No. 30104 (Amendment): R994-405-3. Professional Employment Organizations (PEO)

DAR File No.: 30104
Filed: 06/15/2007, 05:27
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of this amendment is to clarify provisions based on comments received after the last amendment.

Summary of the rule or change:

This rule relates to Professional Employment Organizations (PEO). The Department filed a proposed amendment on 04/20/2007. Based on the comments received, two new provisions are added which explain that a letter is not required if the PEO does not intend to continue employment and that if a claimant does not report back to the PEO for a new assignment after receipt of the letter it will be considered a quit. It was the Department's intent to treat cases this way but based on comments received it was not clear. This proposed amendment makes the rule more clear and hopefully satisfies the concerns from the comments. It is the Department's intent to make the amendment filed on 04/20/2007 effective on 08/07/2007, and this amendment effective 08/08/2007.

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 so there are no costs or savings to the state budget.

local governments:

This is a federally-funded program so there are no costs of savings to local government.

other persons:

There are no costs or savings to any other persons as there are no fees associated with this program and it is federally funded.

Compliance costs for affected persons:

There are no costs or savings to any affected persons as there are no fees associated with this program and it is federally funded. These changes will not impact any employer's contribution rate.

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:

07/31/2007

This rule may become effective on:

08/08/2007

Authorized by:

Kristen Cox, Executive Director

RULE TEXT

R994. Workforce Services, Unemployment Insurance.

R994-405. Ineligibility for Benefits.

R994-405-3 Professional Employment Organizations (PEO).

(1) PEO is defined in R994-202-106 and must be registered pursuant to Sections 58-59-101 et seq. PEOs are also known as employee 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 [required]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 [required]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: 2007

Notice of Continuation: June 27, 2002

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