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[Utah Administrative Code Table of Contents]
[Title R156. Table of Contents]
R156-59-101 Short Title.
These rules are known as the "Employee Leasing Company Act Rules".
R156-59-102 Definitions.
In addition to the definitions in Title 58, Chapters 1 and 59, as used in Title 58, Chapters 1 and 59 or these rules:
(1) "Commencing or reentering business" as used in Subsection 58-59-302 (6) means that any applicant for licensure, other than a licensee applying for and qualifying for renewal of licensure prior to the expiration of its current license, is subject to the $50,000 minimum net worth required in that subsection.
(2) "Current financial statements" means a statement of financial position (balance sheet), and a statement of earnings (income or profit and loss statement) including the schedules and notes that pertain thereto for a period of time ending no earlier than the last tax year end of the entity for which the statements are submitted. Statements are to be prepared in accordance with generally accepted accounting principles and presented in a format and in such detail as prescribed by the division.
(3) "Self-funded or partially self-funded insurance plan" means any plan of insurance or provision of an employee benefits program for which the final premium or cost is retrospectively affected or determined after the end of the policy, plan, or fiscal year based upon actual experience and where risk of loss is borne by the employee leasing company.
(4) "Unprofessional conduct" as defined in Title 58, Chapters 1 and 59 is further defined, in accordance with Subsection 58-1-203 (5), in Section R156-59-501.
R156-59-103 Authority - Purpose.
These rules are adopted by the division under the authority of Subsection 58-1-106 (1) to enable the division to administer Title 58, Chapter 59.
R156-59-104 Organization - Relationship to Rule R156-1.
The organization of this rule and its relationship to Rule R156-1 is as described in Section R156-1-107.
R156-59-302 Application for Licensure.
(1) An application for license shall be accompanied by the following documents:
(a) Certificates of Registration or other satisfactory evidence of current appropriate registration with the:
(i) Division of Corporations and Commercial Code;
(ii) Department of Employment Security;
(iii) Utah State Tax Commission; and
(iv) Internal Revenue Service; and
(b) Certification that the applicant will maintain at the business offices of the applicant evidence of current worker's compensation insurance covering every employee leased by the applicant to a client company if licensure is granted, and that such evidence of insurance shall be available for inspection by a representative of the division during normal business hours.
(c) the form of each and every contract between the employee leasing company and a client company which is used or will be used by the applicant employee leasing company;
(d) the form of each and every contract between the employee leasing company and each employee of that leasing company who is to be leased to a client company; and
(e) documentation of financial responsibility as required under these rules and Title 58, Chapter 59, the Employee Leasing Company Act.
R156-59-303 Financial Responsibility.
(1) Financial responsibility shall be determined by the totality of history and circumstances relating to an applicant for licensure as an employee leasing company or to a licensed employee leasing company; however, the primary evidence which shall be used by the division is the financial statements, income tax returns and credit reports of the applicant or licensee.
(2) An applicant or licensee shall provide the division with:
(a) current financial statements of the applicant or licensed employee leasing company in substance as prescribed by the division; and
(b) current financial statements audited by a certified public accountant relating to any self-funded or partially self-funded insurance plans maintained by the applicant or licensed employee leasing company for the benefit of employees of the applicant leased to client companies.
(3) An applicant or licensee may provide the division with, or the division may consider on its own:
(a) other evidence regarding the financial responsibility of an applicant or licensee including:
(i) operating history as an employee leasing company;
(ii) current and past financial condition and operating results;
(iii) history of debt or payable payment practices;
(iv) capitalization of applicant or licensee;
(v) form of organization and limits on the liability of owners, officers, and managers;
(vi) guarantees of the obligations of the applicant or licensee by other persons;
(vii) credit reports; and
(viii) history of judgements, liens, or other action of a similar nature.
(4) If the division determines that financial responsibility has not been demonstrated, the division shall advise the applicant or licensee of its finding and the applicant or licensee may submit whatever additional information it may believe will assist the division in making a finding of financial responsibility.
