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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 |
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 | 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) "Assurance organization" means an independent and | 60 |
qualified entity approved by the administrator of workers' | 61 |
compensation to certify the qualifications of a professional | 62 |
employer organization or professional employer organization | 63 |
reporting entity. | 64 |
(B) "Client employer" means a sole proprietor, partnership, | 65 |
association, limited liability company, or corporation that enters | 66 |
into a professional employer organization agreement and is | 67 |
assigned shared employees by the professional employer | 68 |
organization. | 69 |
| 70 |
and liabilities of being an employer. | 71 |
| 72 |
proprietor, partnership, association, limited liability company, | 73 |
or corporation that enters into an agreement with one or more | 74 |
client employers for the purpose of coemploying all or part of the | 75 |
client employer's workforce at the client employer's work site. | 76 |
| 77 |
written contract to coemploy employees between a professional | 78 |
employer organization and a client employer with a duration of not | 79 |
less than twelve months in accordance with the requirements of | 80 |
this chapter. | 81 |
| 82 |
means two or more professional employer organizations that are | 83 |
majority owned or commonly controlled by the same entity, parent, | 84 |
or controlling person and that satisfy reporting entity control | 85 |
rules as defined by the financial accounting standards board and | 86 |
under generally accepted accounting principles. | 87 |
(G) "Shared employee" means an individual intended to be | 88 |
assigned to a client employer on a permanent basis, not as a | 89 |
temporary supplement to the client employer's workforce, who is | 90 |
coemployed by a professional employer organization and a client | 91 |
employer pursuant to a professional employer organization | 92 |
agreement. | 93 |
| 94 |
1333.61 of the Revised Code. | 95 |
(I) "Working capital" means the excess of current assets over | 96 |
current liabilities as determined by generally accepted accounting | 97 |
principles. | 98 |
Sec. 4125.02. The administrator of | 99 |
compensation shall adopt rules in accordance with Chapter 119. of | 100 |
the Revised Code to administer and enforce this chapter, including | 101 |
rules to administer and enforce division (B) of section 4125.03 of | 102 |
the Revised Code. | 103 |
The administrator may adopt rules for the acceptance of | 104 |
electronic filings in accordance with Chapter 1306. of the Revised | 105 |
Code for applications, documents, reports, and other filings | 106 |
required by this chapter. | 107 |
The administrator may allow an independent assurance | 108 |
organization to act on behalf of a professional employer | 109 |
organization or professional employer organization reporting | 110 |
entity in complying with this chapter and any rules adopted under | 111 |
it. The assurance organization shall be approved by the | 112 |
administrator before acting on behalf of the professional employer | 113 |
organization or the professional employer organization reporting | 114 |
entity and shall abide by all standards and procedures established | 115 |
by the administrator for that approval. The administrator may | 116 |
permit a professional employer organization or professional | 117 |
employer organization reporting entity to authorize an assurance | 118 |
organization approved by the administrator to act on behalf of the | 119 |
professional employer organization or professional employer | 120 |
organization reporting entity, and the administrator shall specify | 121 |
certain provisions of this chapter that may be satisfied by an | 122 |
assurance organization acting with that authority. The rules shall | 123 |
also stipulate that the use of an assurance organization by a | 124 |
professional employer organization to comply with this chapter is | 125 |
not required and is strictly voluntary. | 126 |
Sec. 4125.03. (A) The professional employer organization with | 127 |
whom a shared employee is coemployed shall do all of the | 128 |
following: | 129 |
(1) Pay wages associated with a shared employee pursuant to | 130 |
the terms and conditions of compensation in the professional | 131 |
employer organization agreement between the professional employer | 132 |
organization and the client employer; | 133 |
(2) Pay all related payroll taxes associated with a shared | 134 |
employee independent of the terms and conditions contained in the | 135 |
professional employer organization agreement between the | 136 |
professional employer organization and the client employer; | 137 |
(3) Maintain workers' compensation coverage, pay all workers' | 138 |
compensation premiums and manage all workers' compensation claims, | 139 |
filings, and related procedures associated with a shared employee | 140 |
in compliance with Chapters 4121. and 4123. of the Revised Code, | 141 |
