction and control over workers assigned to the client’s location. However, the client may retain such sufficient direction and control over the assigned workers as is necessary to conduct the client’s business and without which the client would be unable to conduct its business, discharge any fiduciary responsibility which it may have, or comply with any applicable licensure, regulatory or statutory requirement of the client;
(ii) Assume responsibility for the withholding and remittance of payroll-related taxes and employee benefits from its own accounts, as long as the contract between the client and professional employer remains in force;
(iii) Retain authority to hire, terminate, discipline, and reassign assigned workers. However, the client, if it accepts the responsibility for its action, may have the right to accept or cancel the arrangement of any assigned worker.
(b) Give written notice of the general nature of the relationship between the professional employer and the client to the workers assigned to the client and the public at large. Such notice may be posted in a visible and conspicuous manner at the client’s work site.
(2) It is anticipated that under this chapter professional employers will, from time to time, receive from client companies, moneys which represent assigned workers’ wages, withholdings, taxes, and benefit plan payments. Each professional employer shall keep in force, in the state of Idaho, a separate bank account or accounts for the purpose of keeping such money separate from the professional employer’s operating funds. Assigned workers’ wages, withholdings, taxes, and benefit plan payments shall be promptly paid from such trust accounts.
(3) A professional employer shall be considered an employer for purposes of withholding state income tax pursuant to section 63-3035, Idaho Code, to the same extent as the professional employer is an employer for withholding federal income taxes pursuant to the Internal Revenue Code. As long as the professional employer’s contract with the client remains in force, the professional employer shall have a right to and shall perform the following responsibilities:
(a) Pay wages and collect, report and pay employment taxes from its trust accounts;
(b) Pay unemployment taxes as required in Idaho state unemployment laws, chapter 13, title 72, Idaho Code;
(c) Work with the client in securing and providing worker’s compensation coverage for all of its assigned workers.
(4) A recognized professional employer shall be deemed the employer for the purposes of sponsoring and maintaining benefit and welfare plans for its assigned workers.
(5) Subject to any contrary provisions of the contract between the client and the professional employer, the professional employer arrangement that exists between a professional employer and its clients shall be interpreted for the purposes of sales tax on services, insurance and bonding as follows:
(a) A professional employer shall not be liable for the acts, errors or omissions of a client or of any assigned worker acting under the direction and control of a client. A client shall not be liable for the acts, errors or omissions of a professional employer or of any assigned worker of a professional employer acting under the direction and control of the professional employer. Nothing herein shall limit any contractual liability between the professional employer and the client, nor shall this subsection in any way limit the liabilities of any professional employer or client as defined elsewhere in this chapter;
(b) Workers assigned or contracted to a client by a professional employer are not deemed employees of the professional employer for purposes of general liability insurance, automobile insurance, fidelity bonds, surety bonds, employer’s liability which is not covered by worker’s compensation, or liquor liability insurance carried by the professional employer unless the employees are included by specific reference in the applicable employment arrangement contract, insurance contract or bond;
(c) If Idaho enacts a tax on services similar to the sales tax, the administration fee will be the amount which is taxed.
(6) The sale of professional employer arrangements in conformance with the provisions of this chapter shall not constitute the sale of insurance within the meaning of applicable Idaho law.
[44-2405, added 1994, ch. 129, sec. 1, p. 288.]