65.2-803.1 - Requirements for registration as professional employer organization; annual assessment.
§ 65.2-803.1. Requirements for registration as professional employerorganization; annual assessment.
A. Any business entity desiring to engage in the business of providingprofessional employer services shall register with the Commission before anysuch services may be provided. The Commission may require any business entityhaving a controlling ownership interest in or sharing common ownership with aprofessional employer organization providing professional employer servicesin the Commonwealth to guarantee, in a form prescribed by the Commission,performance of all obligations pursuant to this title, including the paymentof workers' compensation benefits.
B. Each registered professional employer organization shall notify theCommission and the Bureau of Insurance of the State Corporation Commissionwithin 30 calendar days of all new or terminated, in whole or in part, clientcompanies. Upon registration and annually thereafter, each registeredprofessional employer organization shall notify the Commission and the Bureauof Insurance of the State Corporation Commission of all client companies.Such notice shall be confidential and shall not be disclosed to the public,provided that the Commission may respond to inquiries as to whether a clientcompany has workers' compensation coverage; however, nothing herein shall beinterpreted to prohibit or limit the production of documents containing suchinformation from the professional employer organization pursuant to anotherwise lawful subpoena issued by a court of competent jurisdiction. Eachsuch notification shall indicate, by client company, if the professionalemployer organization will provide voluntary market workers' compensationinsurance and whether the client company will obtain separate workers'compensation insurance. The Commission may require such other information asit deems necessary for the administration of this section.
C. All agreements for professional employer services shall be in writing andshall provide a description of the respective rights and obligations of theprofessional employer organization and the client company. The professionalemployer organization shall provide a written summary of such rights andobligations to each coemployee, including information concerning filing forworkers' compensation and unemployment benefits. No agreement forprofessional employer services shall alter or affect the terms and conditionsof any collective bargaining agreement between the client company and itsemployees without the consent of the parties to such collective bargainingagreement.
D. A professional employer organization that is registered with theCommission and operating in compliance with the requirements of this sectionshall be deemed to be an employer of its coemployees and may assumeresponsibilities as an employer of its coemployees for the term of itsagreement with a client company. A professional employer organization maysecure and provide all required voluntary market workers' compensationinsurance for its coemployees under a master workers' compensation insurancepolicy in the name of the professional employer organization.
E. A professional employer organization shall notify in writing the clientcompany and coemployees of its intent to terminate any agreement forprofessional employer services with a client company at the time of or priorto termination. Such notice shall advise the client company of its obligationto secure workers' compensation coverage. The professional employerorganization shall provide a copy of such notice to the Commission and theinsurer at the time notice is given to the client company. Workers'compensation insurance coverage shall continue until termination or forfifteen calendar days after receipt of notice of termination by both theCommission and the client company, whichever is later. This section shall notalter the notice obligations of an insurer seeking to cancel workers'compensation coverage pursuant to subsection B of § 65.2-804. If aprofessional employer organization has received notice that its workers'compensation insurance policy will be cancelled or nonrenewed, theprofessional employer organization shall notify the client companies withinseven calendar days after receipt of the notice. Failure of the professionalemployer organization to provide such notice to the client companiessubrogates the Commission, upon payment of a claim from the UninsuredEmployer's Fund to any coemployee of a client company that did not receivenotice, to any right to recover damages which the injured coemployee or hispersonal representative may have against the professional employerorganization.
F. This section shall not exempt a client company from any other licenserequirements imposed under federal, state, or local law, and a coemployeeshall be recognized as an employee of the client company for all purposes.For purposes of licensing requirements, a professional employer organizationshall not be deemed to be engaged in the occupation, trade or profession ofthe client company solely through the provision of professional employerservices to that client company.
G. Where a professional employer organization or a staffing service hasobtained workers' compensation insurance to secure its obligations under thistitle with respect to compensation on account of injury or death by accident,the rights and remedies available to the employee or coemployee under thistitle shall be exclusive as to both the client company and the professionalemployer organization or staffing service in accordance with this title.
H. A professional employer organization that fails to comply with theprovisions of this title or with the regulations of the Commission shall besubject to the requirements of Chapter 9 (§ 65.2-900 et seq.) of this title.The Commission is authorized to revoke or suspend any registration hereunderif the professional employer organization fails to comply with the provisionsof this title or with the regulations of the Commission. If a registration isrevoked as herein provided, the Commission may allow the professionalemployer organization to reregister upon application therefor if, when andafter the conditions upon which revocation was based have been corrected andthe professional employer organization has complied with all provisions ofthis title and applicable regulations. Whenever a registration is revoked orsuspended the Commission may request the Office of the Attorney General topetition the circuit court of the jurisdiction in which the professionalemployer organization is located for an injunction to cause such professionalemployer organization to cease providing professional employer services.Suspension of a registration shall in all cases be for an indefinite time andthe suspension may be lifted and rights under the registration fully orpartially restored at such time as the Commission determines that the rightsof the registrant appear to so require and the interests of the public willnot be jeopardized by resumption of operation.
I. Notwithstanding any provision of this title to the contrary, eachregistered professional employer organization shall be assessed annually bythe Commission, in addition to any other assessments provided in this title,an assessment in an amount not to exceed the sums necessary for theregistration and supervision of all professional employer organizations. Theassessment shall be apportioned and assessed and paid in proportion to theaggregate of the annual payroll of all coemployees shared by or assigned orallocated to the professional employer organization.
J. The Bureau of Insurance of the State Corporation Commission may requestand shall receive information filed with the Commission by a professionalemployer organization. Such information shall be confidential and shall beused solely for informational purposes by the Bureau of Insurance and itsstaff.
K. No person shall sell, solicit, or negotiate, as those terms are defined in§ 38.2-1800, contracts of insurance for or on behalf of a professionalemployer organization unless such person is licensed for that class ofinsurance as an insurance agent, as defined in § 38.2-1800.
L. The Commission may promulgate regulations as it deems necessary for theadministration of this section.
(2000, cc. 624, 718; 2001, c. 706; 2002, c. 469; 2005, c. 158.)