except that when shared employees include family farm officers, | 142 |
ordained ministers, or corporate officers of the client employer, | 143 |
payroll reports shall include the entire amount of payroll | 144 |
associated with those persons; | 145 |
(4) Provide written notice to each shared employee it assigns | 146 |
to perform services to a client employer of the relationship | 147 |
between and the responsibilities of the professional employer | 148 |
organization and the client employer; | 149 |
(5) Maintain complete records separately listing the manual | 150 |
classifications of each client employer and the payroll reported | 151 |
to each manual classification for each client employer for each | 152 |
payroll reporting period during the time period covered in the | 153 |
professional employer organization agreement; | 154 |
(6) Maintain a record of workers' compensation claims for | 155 |
each client employer; | 156 |
(7) Make periodic reports, as determined by the administrator | 157 |
of workers' compensation, of client employers and total workforce | 158 |
to the administrator; | 159 |
(8) Report individual client employer payroll, claims, and | 160 |
classification data under a separate and unique subaccount to the | 161 |
administrator; | 162 |
(9) Within fourteen days after receiving notice from the | 163 |
bureau of workers' compensation that a refund or rebate will be | 164 |
applied to workers' compensation premiums, provide a copy of that | 165 |
notice to any client employer to whom that notice is relevant. | 166 |
(B) The professional employer organization with whom a shared | 167 |
employee is coemployed shall provide a list of all of the | 168 |
following information to the client employer upon the written | 169 |
request of the client employer: | 170 |
(1) All workers' compensation claims, premiums, and payroll | 171 |
associated with that client employer; | 172 |
(2) Compensation and benefits paid and reserves established | 173 |
for each claim listed under division (B)(1) of this section; | 174 |
(3) Any other information available to the professional | 175 |
employer organization from the bureau of workers' compensation | 176 |
regarding that client employer. | 177 |
(C)(1) A professional employer organization shall provide the | 178 |
information required under division (B) of this section in writing | 179 |
to the requesting client employer within forty-five days after | 180 |
receiving a written request from the client employer. | 181 |
(2) For purposes of division (C) of this section, a | 182 |
professional employer organization has provided the required | 183 |
information to the client employer when the information is | 184 |
received by the United States postal service or when the | 185 |
information is personally delivered, in writing, directly to the | 186 |
client employer. | 187 |
(D) Except as provided in section 4125.08 of the Revised Code | 188 |
and unless otherwise agreed to in the professional employer | 189 |
organization agreement, the professional employer organization | 190 |
with whom a shared employee is coemployed has a right of direction | 191 |
and control over each shared employee assigned to a client | 192 |
employer's location. However, a client employer shall retain | 193 |
sufficient direction and control over a shared employee as is | 194 |
necessary to do any of the following: | 195 |
(1) Conduct the client employer's business, including | 196 |
training and supervising shared employees; | 197 |
(2) Ensure the quality, adequacy, and safety of the goods or | 198 |
services produced or sold in the client employer's business; | 199 |
(3) Discharge any fiduciary responsibility that the client | 200 |
employer may have; | 201 |
(4) Comply with any applicable licensure, regulatory, or | 202 |
statutory requirement of the client employer. | 203 |
| 204 |
205 | |
206 | |
207 | |
208 | |
209 |
(E) Unless otherwise agreed to in the professional employer | 210 |
organization agreement, liability for acts, errors, and omissions | 211 |
shall be determined as follows: | 212 |
(1) A professional employer organization shall not be liable | 213 |
for the acts, errors, and omissions of a client employer or a | 214 |
shared employee when those acts, errors, and omissions occur under | 215 |
the direction and control of the client employer. | 216 |
(2) A client employer shall not be liable for the acts, | 217 |
errors, and omissions of a professional employer organization or a | 218 |
shared employee when those acts, errors, and omissions occur under | 219 |
the direction and control of the professional employer | 220 |
organization. | 221 |
(F) Nothing in divisions (D) and (E) of this section shall be | 222 |
construed to limit any liability or obligation specifically agreed | 223 |
to in the professional employer organization agreement. | 224 |
Sec. 4125.041. A shared employee under a professional | 225 |
employer organization agreement shall not, solely as a result of | 226 |
being a shared employee, be considered an employee of the | 227 |
professional employer organization for purposes of general | 228 |
