As Introduced

129th General Assembly Regular Session 2011-2012

S. B. No. 139

Senator Hughes 

Cosponsors: Senators Schaffer, Seitz, Patton 

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A BILL

To amend sections 4123.291, 4125.01, 4125.02,

1

4125.03, 4125.05, 4125.07, 4125.08, 4141.24, and

2

5747.07 and to enact sections 4125.041, 4125.042,

3

4125.051, 4125.10, and 4125.11 of the Revised Code

4

to establish certain financial capacity

5

requirements for professional employer

6

organizations, clarify rights and liabilities of

7

professional employer organizations and client

8

employers, and make other changes to the

9

professional employer organization law.

10

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1. That sections 4123.291, 4125.01, 4125.02, 4125.03,	11
4125.05, 4125.07, 4125.08, 4141.24, and 5747.07 be amended and	12
sections 4125.041, 4125.042, 4125.051, 4125.10, and 4125.11 of the	13
Revised Code be enacted to read as follows:	14

Sec. 4123.291.  (A) An adjudicating committee appointed by	15
the administrator of workers' compensation to hear any matter	16
specified in divisions (B)(1) to (7) of this section shall hear	17
the matter within sixty days of the date on which an employer	18
files the request, protest, or petition. An employer desiring to	19
file a request, protest, or petition regarding any matter	20
specified in divisions (B)(1) to (7) of this section shall file	21
the request, protest, or petition to the adjudicating committee on	22
or before twenty-four months after the administrator sends notice	23
of the determination about which the employer is filing the	24
request, protest, or petition.	25

(B) An employer who is adversely affected by a decision of an	26
adjudicating committee appointed by the administrator may appeal	27
the decision of the committee to the administrator or the	28
administrator's designee. The employer shall file the appeal in	29
writing within thirty days after the employer receives the	30
decision of the adjudicating committee. The administrator or the	31
designee shall hear the appeal and hold a hearing, provided that	32
the decision of the adjudicating committee relates to one of the	33
following:	34

(1) An employer request for a waiver of a default in the	35
payment of premiums pursuant to section 4123.37 of the Revised	36
Code;	37

(2) An employer request for the settlement of liability as a	38
noncomplying employer under section 4123.75 of the Revised Code;	39

(3) An employer petition objecting to the assessment of a	40
premium pursuant to section 4123.37 of the Revised Code and the	41
rules adopted pursuant to that section;	42

(4) An employer request for the abatement of penalties	43
assessed pursuant to section 4123.32 of the Revised Code and the	44
rules adopted pursuant to that section;	45

(5) An employer protest relating to an audit finding or a	46
determination of a manual classification, experience rating, or	47
transfer or combination of risk experience;	48

(6) Any decision relating to any other risk premium matter	49
under Chapters 4121., 4123., and 4131. of the Revised Code;	50

(7) An employer petition objecting to the amount of security	51
required under division (C)(D) of section 4125.05 of the Revised	52
Code and the rules adopted pursuant to that section.	53

(C) The bureau of workers' compensation board of directors,	54
based upon recommendations of the workers' compensation actuarial	55
committee, shall establish the policy for all adjudicating	56
committee procedures, including, but not limited to, specific	57
criteria for manual premium rate adjustment.	58

Sec. 4125.01. As used in this chapter:

59

(A) "Client employer" means a sole proprietor, partnership,	60
association, limited liability company, or corporation that enters	61
into a professional employer organization agreement and is	62
assigned shared employees by the professional employer	63
organization.	64

(B) "Coemploy" means the sharing of the responsibilities and	65
liabilities of being an employer.	66

(C) "Professional employer organization" means a sole	67
proprietor, partnership, association, limited liability company,	68
or corporation that enters into an agreement with one or more	69
client employers for the purpose of coemploying all or part of the	70
client employer's workforce at the client employer's work site.	71

(D) "Professional employer organization agreement" means a	72
written contract to coemploy employees between a professional	73
employer organization and a client employer with a duration of not	74
less than twelve months in accordance with the requirements of	75
this chapter.	76

(E) "Professional employer organization reporting entity"	77
means two or more professional employer organizations that are	78
majority owned or commonly controlled by the same entity, parent,	79
or controlling person and that satisfy reporting entity control	80
rules as defined by the financial accounting standards board and	81
under generally accepted accounting principles.	82

(F) "Shared employee" means an individual intended to be	83
assigned to a client employer on a permanent basis, not as a	84
temporary supplement to the client employer's workforce, who is	85
coemployed by a professional employer organization and a client	86
employer pursuant to a professional employer organization	87
agreement.	88

(F)(G) "Trade secret" has the same meaning as in section	89
1333.61 of the Revised Code.	90

Sec. 4125.02. The administrator of the bureau of workers'	91
compensation shall adopt rules in accordance with Chapter 119. of	92
the Revised Code to administer and enforce this chapter, including	93
rules to administer and enforce divisions (B) and (G) of section	94
4125.03 of the Revised Code.	95

The administrator may adopt rules for the acceptance of	96
electronic filings in accordance with Chapter 1306. of the Revised	97
Code for applications, documents, reports, and other filings	98
required by this chapter.	99

The administrator may adopt rules allowing an independent	100
assurance organization to act on behalf of a professional employer	101
organization in complying with this chapter and any rules adopted	102
under it. Those rules shall require that the assurance	103
organization be approved by the administrator before acting under	104
the rules and shall include standards and procedures for that	105
approval. The rules also shall permit a professional employer	106
organization to authorize an assurance organization approved by	107
the administrator to act on behalf of the professional employer	108
organization, and the rules shall specify certain provisions of	109
this chapter that may be satisfied by an assurance organization	110
acting with that authority.	111

Sec. 4125.03. (A) The professional employer organization with	112
whom a shared employee is coemployed shall do all of the	113
following:	114

(1) Pay wages associated with a shared employee pursuant to	115
the terms and conditions of compensation in the professional	116
employer organization agreement between the professional employer	117
organization and the client employer;	118

(2) Pay all related payroll taxes associated with a shared	119
employee independent of the terms and conditions contained in the	120
professional employer organization agreement between the	121
professional employer organization and the client employer;	122

(3) Maintain workers' compensation coverage, pay all workers'	123
compensation premiums and manage all workers' compensation claims,	124
filings, and related procedures associated with a shared employee	125
in compliance with Chapters 4121. and 4123. of the Revised Code,	126
except that when shared employees include family farm officers,	127
ordained ministers, or corporate officers of the client employer,	128
payroll reports shall include the entire amount of payroll	129
associated with those persons;	130

(4) Provide written notice to each shared employee it assigns	131
to perform services to a client employer of the relationship	132
between and the responsibilities of the professional employer	133
organization and the client employer;	134

(5) Maintain complete records separately listing the manual	135
classifications of each client employer and the payroll reported	136
to each manual classification for each client employer for each	137
payroll reporting period during the time period covered in the	138
professional employer organization agreement;	139

(6) Maintain a record of workers' compensation claims for	140
each client employer;	141