(5) In accordance with the following schedule, each licensed employee leasing company shall file with the division a report in form as prescribed by the division, certified by an independent certified public accountant, and an owner, partner, officer, or responsible managing employee of the licensee, certifying to the fact that all federal, state, and local withholding taxes, unemployment taxes, FICA taxes, worker's compensation premiums, and employee benefit plan obligations have been paid:
Quarter Ends Report Due March 31st Following June 30th June 30th Following September 30th September 30th Following December 31st December 31st Following March 31st
(6) Failure of an employee leasing company to submit reports as required by statute or these rules, or upon a finding by the director of reasonable cause to believe the financial responsibility of an employee leasing company is impaired to the extent it poses a threat to the public interest and the employee leasing company fails to submit information requested by issuance of a subpoena duces tecum as is reasonable and necessary to demonstrate financial responsibility, shall be grounds for the division to take appropriate action in accordance with the provisions of Title 63, Chapter 46b, to immediately suspend the license of an employee leasing company.
R156-59-304 Contracts.
(1) Each contract in place between an employee leasing company and a client company, and between an employee leasing company and a leased employee shall conform to the following standards:
(a) Contract Between Employee Leasing Company and Employee to be Leased: A contract between an employee leasing company and that company's employee to be lease to a client company shall contain at a minimum the following:
(i) complete identification with respect to the employee leasing company to include name of the company as filed with the Division of Corporations and Commercial Code and the name under which the company does business, the company's street address and telephone number, and the name of the responsible management person of the company who shall be the employee's contact with the employee leasing company;
(ii) disclosure in clearly understandable terms that the employee is under contract for the purpose of being leased to a client company acceptable to the employee and under employment terms and conditions acceptable to the employee;
(iii) disclosure of the identity of the entity from whom the employee will receive compensation for work performed;
(iv) disclosure of the total compensation, including all employee benefits, to which the employee will be entitled;
(v) an affirmative representation by the employee leasing company that it will pay or cause to be paid when due all amounts to which the employee is entitled or which are to be paid to others, including government agencies and insurance companies, as a result of the employee's employment; and
(vi) addenda to the contract as necessary to document modification of any conditions of employment of the employee including the client company to whom the employee is leased, change in compensation including employee benefits, change in terms and conditions of employment, or any other matter which is material in the employment of the employee by the employee leasing company or in the leasing of the employee to a client company.
(b) Contract Between Employee Leasing Company and Client Company Leasing Employees: A contract between an employee leasing company and a client company to who leased employees are provided shall contain at a minimum the following:
(i) complete identification with respect to the employee leasing company to include name of the company as filed with the Division of Corporations and Commercial Code and the name under which the company does business, the company's street address and telephone number, and the name of the responsible management person of the company who shall be the client company's contact with the employee leasing company; and
(ii) complete identification with respect to the client company to include name of the company as filed with the Division of Corporations and Commercial Code and the name under which the company does business, the company's street address and telephone number, and the name of the responsible management person of the company who shall be the employee leasing company's contact with the client company; employee leasing company;
(2) With respect to each contract, the employee leasing company shall file a form of the contract with the division accompanied by a letter from legal counsel for the employee leasing company expressing a legal opinion that the contract form fully complies with the contract standards set forth in this section.
(3) A contract form shall not be used by an employee leasing company until the contract form has been reviewed by legal counsel for the employee leasing company, found to be is in compliance with the contract standards, and is filed with the division with the required opinion letter from counsel.
R156-59-306 Expiration of License - Renewal Requirements.
(1) Each applicant for renewal of an employee leasing company license shall demonstrate continuing qualification for licensure by submission of:
(a) documentation of financial responsibility as outlined in Subsection R156-58-303
(b) a qualifying questionnaire; and
(c) current financial statements of any self-funded or partially self-funded insurance plan in substance as required on forms as prescribed by the division.
R156-59-307 Reorganization of Employee Leasing Company Business Entity.
A reorganization of the business organization or entity under which an employee leasing company is licensed shall require application for a new license under the new form of organization or business structure. The creation of a new legal entity constitutes a reorganization and includes a change to a new entity under the same form of business entity or the change of the form of business entity between proprietorship, partnership, whether limited or general, joint venture, corporation or any other business form.
R156-59-501 Unprofessional Conduct.
"Unprofessional conduct" includes:
(1) engaging in business as an employee leasing company with a leased employee or client company for which there is not in place a signed contract in form and substance as required by the division under R156-59-304; or
(2) using one's position as a member of the Employee Leasing Company Licensing Board in any advertisement or representation related to that individual engaging in business as or for an employee leasing company or client company, or in any other way intend to use that position for influence for other than legitimate business of the board.
[Indexing]
KEY: licensing, employee leasing company*
May 4, 1998
[Editor's note: Below are references
to the Utah Code that are listed by the
agency making this rule as authority
for the rule.]
58-1-106
(1)
58-1-202
(1)
58-59-101
Notice of Continuation January 27, 1998