liability insurance, fidelity bonds, surety bonds, employer | 229 |
liability not otherwise covered by Chapters 4121. and 4123. of the | 230 |
Revised Code, or liquor liability insurance carried by the | 231 |
professional employer organization, unless the professional | 232 |
employer organization agreement and applicable prearranged | 233 |
employment contract, insurance contract, or bond specifically | 234 |
states otherwise. | 235 |
Sec. 4125.042. (A) For purposes of determining tax credits | 236 |
and other economic incentives that are provided by this state or | 237 |
any political subdivision and based on employment, shared | 238 |
employees under a professional employer organization agreement | 239 |
shall be considered employees solely of the client employer. | 240 |
(1) A client employer shall be entitled to the benefit of any | 241 |
tax credit, economic incentive, or similar benefit arising as the | 242 |
result of the client employer's employment of shared employees. If | 243 |
the grant or amount of any tax credit, economic incentive, or | 244 |
other benefit is based on number of employees, each client | 245 |
employer shall be treated as employing only those shared employees | 246 |
coemployed by the client employer. Shared employees working for | 247 |
other client employers of the professional employer organization | 248 |
shall not be counted as employees for that purpose. | 249 |
(2) Upon request by a client employer or an agency or | 250 |
department of this state, a professional employer organization | 251 |
shall provide employment information reasonably required by the | 252 |
agency or department responsible for administration of the tax | 253 |
credit or economic incentive and necessary to support any request, | 254 |
claim, application, or other action by a client employer seeking | 255 |
the tax credit or economic incentive. | 256 |
(B) Shared employees whose services are subject to sales tax | 257 |
shall be considered the employees of the client employer for | 258 |
purposes of collecting and levying sales tax on the services | 259 |
performed by the shared employee. Nothing contained in this | 260 |
chapter shall relieve a client employer or professional employer | 261 |
organization of any sales tax liability with respect to its goods | 262 |
or services. | 263 |
(C) Any tax assessed on a per capita or per employee basis | 264 |
shall be assessed against the client employer for shared employees | 265 |
and against the professional employer organization for employees | 266 |
of the professional employer organization who are not shared | 267 |
employees coemployed with a client employer. | 268 |
(D) For purposes of computing any tax that is imposed or | 269 |
calculated upon the basis of total payroll, the professional | 270 |
employer organization shall be eligible to use any small business | 271 |
allowance or exemption based solely on the employees of the | 272 |
professional employer organization who are not shared employees | 273 |
with any client employer. The eligibility of a client employer for | 274 |
the allowance or exemption shall be based solely upon the payroll | 275 |
of the employees of the client employer, including any shared | 276 |
employees coemployed by the client employer. | 277 |
Sec. 4125.05. (A) Not later than thirty days after November | 278 |
5, 2004, or not later than thirty days after the formation of a | 279 |
professional employer organization, whichever date occurs later, a | 280 |
professional employer organization operating in this state shall | 281 |
register with the administrator of
| 282 |
compensation on forms provided by the administrator. Following | 283 |
initial registration, each professional employer organization | 284 |
shall register with the administrator annually on or before the | 285 |
thirty-first day of December. Commonly owned or controlled | 286 |
applicants may register as a professional employer organization | 287 |
reporting entity or register individually. Registration as a part | 288 |
of a professional employer organization reporting entity shall not | 289 |
disqualify an individual professional employer organization from | 290 |
participating in a group-rated plan under division (A)(4) of | 291 |
section 4123.29 of the Revised Code. | 292 |
(B) Initial registration and each annual registration renewal | 293 |
shall include all of the following: | 294 |
(1) A list of each of the professional employer | 295 |
organization's client employers current as of the date of | 296 |
registration for purposes of initial registration or current as of | 297 |
the date of annual registration renewal, or within fourteen days | 298 |
of adding or releasing a client, that includes the client | 299 |
employer's name, address, federal tax identification number, and | 300 |
bureau of workers' compensation risk number; | 301 |
(2) A fee as determined by the administrator; | 302 |
(3) The name or names under which the professional employer | 303 |
organization conducts business; | 304 |
(4) The address of the professional employer organization's | 305 |