(7) Within fourteen days after receiving notice from the	142
bureau of workers' compensation that a refund or rebate will be	143
applied to workers' compensation premiums, provide a copy of that	144
notice to any client employer to whom that notice is relevant.	145

(B) The professional employer organization with whom a shared	146
employee is coemployed shall provide a list of all of the	147
following information to the client employer upon the written	148
request of the client employer:	149

(1) All workers' compensation claims associated with that	150
client employer;	151

(2) Compensation and benefits paid and reserves established	152
for each claim listed under division (B)(1) of this section;	153

(3) Any other information available to the professional	154
employer organization from the bureau of workers' compensation	155
regarding that client employer.	156

(C)(1) A professional employer organization shall provide the	157
information required under division (B) of this section in writing	158
to the requesting client employer within sixty days after	159
receiving a written request from the client employer.	160

(2) For purposes of division (C) of this section, a	161
professional employer organization has provided the required	162
information to the client employer when the information is	163
received by the United States postal service or when the	164
information is personally delivered directly to the client	165
employer.	166

(D) Except as provided in section 4125.08 of the Revised Code	167
and unless otherwise agreed to in the professional employer	168
organization agreement, the professional employer organization	169
with whom a shared employee is coemployed has a right of direction	170
and control over each shared employee assigned to a client	171
employer's location. However, a client employer shall retain	172
sufficient direction and control over a shared employee as is	173
necessary to do any of the following:	174

(1) Conduct the client employer's business, including	175
training and supervising shared employees;	176

(2) Ensure the quality, adequacy, and safety of the goods or	177
services produced or sold in the client employer's business;	178

(3) Discharge any fiduciary responsibility that the client	179
employer may have;	180

(4) Comply with any applicable licensure, regulatory, or	181
statutory requirement of the client employer.	182

(C) Notwithstanding division (B) of this section, a client	183
employer may retain sufficient direction and control over a shared	184
employee as is necessary to conduct the client employer's business	185
and to discharge any fiduciary responsibility that it may have, or	186
to comply with any applicable licensure, regulatory, or statutory	187
requirement of the client employer	188

(E) Unless otherwise agreed to in the professional employer	189
organization agreement, liability for acts, errors, and omissions	190
shall be determined as follows:	191

(1) A professional employer organization shall not be liable	192
for the acts, errors, and omissions of a client employer or a	193
shared employee when those acts, errors, and omissions occur under	194
the direction and control of the client employer.	195

(2) A client employer shall not be liable for the acts,	196
errors, and omissions of a professional employer organization or a	197
shared employee when those acts, errors, and omissions occur under	198
the direction and control of the professional employer	199
organization.	200

(F) Nothing in divisions (D) and (E) of this section shall be	201
construed to limit any liability or obligation specifically agreed	202
to in the professional employer organization agreement.	203

(G) No professional employer organization shall coemploy an	204
individual who is an independent contractor of the client employer	205
or knowingly misclassify a shared employee as an independent	206
contractor. A client employer is solely responsible for the proper	207
classification and compliance with all state laws with regard to	208
the classification of an individual as an independent contractor.	209
As used in this division, "independent contractor" means an	210
individual who contracts with a client employer to perform labor	211
or services for the client employer and who satisfies less than	212
ten of the criteria listed in division (A)(1)(c) of section	213
4123.01 of the Revised Code or less than ten of the criteria	214
listed in division (B)(2)(k) of section 4141.01 of the Revised	215
Code.	216

Sec. 4125.041.  A shared employee under a professional	217
employer organization agreement shall not, solely as a result of	218
being a shared employee, be considered an employee of the	219
professional employer organization for purposes of general	220
liability insurance, fidelity bonds, surety bonds, employer	221
liability not otherwise covered by Chapters 4121. and 4123. of the	222
Revised Code, or liquor liability insurance carried by the	223
professional employer organization, unless the professional	224
employer organization agreement and applicable prearranged	225
employment contract, insurance contract, or bond specifically	226
states otherwise.	227

Sec. 4125.042.  (A) For purposes of determining tax credits	228
and other economic incentives that are provided by this state or	229
any political subdivision and based on employment, shared	230
employees under a professional employer organization agreement	231
shall be considered employees solely of the client employer.	232

(1) A client employer shall be entitled to the benefit of any	233
tax credit, economic incentive, or similar benefit arising as the	234
result of the client employer's employment of shared employees. If	235
the grant or amount of any tax credit, economic incentive, or	236
other benefit is based on number of employees, each client	237
employer shall be treated as employing only those shared employees	238
coemployed by the client employer. Shared employees working for	239
other client employers of the professional employer organization	240
shall not be counted as employees for that purpose.	241

(2) Upon request by a client employer or an agency or	242
department of this state, a professional employer organization	243
shall provide employment information reasonably required by the	244
agency or department responsible for administration of the tax	245
credit or economic incentive and necessary to support any request,	246
claim, application, or other action by a client employer seeking	247
the tax credit or economic incentive.	248

(B) Shared employees whose services are subject to sales tax	249
shall be considered the employees of the client employer for	250
purposes of collecting and levying sales tax on the services	251
performed by the shared employee. Nothing contained in this	252
chapter shall relieve a client employer of any sales tax liability	253
with respect to its goods or services.	254

(C) Any tax assessed on a per capita or per employee basis	255
shall be assessed against the client employer for shared employees	256
and against the professional employer organization for employees	257
of the professional employer organization who are not shared	258
employees coemployed with a client employer.	259

(D) For purposes of computing any tax that is imposed or	260
calculated upon the basis of total payroll, the professional	261
employer organization shall be eligible to use any small business	262
allowance or exemption that is available to the client employer	263
for the shared employees.	264

Sec. 4125.05. (A) Not later than thirty days after November	265
5, 2004, or not later than thirty days after the formation of a	266
professional employer organization, whichever date occurs later, a	267
professional employer organization operating in this state shall	268
register with the administrator of the bureau of workers'	269
compensation on forms provided by the administrator. Following	270
initial registration, each professional employer organization	271
shall register with the administrator annually on or before the	272
thirty-first day of December.	273

(B) Initial registration and each annual registration renewal	274
shall include all of the following:	275

(1) A list of each of the professional employer	276
organization's client employers current as of the date of	277
registration for purposes of initial registration or current as of	278
the date of annual registration renewal, or within fourteen days	279
of adding or releasing a client, that includes the client	280
employer's name, address, federal tax identification number, and	281
bureau of workers' compensation risk number;	282

(2) A fee as determined by the administrator;

283

(3) The name or names under which the professional employer	284
organization conducts business;	285

(4) The address of the professional employer organization's	286
principal place of business and the address of each office it	287
maintains in this state;	288

(5) The professional employer organization's taxpayer or	289
employer identification number;	290

(6) A list of each state in which the professional employer	291
organization has operated in the preceding five years, and the	292
name, corresponding with each state, under which the professional	293
employer organization operated in each state, including any	294
alternative names, names of predecessors, and if known, successor	295
business entities;	296

(7) A financial statement prepared and audited in accordance	297
with division (B) of section 4125.051 of the Revised Code;	298

(8) If there is any deficit in the working capital required	299
under division (A) of section 4125.051 of the Revised Code, a	300
bond, irrevocable letter of credit, or securities with a minimum	301
market value in an amount sufficient to cover the deficit in	302
accordance with the requirements of that section.	303

(C) Upon terms and for periods that the administrator	304
considers appropriate, the administrator may issue a limited	305
registration to a professional employer organization or	306
professional employer organization reporting entity that provides	307
all of the following items:	308

(1) A properly executed request for limited registration on a	309
form provided by the administrator;	310

(2) All information and materials required for registration	311
in divisions (B)(1) to (6) of this section;	312

(3) Information and documentation necessary to show that the	313
professional employer organization or professional employer	314
organization reporting entity satisfies all of the following	315
criteria:	316

(a) It is domiciled outside of this state.

