No. 31974 (Amendment): R994-405-3. Professional Employment Organizations (PEO)

DAR File No.: 31974
Filed: 09/29/2008, 03:27
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of this nonsubstantive change is to reflect changes in legislation.

Summary of the rule or change:

H.B. 159 in the 2008 General Session changed the provisions regarding Professional Employer Organizations (PEO). These proposed amendments are being made to reflect those legislative changes. (DAR NOTE: H.B. 159 (2008) is found at Chapter 318, Laws of Utah 2008, and was effective 05/05/2008.)

State statutory or constitutional authorization for this rule:

Section 35A-1-104 and Subsections 35A-1-104(4) and 35A-4-502(1)(b)

Anticipated cost or savings to:

the state budget:

This is a federally-funded program and there will be no costs or savings to the state budget. There are no changes in this proposed amendment except those that reflect the legislation.

local governments:

This is a federally-funded program and there will be no costs or savings to any local government. There are no changes in this proposed amendment except those that reflect the legislation.

small businesses and persons other than businesses:

This is a federally-funded program and there will be no costs or savings to any small business or other persons. There are no changes in this proposed amendment except those that reflect the legislation.

Compliance costs for affected persons:

This is a federally-funded program and there will be no compliance costs associated with this change. There are no changes in this proposed amendment except those that reflect the legislation.

Comments by the department head on the fiscal impact the rule may have on businesses:

There are no compliance costs associated with this change. There are no fees associated with this change. There will be no cost to anyone to comply with these changes. There will be no fiscal impact on any business. These changes will have no impact on any employer's contribution tax rate. Kristen Cox, Executive Director

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Workforce Services
Unemployment Insurance
140 E 300 S
SALT LAKE CITY UT 84111-2333

Direct questions regarding this rule to:

Suzan Pixton at the above address, by phone at 801-526-9645, by FAX at 801-526-9211, or by Internet E-mail at [e-mail]

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

11/14/2008

This rule may become effective on:

11/21/2008

Authorized by:

Kristen Cox, Executive Director

RULE TEXT

R994. Workforce Services, Unemployment Insurance.

R994-405. Ineligibility for Benefits.

R994-405-3.Professional [Employment]Employer Organizations (PEO).

(1)PEO is defined in R994-202-106 and must be [registered]licensed pursuant to Sections [58-59-101]31A-40-301 through 306 et seq.PEOs are also known as employee leasing companies and staff leasing companies. PEOs are treated differently from a THC because the assignments are usually not of a temporary nature.

(2)When a client company contracts with a PEO, the PEO becomes the employer of the client company's employees.Because the client company is no longer the employer, a job separation has occurred.The job separation is a reduction of force and the client company is not eligible for relief of charges.

(3)When the contract between a PEO and a client company ends, a separation occurs.Regardless of the circumstances or which entity is the moving party, the affected employees are considered separated due to a reduction of force, and the PEO is not eligible for relief of charges.Any offers of work extended to affected employees subsequent to the termination of the contract shall be considered offers of new work and shall be adjudicated in accordance with 35A-4-405(3) and R994-405-301 et seq.

(4)If the contract between the client company and the PEO remains in effect and the claimant's assignment with the client company ends, the PEO, or the client company acting on the PEO's behalf, must provide written notice to the claimant instructing the claimant to contact the PEO within a reasonable time for a new assignment.A reasonable time to contact the PEO is generally considered to be two working days after the assignment ends.The written notice must be provided to the claimant when the assignment ends and must be provided even if the PEO has a contract with the claimant requiring the claimant to contact the PEO when an assignment ends.

(5)If the PEO or client company does not provide written notice as referenced in paragraph (4) of this section, unemployment benefits will be determined based on the reason the assignment with the client company ended.

(6)If the PEO provides the notice referenced in paragraph (4) of this section and the claimant contacts the PEO as instructed and:

(a)refuses a new work assignment that is similar to the claimant's previous assignments with the PEO, the job separation is a quit. The duties, wages, hours, and conditions of the new assignment will be considered in determining if the new assignment is similar to the previous assignments.

(b)refuses a new work assignment that is substantially different from the claimant's previous assignments, the job separation is a layoff and an offer of new work.

(c)the PEO has no new assignments, the job separation is a layoff.

(7)If the PEO does not intend to offer the claimant another assignment the PEO should not provide the written notice referenced in paragraph (4) of this section at the time of separation.If no notice is provided, the separation will be determined based on the reason for the separation from the client company.

(8)If the claimant does not contact the PEO after receiving notice given pursuant to paragraph (4) of this section, the job separation is a quit.

 

KEY: unemployment compensation, employment, employee's rights, employee termination

Date of Enactment or Last Substantive Amendment:[November 15, 2007]2008

Notice of Continuation:June 26, 2007

Authorizing, and Implemented or Interpreted Law:35A-4-502(1)(b); 35A-1-104(4); 35A-4-405