317

(b) It is licensed or registered as a professional employer	318
organization in another state.	319

(c) It does not maintain an office in this state.

320

(d) It does not participate in direct solicitations for	321
client employers located or domiciled in this state.	322

(e) It has fifty or fewer shared employees employed or	323
domiciled in this state on any given day.	324

(D)(1) The administrator, with the advice and consent of the	325
bureau of workers' compensation board of directors, shall adopt	326
rules in accordance with Chapter 119. of the Revised Code to	327
require, in addition to the requirement under division (B)(8) of	328
this section and except as otherwise specified in division	329
(C)(D)(2) of this section, a professional employer organization to	330
provide security in the form of a bond or letter of credit	331
assignable to the Ohio bureau of workers' compensation not to	332
exceed an amount equal to the premiums and assessments incurred	333
for the two most recent payroll periods, prior to any discounts or	334
dividends, to meet the financial obligations of the professional	335
employer organization pursuant to this chapter and Chapters 4121.	336
and 4123. of the Revised Code.	337

(2) As an alternative to providing security in the form of a	338
bond or letter of credit under division (D)(1) of this section,	339
the administrator shall permit a professional employer	340
organization to make periodic payments of prospective premiums and	341
assessments to the bureau or to submit proof of being certified by	342
either a nationally recognized organization that certifies	343
professional employer organizations or by a government entity	344
approved by the administrator.	345

(3) A professional employer organization may appeal the	346
amount of the security required pursuant to rules adopted under	347
division (C)(D)(1) of this section in accordance with section	348
4123.291 of the Revised Code.	349

(D)(E) Notwithstanding division (C)(D) of this section, a	350
professional employer organization that qualifies for	351
self-insurance or retrospective rating under section 4123.29 or	352
4123.35 of the Revised Code shall abide by the financial	353
disclosure and security requirements pursuant to those sections	354
and the rules adopted under those sections in place of the	355
requirements specified in division (C)(D) of this section or	356
specified in rules adopted pursuant to that division.	357

(E)(F) Except to the extent necessary for the administrator	358
to administer the statutory duties of the administrator and for	359
employees of the state to perform their official duties, all	360
records, reports, client lists, and other information obtained	361
from a professional employer organization and professional	362
employer organization reporting entity under divisions (A), (B),	363
and (B)(C) of this section are confidential and shall be	364
considered trade secrets and shall not be published or open to	365
public inspection.	366

(F)(G) The list described in division (B)(1) of this section	367
shall be considered a trade secret.	368

(G)(H) The administrator shall establish the fee described in	369
division (B)(2) of this section in an amount that does not exceed	370
the cost of the administration of the initial and renewal	371
registration process.	372

(I) A financial statement required under division (B)(7) of	373
this section for initial registration shall be the most recent	374
financial statement of the professional employer organization or	375
professional employer organization reporting entity of which the	376
professional employer organization is a member and shall not be	377
older than thirteen months. For each registration renewal, the	378
professional employer organization shall file the required	379
financial statement within one hundred eighty days after the end	380
of the professional employer organization's or professional	381
employer organization reporting entity's fiscal year. A	382
professional employer organization may apply to the administrator	383
for an extension beyond that time if the professional employer	384
organization provides the administrator with a letter from the	385
professional employer organization's auditor stating the reason	386
for delay and the anticipated completion date.	387

(J) Multiple, unrelated professional employer organizations	388
shall not combine together for purposes of obtaining workers'	389
compensation coverage or for forming any type of self-insurance	390
arrangement available under this chapter. Multiple, unrelated	391
professional employer organization reporting entities shall not	392
combine together for purposes of obtaining workers' compensation	393
coverage or for forming any type of self-insurance arrangement	394
available under this chapter.	395

(K) The administrator shall maintain a list of professional	396
employer organizations and professional employer organization	397
reporting entities registered under this section that is readily	398
available to the public by electronic or other means.	399

Sec. 4125.051. (A) A professional employer organization, or a	400
professional employer organization reporting entity of which the	401
professional employer organization is a member, shall maintain	402
positive working capital as defined by generally accepted	403
accounting principles. If a deficit in working capital exists at	404
any time, the professional employer organization or the	405
professional employer organization reporting entity shall do both	406
of the following:	407

(1) Obtain a bond, irrevocable letter of credit, or	408
securities with a minimum market value in an amount sufficient to	409
cover the deficit in working capital;	410

(2) Submit to the administrator of workers' compensation a	411
quarterly financial statement for each calendar quarter during	412
which there is a deficit in working capital, accompanied by an	413
attestation of the chief executive officer of the professional	414
employer organization that all wages, taxes, workers' compensation	415
premiums, and employee benefits have been paid by the professional	416
employer organization or members of the professional employer	417
organization reporting entity.	418

The bond, letter of credit, or securities required under	419
division (A)(1) of this section shall be held by a depository	420
designated by the administrator and shall secure payment by the	421
professional employer organization of all taxes, wages, benefits,	422
or other entitlements due or otherwise pertaining to shared	423
employees, if the professional employer organization does not make	424
those payments when due.	425

(B) A professional employer organization, or a professional	426
employer organization reporting entity of which the professional	427
employer organization is a member, shall prepare a financial	428
statement for registration and registration renewal under section	429
4125.05 of the Revised Code in accordance with generally accepted	430
accounting principles. The financial statement shall clearly	431
demonstrate the professional employer organization's or	432
professional employer organization reporting entity's compliance	433
with the financial capacity requirements of division (A) of this	434
section and shall be unqualified as to the going concern status of	435
the professional employer organization or professional employer	436
organization reporting entity.	437

The financial statement shall be audited by an independent	438
certified public accountant authorized to practice in the	439
jurisdiction in which that accountant is located. However, if a	440
professional employer organization does not have at least twelve	441
months of operating history on which to base an audit, the	442
financial statement shall be reviewed by a certified public	443
accountant.	444

(C) Professional employer organizations in a professional	445
employer organization reporting entity may satisfy the	446
requirements of this section on a combined or consolidated basis	447
provided that each member of the professional employer	448
organization reporting entity guarantees each other members'	449
satisfaction of the requirements under division (A) of this	450
section.	451

For purposes of satisfying the registration and registration	452
renewal requirements described in division (B)(7) of section	453
4125.05 of the Revised Code, a professional employer organization	454
reporting entity may submit a combined or consolidated financial	455
statement that satisfies the requirements of this section. If the	456
combined or consolidated financial statement includes entities	457
that are not professional employer organizations or that are not	458
in the professional employer organization reporting entity, the	459
controlling entity of the professional employer organization	460
reporting entity that is submitting the consolidated or combined	461
financial statement shall guarantee that the professional employer	462
organizations of the professional employer organization reporting	463
entity have satisfied the requirements under division (A) of this	464
section and shall include supplemental combining schedules to	465
guarantee that the requirements under division (A) of this section	466
are satisfied by the professional employer organization or	467
professional employer organization reporting entity.	468

Sec. 4125.07. Not later than fourteen calendar days after the	469
date on which a professional employer organization agreement is	470
terminated, the professional employer organization is adjudged	471
bankrupt, the professional employer organization ceases operations	472
within the state of Ohio, or the registration of the professional	473
employer organization is revoked, the professional employer	474
organization shall submit to the administrator of the bureau of	475
workers' compensation and each client employer associated with	476
that professional employer organization a completed workers'	477
compensation lease termination notice form provided by the	478
administrator. The completed form shall include all client payroll	479
and claim information listed in a format specified by the	480
administrator and notice of all workers' compensation claims that	481
have been reported to the professional employer organization in	482
accordance with its internal reporting policies.	483

A professional employer organization shall report any	484
transfer of employees between related professional employer	485
organization entities or professional employer organization	486
reporting entities to the administrator within fourteen calendar	487
days after the date of the transfer on a form prescribed by the	488
administrator. The professional employer organization or	489
professional employer organization reporting entity shall include	490
in the form all client payroll and claim information regarding the	491
transferred employees listed in a format specified by the	492
administrator and a notice of all workers' compensation claims	493
that have been reported to the professional employer organization	494
or professional employer organization reporting entity in	495
accordance with the internal reporting policies of the	496
professional employer organization or professional employer	497
organization reporting entity.	498

Sec. 4125.08. Nothing in this chapter exempts a professional	499
employer organization, client employer, or shared employee from	500
any applicable federal, state, or local licensing, registration,	501
or certification statutes or regulations. An individual required	502
to obtain and maintain a license, registration, or certification	503
under law and who is a shared employee of a professional employer	504
organization and a client employer is an employee of the client	505
employer for purposes of obtaining and maintaining the appropriate	506
license, registration, or certification as required by law. A	507
professional employer organization does not engage in any	508
occupation, trade, or profession that requires a license,	509
certification, or registration solely by entering into a	510
professional employer agreement with a client employer or	511
coemploying a shared employee.	512

A client employer shall have the sole right of direction and	513
control of the professional or licensed activities of shared	514
employees and of the client employer's business. The shared	515
employees and client employers shall remain subject to regulation	516
by the board, commission, or agency responsible for licensing,	517
registration, or certification of the shared employees or client	518
employers.	519

Sec. 4125.10.  Nothing contained in this chapter or in any	520
professional employer organization agreement shall do any of the	521
following:	522

(A) Diminish, abolish, or remove the rights and obligations	523
of client employers and shared employees existing prior to the	524
effective date of the professional employer organization	525
agreement;	526

(B) Affect, modify, or amend any contractual relationship or	527
restrictive covenant between a shared employee and any client	528
employer in effect at the time a professional employer	529
organization agreement becomes effective;	530

(C) Prohibit or amend any contractual relationship or	531
restrictive covenant between a client employer and a shared	532
employee that is entered into after the professional employer	533
organization agreement becomes effective;	534

(D) Create any new or additional enforcement right of a	535
shared employee against a professional employer organization that	536
is not specifically provided by the professional employer	537
organization agreement or this chapter.	538

A professional employer organization shall have no	539
responsibility or liability in connection with, or arising out of,	540
any contractual relationship or restrictive covenant between a	541
client employer and a shared employee unless the professional	542
employer organization has specifically agreed otherwise in	543
writing.	544

Sec. 4125.11.  For purposes of a bid, contract, purchase	545
order, or agreement entered into with the state or any political	546
subdivision, a client employer's status or certification as a	547
small, minority-owned, disadvantaged, or woman-owned business	548
enterprise or as a historically underutilized business shall not	549
be affected as a result of the client employer entering into a	550
professional employer organization agreement or using the services	551
of a professional employer organization.	552

Sec. 4141.24.  (A)(1) The director of job and family services	553
shall maintain a separate account for each employer and, except as	554
otherwise provided in division (B) of section 4141.25 of the	555
Revised Code respecting mutualized contributions, shall credit	556
such employer's account with all the contributions, or payments in	557
lieu of contributions, which the employer has paid on the	558
employer's own behalf.	559

(2) If, as of the computation date, a contributory employer's	560
account shows a negative balance computed as provided in division	561
(A)(3) of section 4141.25 of the Revised Code, less any	562
contributions due and unpaid on such date, which negative balance	563
is in excess of the limitations imposed by divisions (A)(2)(a),	564
(b), and (c) of this section and if the employer's account is	565
otherwise eligible for the transfer, then before the employer's	566
contribution rate is computed for the next succeeding contribution	567
period, an amount equal to the amount of the excess eligible for	568
transfer shall be permanently transferred from the account of such	569
employer and charged to the mutualized account provided in	570
division (B) of section 4141.25 of the Revised Code.	571

(a) If as of any computation date, a contributory employer's	572
account shows a negative balance in excess of ten per cent of the	573
employer's average annual payroll, then before the employer's	574
contribution rate is computed for the next succeeding contribution	575
period, an amount equal to the amount of the excess shall be	576
transferred from the account as provided in this division. No	577
contributory employer's account may have any excess transferred	578
pursuant to division (A)(2)(a) of this section, unless the	579
employer's account has shown a positive balance for at least two	580
consecutive computation dates prior to the computation date with	581
respect to which the transfer is proposed. Each time a transfer is	582
made pursuant to division (A)(2)(a) of this section, the	583
employer's account is ineligible for any additional transfers	584
under that division, until the account shows a positive balance	585
for at least two consecutive computation dates subsequent to the	586
computation date of which the most recent transfer occurs pursuant	587
to division (A)(2)(a), (b), or (c) of this section.	588

(b) If at the next computation date after the computation	589
date at which a transfer from the account occurs pursuant to	590
division (A)(2)(a) of this section, a contributory employer's	591
account shows a negative balance in excess of fifteen per cent of	592
the employer's average annual payroll, then before the employer's	593
contribution rate is computed for the next succeeding contribution	594
period an amount equal to the amount of the excess shall be	595
permanently transferred from the account as provided in this	596
division.	597

(c) If at the next computation date subsequent to the	598
computation date at which a transfer from a contributory	599
employer's account occurs pursuant to division (A)(2)(b) of this	600
section, the employer's account shows a negative balance in excess	601
of twenty per cent of the employer's average annual payroll, then	602
before the employer's contribution rate is computed for the next	603
succeeding contribution period, an amount equal to the amount of	604
the excess shall be permanently transferred from the account as	605
provided in this division.	606

(d) If no transfer occurs pursuant to division (A)(2)(b) or	607
(c) of this section, the employer's account is ineligible for any	608
additional transfers under division (A)(2) of this section until	609
the account requalifies for a transfer pursuant to division	610
(A)(2)(a) of this section.	611

(B) Any employer may make voluntary payments in addition to	612
the contributions required under this chapter, in accordance with	613
rules established by the director. Such payments shall be included	614
in the employer's account as of the computation date, provided	615
they are received by the director by the thirty-first day of	616
December following such computation date. Such voluntary payment,	617
when accepted from an employer, will not be refunded in whole or	618
in part. In determining whether an employer's account has a	619
positive balance on two consecutive computation dates and is	620
eligible for transfers under division (A)(2) of this section, the	621
director shall exclude any voluntary payments made subsequent to	622
the last transfer made under division (A)(2) of this section.	623

(C) All contributions to the fund shall be pooled and	624
available to pay benefits to any individual entitled to benefits	625
irrespective of the source of such contributions.	626

(D)(1) For the purposes of this section and sections 4141.241	627
and 4141.242 of the Revised Code, an employer's account shall be	628
charged only for benefits based on remuneration paid by such	629
employer. Benefits paid to an eligible individual shall be charged	630
against the account of each employer within the claimant's base	631
period in the proportion to which wages attributable to each	632
employer of the claimant bears to the claimant's total base period	633
wages. Charges to the account of a base period employer with whom	634
the claimant is employed part-time at the time the claimant's	635
application for a determination of benefits rights is filed shall	636
be charged to the mutualized account when all of the following	637
conditions are met:	638

(a) The claimant also worked part-time for the employer	639
during the base period of the claim.	640

(b) The claimant is unemployed due to loss of other	641
employment.	642

(c) The employer is not a reimbursing employer under section	643
4141.241 or 4141.242 of the Revised Code.	644

(2) Notwithstanding division (D)(1) of this section, charges	645
to the account of any employer, including any reimbursing	646
employer, shall be charged to the mutualized account if it finally	647
is determined by a court on appeal that the employer's account is	648
not chargeable for the benefits.	649

(3) Any benefits paid to a claimant under section 4141.28 of	650
the Revised Code prior to a final determination of the claimant's	651
right to the benefits shall be charged to the employer's account	652
as provided in division (D)(1) of this section, provided that if	653
there is no final determination of the claim by the subsequent	654
thirtieth day of June, the employer's account shall be credited	655
with the total amount of benefits that has been paid prior to that	656
date, based on the determination that has not become final. The	657
total amount credited to the employer's account shall be charged	658
to a suspense account, which shall be maintained as a separate	659
bookkeeping account and administered as a part of this section,	660
and shall not be used in determining the account balance of the	661
employer for the purpose of computing the employer's contribution	662
rate under section 4141.25 of the Revised Code.	663

If it is finally determined that the claimant is entitled to	664
all or a part of the benefits in dispute, the suspense account	665
shall be credited and the appropriate employer's account charged	666
with the benefits. If it is finally determined that the claimant	667
is not entitled to all or any portion of the benefits in dispute,	668
the benefits shall be credited to the suspense account and a	669
corresponding charge made to the mutualized account established in	670
division (B) of section 4141.25 of the Revised Code, provided	671
that, except as otherwise provided in this section, if benefits	672
are chargeable to an employer or group of employers who is	673
required or elects to make payments to the fund in lieu of	674
contributions under section 4141.241 of the Revised Code, the	675
benefits shall be charged to the employer's account in the manner	676
provided in division (D)(1) of this section and division (B) of	677
section 4141.241 of the Revised Code, and no part of the benefits	678
may be charged to the suspense account provided in this division.	679

To the extent that benefits that have been paid to a claimant	680
and charged to the employer's account are found not to be due the	681
claimant and are recovered by the director as provided in section	682
4141.35 of the Revised Code, they shall be credited to the	683
employer's account.	684

(4) The director shall notify each employer at least once	685
each month of the benefits charged to the employer's account since	686
the last preceding notice; except that for the purposes of	687
sections 4141.241 and 4141.242 of the Revised Code which provides	688
the billing of employers on a payment in lieu of a contribution	689
basis, the director may prescribe a quarterly or less frequent	690
notice of benefits charged to the employer's account. Such notice	691
will show a summary of the amount of benefits paid which were	692
charged to the employer's account. This notice shall not be deemed	693
a determination of the claimant's eligibility for benefits. Any	694
employer so notified, however, may file within fifteen days after	695
the mailing date of the notice, an exception to charges appearing	696
on the notice on the grounds that such charges are not in	697
accordance with this section. The director shall promptly examine	698
the exception to such charges and shall notify the employer of the	699
director's decision thereon, which decision shall become final	700
unless appealed to the unemployment compensation review commission	701
in the manner provided in section 4141.26 of the Revised Code. For	702
the purposes of this division, an exception is considered timely	703
filed when it has been received as provided in division (D)(1) of	704
section 4141.281 of the Revised Code.	705

(E) The director shall terminate and close the account of any	706
contributory employer who has been subject to this chapter if the	707
enterprise for which the account was established is no longer in	708
operation and it has had no payroll and its account has not been	709
chargeable with benefits for a period of five consecutive years.	710
The amount of any positive balance, computed as provided in	711
division (A)(3) of section 4141.25 of the Revised Code, in an	712
account closed and terminated as provided in this section shall be	713
credited to the mutualized account as provided in division	714
(B)(2)(b) of section 4141.25 of the Revised Code. The amount of	715
any negative balance, computed as provided in division (A)(3) of	716
section 4141.25 of the Revised Code, in an account closed and	717
terminated as provided in this section shall be charged to the	718
mutualized account as provided in division (B)(1)(b) of section	719
4141.25 of the Revised Code. The amount of any positive balance or	720
negative balance, credited or charged to the mutualized account	721
after the termination and closing of an employer's account, shall	722
not thereafter be considered in determining the contribution rate	723
of such employer. The closing of an employer's account as provided	724
in this division shall not relieve such employer from liability	725
for any unpaid contributions or payment in lieu of contributions	726
which are due for periods prior to such closing.	727

If the director finds that a contributory employer's business	728
is closed solely because of the entrance of one or more of the	729
owners, officers, or partners, or the majority stockholder, into	730
the armed forces of the United States, or any of its allies, or of	731
the United Nations after July 1, 1950, such employer's account	732
shall not be terminated and if the business is resumed within two	733
years after the discharge or release of such persons from active	734
duty in the armed forces, the employer's experience shall be	735
deemed to have been continuous throughout such period. The reserve	736
ratio of any such employer shall be the total contributions paid	737
by such employer minus all benefits, including benefits paid to	738
any individual during the period such employer was in the armed	739
forces, based upon wages paid by the employer prior to the	740
employer's entrance into the armed forces divided by the average	741
of the employer's annual payrolls for the three most recent years	742
during the whole of which the employer has been in business.	743

(F) If an employer transfers all of its trade or business to	744
another employer or person, the acquiring employer or person shall	745
be the successor in interest to the transferring employer and	746
shall assume the resources and liabilities of such transferring	747
employer's account, and continue the payment of all contributions,	748
or payments in lieu of contributions, due under this chapter.	749

If an employer or person acquires substantially all, or a	750
clearly segregable and identifiable portion of an employer's trade	751
or business, then upon the director's approval of a properly	752
completed application for successorship, the employer or person	753
acquiring the trade or business, or portion thereof, shall be the	754
successor in interest. The director by rule may prescribe	755
procedures for effecting transfers of experience as provided for	756
in this section.	757

(G) Notwithstanding sections 4141.09, 4141.23, 4141.24,	758
4141.241, 4141.242, 4141.25, 4141.26, and 4141.27 of the Revised	759
Code, both of the following apply regarding assignment of rates	760
and transfers of experience:	761

(1) If an employer transfers its trade or business, or a	762
portion thereof, to another employer and, at the time of the	763
transfer, both employers are under substantially common ownership,	764
management, or control, then the unemployment experience	765
attributable to the transferred trade or business, or portion	766
thereof, shall be transferred to the employer to whom the business	767
is so transferred. The director shall recalculate the rates of	768
both employers and those rates shall be effective immediately upon	769
the date of the transfer of the trade or business.	770

(2) Whenever a person is not an employer under this chapter	771
at the time the person acquires the trade or business of an	772
employer, the unemployment experience of the acquired trade or	773
business shall not be transferred to the person if the director	774
finds that the person acquired the trade or business solely or	775
primarily for the purpose of obtaining a lower rate of	776
contributions. Instead, that person shall be assigned the	777
applicable new employer rate under division (A)(1) of section	778
4141.25 of the Revised Code.	779

(H) The director shall establish procedures to identify the	780
transfer or acquisition of a trade or business for purposes of	781
this section and shall adopt rules prescribing procedures for	782
effecting transfers of experience as described in this section.	783

(I) No rate of contribution less than two and seven-tenths	784
per cent shall be permitted a contributory employer succeeding to	785
the experience of another contributory employer pursuant to this	786
section for any period subsequent to such succession, except in	787
accordance with rules prescribed by the director, which rules	788
shall be consistent with federal requirements for additional	789
credit allowance in section 3303 of the "Internal Revenue Code of	790
1954" and consistent with this chapter, except that such rules may	791
establish a computation date for any such period different from	792
the computation date generally prescribed by this chapter, and may	793
define "calendar year" as meaning a twelve-consecutive-month	794
period ending on the same day of the year as that on which such	795
computation date occurs.	796

(J) The director may prescribe rules for the establishment,	797
maintenance, and dissolution of common contribution rates for two	798
or more contributory employers, and in accordance with such rules	799
and upon application by two or more employers shall establish such	800
common rate to be computed by merging the several contribution	801
rate factors of such employers for the purpose of establishing a	802
common contribution rate applicable to all such employers.	803

(K) The director shall adopt rules applicable to professional	804
employer organizations and professional employer organization	805
reporting entities to address the method in which a professional	806
employer organization or professional employer organization	807
reporting entity reports quarterly wages and contributions to the	808
director for shared employees.	809

(1) The rules shall recognize a professional employer	810
organization or professional employer organization reporting	811
entity as the employer of record of the shared employees of the	812
professional employer organization or professional employer	813
organization reporting entity for reporting purposes; however, the	814
rules may require that each shared employee of a single client	815
employer be reported under a separate and unique subaccount of the	816
professional employer organization or professional employer	817
organization reporting entity to reflect the experience of the	818
shared employees of that client employer.	819

(2) The director shall use a subaccount solely to determine	820
experience rates for that individual subaccount on an annual basis	821
and shall recognize a professional employer organization or	822
professional employer organization reporting entity as the	823
employer of record associated with each subaccount. The director	824
shall combine the rate experience that existed on a client	825
employer's account prior to entering into a professional employer	826
organization agreement with the experience accumulated as a	827
subaccount of the professional employer organization or	828
professional employer organization reporting entity. The combined	829
experience shall remain with the client account upon termination	830
of the professional employer organization agreement.	831

(3) A professional employer organization or professional	832
employer organization reporting entity shall provide a power of	833
attorney or other evidence, which evidence may be included as part	834
of a professional employer organization agreement, completed by	835
each client employer of the professional employer organization or	836
professional employer organization reporting entity, authorizing	837
the professional employer organization or professional employer	838
organization reporting entity to act on behalf of the client	839
employer in accordance with the requirements of this chapter.	840

(4) Any rule adopted pursuant to division (K) of this section	841
also shall include administrative requirements that permit a	842
professional employer organization or a professional employer	843
organization reporting entity to transmit any reporting and	844
payment data required under division (K)(1) of this section	845
collectively as a single filing with the director.	846

(5) As used in division (K) of this section, "client	847
employer," "professional employer organization," "professional	848
employer organization agreement," "professional employer	849
organization reporting entity," and "shared employee" have the	850
same meanings as in section 4125.01 of the Revised Code.	851

Sec. 5747.07.  (A) As used in this section:

852

(1) "Partial weekly withholding period" means a period during	853
which an employer directly, indirectly, or constructively pays	854
compensation to, or credits compensation to the benefit of, an	855
employee, and that consists of a consecutive Saturday, Sunday,	856
Monday, and Tuesday or a consecutive Wednesday, Thursday, and	857
Friday. There are two partial weekly withholding periods each	858
week, except that a partial weekly withholding period cannot	859
extend from one calendar year into the next calendar year; if the	860
first day of January falls on a day other than Saturday or	861
Wednesday, the partial weekly withholding period ends on the	862
thirty-first day of December and there are three partial weekly	863
withholding periods during that week.	864

(2) "Undeposited taxes" means the taxes an employer is	865
required to deduct and withhold from an employee's compensation	866
pursuant to section 5747.06 of the Revised Code that have not been	867
remitted to the tax commissioner pursuant to this section or to	868
the treasurer of state pursuant to section 5747.072 of the Revised	869
Code.	870

(3) A "week" begins on Saturday and concludes at the end of	871
the following Friday.	872

(4) "Client employer," "professional employer organization,"	873
"professional employer organization agreement," and "professional	874
employer organization reporting entity" have the same meanings as	875
in section 4125.01 of the Revised Code.	876

(B) Except as provided in divisions (C) and (D) of this	877
section and in division (A) of section 5747.072 of the Revised	878
Code, every employer required to deduct and withhold any amount	879
under section 5747.06 of the Revised Code shall file a return and	880
shall pay the amount required by law as follows:	881

(1) An employer who accumulates or is required to accumulate	882
undeposited taxes of one hundred thousand dollars or more during a	883
partial weekly withholding period shall make the payment of the	884
undeposited taxes by the close of the first banking day after the	885
day on which the accumulation reaches one hundred thousand	886
dollars. If required under division (I) of this section, the	887
payment shall be made by electronic funds transfer under section	888
5747.072 of the Revised Code.	889

(2)(a) Except as required by division (B)(1) of this section,	890
an employer described in division (B)(2)(b) of this section shall	891
make the payment of undeposited taxes within three banking days	892
after the close of a partial weekly withholding period during	893
which the employer was required to deduct and withhold any amount	894
under this chapter. If required under division (I) of this	895
section, the payment shall be made by electronic funds transfer	896
under section 5747.072 of the Revised Code.	897

(b) For amounts required to be deducted and withheld during	898
1994, an employer described in division (B)(2)(b) of this section	899
is one whose actual or required payments under this section	900
exceeded one hundred eighty thousand dollars during the	901
twelve-month period ending June 30, 1993. For amounts required to	902
be deducted and withheld during 1995 and each year thereafter, an	903
employer described in division (B)(2)(b) of this section is one	904
whose actual or required payments under this section were at least	905
eighty-four thousand dollars during the twelve-month period ending	906
on the thirtieth day of June of the preceding calendar year.	907

(3) Except as required by divisions (B)(1) and (2) of this	908
section, if an employer's actual or required payments were more	909
than two thousand dollars during the twelve-month period ending on	910
the thirtieth day of June of the preceding calendar year, the	911
employer shall make the payment of undeposited taxes for each	912
month during which they were required to be withheld no later than	913
fifteen days following the last day of that month. The employer	914
shall file the return prescribed by the tax commissioner with the	915
payment.	916

(4) Except as required by divisions (B)(1), (2), and (3) of	917
this section, an employer shall make the payment of undeposited	918
taxes for each calendar quarter during which they were required to	919
be withheld no later than the last day of the month following the	920
last day of March, June, September, and December each year. The	921
employer shall file the return prescribed by the tax commissioner	922
with the payment.	923

(C) The return and payment schedules prescribed by divisions	924
(B)(1) and (2) of this section do not apply to the return and	925
payment of undeposited school district income taxes arising from	926
taxes levied pursuant to Chapter 5748. of the Revised Code.	927
Undeposited school district income taxes shall be returned and	928
paid pursuant to divisions (B)(3) and (4) of this section, as	929
applicable.	930

(D)(1) The requirements of division (B) of this section are	931
met if the amount paid is not less than ninety-five per cent of	932
the actual tax withheld or required to be withheld for the prior	933
quarterly, monthly, or partial weekly withholding period, and the	934
underpayment is not due to willful neglect. Any underpayment of	935
withheld tax shall be paid within thirty days of the date on which	936
the withheld tax was due without regard to division (D)(1) of this	937
section. An employer described in division (B)(1) or (2) of this	938
section shall make the payment by electronic funds transfer under	939
section 5747.072 of the Revised Code.	940

(2) If the tax commissioner believes that quarterly or	941
monthly payments would result in a delay that might jeopardize the	942
remittance of withholding payments, the commissioner may order	943
that the payments be made weekly, or more frequently if necessary,	944
and the payments shall be made no later than three banking days	945
following the close of the period for which the jeopardy order is	946
made. An order requiring weekly or more frequent payments shall be	947
delivered to the employer personally or by certified mail and	948
remains in effect until the commissioner notifies the employer to	949
the contrary.	950

(3) If compelling circumstances exist concerning the	951
remittance of undeposited taxes, the commissioner may order the	952
employer to make payments under any of the payment schedules under	953
division (B) of this section. The order shall be delivered to the	954
employer personally or by certified mail and shall remain in	955
effect until the commissioner notifies the employer to the	956
contrary. For purposes of division (D)(3) of this section,	957
"compelling circumstances" exist if either or both of the	958
following are true:	959

(a) Based upon annualization of payments made or required to	960
be made during the preceding calendar year and during the current	961
calendar year, the employer would be required for the next	962
calendar year to make payments under division (B)(2) of this	963
section.	964

(b) Based upon annualization of payments made or required to	965
be made during the current calendar year, the employer would be	966
required for the next calendar year to make payments under	967
division (B)(2) of this section.	968

(E)(1) An employer described in division (B)(1) or (2) of	969
this section shall file, not later than the last day of the month	970
following the end of each calendar quarter, a return covering, but	971
not limited to, both the actual amount deducted and withheld and	972
the amount required to be deducted and withheld for the tax	973
imposed under section 5747.02 of the Revised Code during each	974
partial weekly withholding period or portion of a partial weekly	975
withholding period during that quarter. The employer shall file	976
the quarterly return even if the aggregate amount required to be	977
deducted and withheld for the quarter is zero dollars. At the time	978
of filing the return, the employer shall pay any amounts of	979
undeposited taxes for the quarter, whether actually deducted and	980
withheld or required to be deducted and withheld, that have not	981
been previously paid. If required under division (I) of this	982
section, the payment shall be made by electronic funds transfer.	983
The tax commissioner shall prescribe the form and other	984
requirements of the quarterly return.	985

(2) In addition to other returns required to be filed and	986
payments required to be made under this section, every employer	987
required to deduct and withhold taxes shall file, not later than	988
the thirty-first day of January of each year, an annual return	989
covering, but not limited to, both the aggregate amount deducted	990
and withheld and the aggregate amount required to be deducted and	991
withheld during the entire preceding year for the tax imposed	992
under section 5747.02 of the Revised Code and for each tax imposed	993
under Chapter 5748. of the Revised Code. At the time of filing	994
that return, the employer shall pay over any amounts of	995
undeposited taxes for the preceding year, whether actually	996
deducted and withheld or required to be deducted and withheld,	997
that have not been previously paid. The employer shall make the	998
annual report, to each employee and to the tax commissioner, of	999
the compensation paid and each tax withheld, as the commissioner	1000
by rule may prescribe.	1001

Each employer required to deduct and withhold any tax is	1002
liable for the payment of that amount required to be deducted and	1003
withheld, whether or not the tax has in fact been withheld, unless	1004
the failure to withhold was based upon the employer's good faith	1005
in reliance upon the statement of the employee as to liability,	1006
and the amount shall be deemed to be a special fund in trust for	1007
the general revenue fund.	1008

(F) Each employer shall file with the employer's annual	1009
return the following items of information on employees for whom	1010
withholding is required under section 5747.06 of the Revised Code:	1011

(1) The full name of each employee, the employee's address,	1012
the employee's school district of residence, and in the case of a	1013
nonresident employee, the employee's principal county of	1014
employment;	1015

(2) The social security number of each employee;

1016

(3) The total amount of compensation paid before any	1017
deductions to each employee for the period for which the annual	1018
return is made;	1019

(4) The amount of the tax imposed by section 5747.02 of the	1020
Revised Code and the amount of each tax imposed under Chapter	1021
5748. of the Revised Code withheld from the compensation of the	1022
employee for the period for which the annual return is made. The	1023
commissioner may extend upon good cause the period for filing any	1024
notice or return required to be filed under this section and may	1025
adopt rules relating to extensions of time. If the extension	1026
results in an extension of time for the payment of the amounts	1027
withheld with respect to which the return is filed, the employer	1028
shall pay, at the time the amount withheld is paid, an amount of	1029
interest computed at the rate per annum prescribed by section	1030
5703.47 of the Revised Code on that amount withheld, from the day	1031
that amount was originally required to be paid to the day of	1032
actual payment or to the day an assessment is issued under section	1033
5747.13 of the Revised Code, whichever occurs first.	1034

(5) In addition to all other interest charges and penalties	1035
imposed, all amounts of taxes withheld or required to be withheld	1036
and remaining unpaid after the day the amounts are required to be	1037
paid shall bear interest from the date prescribed for payment at	1038
the rate per annum prescribed by section 5703.47 of the Revised	1039
Code on the amount unpaid, in addition to the amount withheld,	1040
until paid or until the day an assessment is issued under section	1041
5747.13 of the Revised Code, whichever occurs first.	1042

(G) An employee of a corporation, limited liability company,	1043
or business trust having control or supervision of or charged with	1044
the responsibility of filing the report and making payment, or an	1045
officer, member, manager, or trustee of a corporation, limited	1046
liability company, or business trust who is responsible for the	1047
execution of the corporation's, limited liability company's, or	1048
business trust's fiscal responsibilities, shall be personally	1049
liable for failure to file the report or pay the tax due as	1050
required by this section. The dissolution, termination, or	1051
bankruptcy of a corporation, limited liability company, or	1052
business trust does not discharge a responsible officer's,	1053
member's, manager's, employee's, or trustee's liability for a	1054
failure of the corporation, limited liability company, or business	1055
trust to file returns or pay tax due.	1056

(H) If an employer required to deduct and withhold income tax	1057
from compensation and to pay that tax to the state under sections	1058
5747.06 and 5747.07 of the Revised Code sells the employer's	1059
business or stock of merchandise or quits the employer's business,	1060
the taxes required to be deducted and withheld and paid to the	1061
state pursuant to those sections prior to that time, together with	1062
any interest and penalties imposed on those taxes, become due and	1063
payable immediately, and that person shall make a final return	1064
within fifteen days after the date of selling or quitting	1065
business. The employer's successor shall withhold a sufficient	1066
amount of the purchase money to cover the amount of the taxes,	1067
interest, and penalties due and unpaid, until the former owner	1068
produces a receipt from the tax commissioner showing that the	1069
taxes, interest, and penalties have been paid or a certificate	1070
indicating that no such taxes are due. If the purchaser of the	1071
business or stock of merchandise fails to withhold purchase money,	1072
the purchaser shall be personally liable for the payment of the	1073
taxes, interest, and penalties accrued and unpaid during the	1074
operation of the business by the former owner. If the amount of	1075
taxes, interest, and penalties outstanding at the time of the	1076
purchase exceeds the total purchase money, the tax commissioner in	1077
the commissioner's discretion may adjust the liability of the	1078
seller or the responsibility of the purchaser to pay that	1079
liability to maximize the collection of withholding tax revenue.	1080

(I)(1) An employer described in division (I)(2) of this	1081
section shall make all payments required by this section for the	1082
year by electronic funds transfer under section 5747.072 of the	1083
Revised Code.	1084

(2)(a) For 1994, an employer described in division (I)(2) of	1085
this section is one whose actual or required payments under this	1086
section exceeded five hundred thousand dollars during the	1087
twelve-month period ending June 30, 1993.	1088

(b) For 1995, an employer described in division (I)(2) of	1089
this section is one whose actual or required payments under this	1090
section exceeded five hundred thousand dollars during the	1091
twelve-month period ending June 30, 1994.	1092

(c) For 1996, an employer described in division (I)(2) of	1093
this section is one whose actual or required payments under this	1094
section exceeded three hundred thousand dollars during the	1095
twelve-month period ending June 30, 1995.	1096

(d) For 1997 through 2000, an employer described in division	1097
(I)(2) of this section is one whose actual or required payments	1098
under this section exceeded one hundred eighty thousand dollars	1099
during the twelve-month period ending on the thirtieth day of June	1100
of the preceding calendar year.	1101

(e) For 2001 and thereafter, an employer described in	1102
division (I)(2) of this section is one whose actual or required	1103
payments under this section exceeded eighty-four thousand dollars	1104
during the twelve-month period ending on the thirtieth day of June	1105
of the preceding calendar year.	1106

(J)(1) Every professional employer organization and every	1107
professional employer organization reporting entity shall file a	1108
report with the tax commissioner within thirty days after	1109
commencing business in this state or within thirty days after the	1110
effective date of this amendment, whichever is later, that	1111
includes all of the following information:	1112

(a) The name, address, number the employer receives from the	1113
secretary of state to do business in this state, if applicable,	1114
and federal employer identification number of each client employer	1115
of the professional employer organization or professional employer	1116
organization reporting entity;	1117

(b) The date that each client employer became a client of the	1118
professional employer organization or professional employer	1119
organization reporting entity;	1120

(c) The names and mailing addresses of the chief executive	1121
officer and the chief financial officer of each client employer	1122
for taxation of the client employer.	1123

(2) Beginning with the calendar quarter ending after a	1124
professional employer organization or professional employer	1125
organization reporting entity files the report required under	1126
division (J)(1) of this section, and every calendar quarter	1127
thereafter, the professional employer organization or the	1128
professional employer organization reporting entity shall file an	1129
updated report with the tax commissioner. The professional	1130
employer organization or professional employer organization	1131
reporting entity shall file the updated report not later than the	1132
last day of the month following the end of the calendar quarter	1133
and shall include all of the following information in the report:	1134

(a) If an entity became a client employer of the professional	1135
employer organization or professional employer organization	1136
reporting entity at any time during the calendar quarter, all of	1137
the information required under division (J)(1) of this section for	1138
each new client employer;	1139

(b) If an entity terminated the professional employer	1140
organization agreement between the professional employer	1141
organization or professional employer organization reporting	1142
entity and the entity at any time during the calendar quarter, the	1143
information described in division (J)(1)(a) of this section for	1144
that entity, the date during the calendar quarter that the entity	1145
ceased being a client of the professional employer organization or	1146
professional employer organization reporting entity, if	1147
applicable, or the date the entity ceased business operations in	1148
this state, if applicable;	1149

(c) If the name or mailing address of the chief executive	1150
officer or the chief financial officer of a client employer has	1151
changed since the professional employer organization or	1152
professional employer organization reporting entity previously	1153
submitted a report under division (J)(1) or (2) of this section,	1154
the updated name or mailing address, or both, of the chief	1155
executive officer or the chief financial officer, as applicable;	1156

(d) If none of the events described in divisions (J)(2)(a) to	1157
(c) of this section occurred during the calendar quarter, a	1158
statement of that fact.	1159

Section 2. That existing sections 4123.291, 4125.01, 4125.02,	1160
4125.03, 4125.05, 4125.07, 4125.08, 4141.24, and 5747.07 of the	1161
Revised Code are hereby repealed.	1162

Section 3. Section 4125.05 of the Revised Code as amended by	1163
this act and section 4125.051 of the Revised Code as enacted by	1164
this act take effect January 1, 2012.	1165