principal place of business and the address of each office it | 306 |
maintains in this state; | 307 |
(5) The professional employer organization's taxpayer or | 308 |
employer identification number; | 309 |
(6) A list of each state in which the professional employer | 310 |
organization has operated in the preceding five years, and the | 311 |
name, corresponding with each state, under which the professional | 312 |
employer organization operated in each state, including any | 313 |
alternative names, names of predecessors, and if known, successor | 314 |
business entities; | 315 |
(7) The most recent financial statement prepared and audited | 316 |
pursuant to division (B) of section 4125.051 of the Revised Code; | 317 |
(8) If there is any deficit in the working capital required | 318 |
under division (A) of section 4125.051 of the Revised Code, a | 319 |
bond, irrevocable letter of credit, or securities with a minimum | 320 |
market value in an amount sufficient to cover the deficit in | 321 |
accordance with the requirements of that section; | 322 |
(9) An attestation of the accuracy of the data submissions | 323 |
from the chief executive officer of the professional employer | 324 |
organization. | 325 |
(C) Upon terms and for periods that the administrator | 326 |
considers appropriate, the administrator may issue a limited | 327 |
registration to a professional employer organization or | 328 |
professional employer organization reporting entity that provides | 329 |
all of the following items: | 330 |
(1) A properly executed request for limited registration on a | 331 |
form provided by the administrator; | 332 |
(2) All information and materials required for registration | 333 |
in divisions (B)(1) to (6) of this section; | 334 |
(3) Information and documentation necessary to show that the | 335 |
professional employer organization or professional employer | 336 |
organization reporting entity satisfies all of the following | 337 |
criteria: | 338 |
(a) It is domiciled outside of this state. | 339 |
(b) It is licensed or registered as a professional employer | 340 |
organization in another state. | 341 |
(c) It does not maintain an office in this state. | 342 |
(d) It does not participate in direct solicitations for | 343 |
client employers located or domiciled in this state. | 344 |
(e) It has fifty or fewer shared employees employed or | 345 |
domiciled in this state on any given day. | 346 |
(D)(1) The administrator, with the advice and consent of the | 347 |
bureau of workers' compensation board of directors, shall adopt | 348 |
rules in accordance with Chapter 119. of the Revised Code to | 349 |
require, in addition to the requirement under division (B)(8) of | 350 |
this section and except as otherwise specified in division | 351 |
352 | |
provide security in the form of a bond or letter of credit | 353 |
assignable to the Ohio bureau of workers' compensation not to | 354 |
exceed an amount equal to the premiums and assessments incurred | 355 |
for the two most recent payroll periods, prior to any discounts or | 356 |
dividends, to meet the financial obligations of the professional | 357 |
employer organization pursuant to this chapter and Chapters 4121. | 358 |
and 4123. of the Revised Code. | 359 |
(2) As an alternative to providing security in the form of a | 360 |
bond or letter of credit under division (D)(1) of this section, | 361 |
the administrator shall permit a professional employer | 362 |
organization to make periodic payments of prospective premiums and | 363 |
assessments to the bureau | 364 |
365 | |
366 | |
367 |
(3) A professional employer organization may appeal the | 368 |
amount of the security required pursuant to rules adopted under | 369 |
division | 370 |
4123.291 of the Revised Code. | 371 |
| 372 |
professional employer organization that qualifies for | 373 |
self-insurance or retrospective rating under section 4123.29 or | 374 |
4123.35 of the Revised Code shall abide by the financial | 375 |
disclosure and security requirements pursuant to those sections | 376 |
and the rules adopted under those sections in place of the | 377 |
requirements specified in division | 378 |
specified in rules adopted pursuant to that division. | 379 |
| 380 |
to administer the statutory duties of the administrator and for | 381 |
employees of the state to perform their official duties, all | 382 |
records, reports, client lists, and other information obtained | 383 |
from a professional employer organization and professional | 384 |
employer organization reporting entity under divisions (A), (B), | 385 |
and
| 386 |
considered trade secrets and shall not be published or open to | 387 |
public inspection. | 388 |
| 389 |
shall be considered a trade secret. | 390 |
| 391 |
division (B)(2) of this section in an amount that does not exceed | 392 |
the cost of the administration of the initial and renewal | 393 |
registration process. | 394 |
(I) A financial statement required under division (B)(7) of | 395 |
this section for initial registration shall be the most recent | 396 |
financial statement of the professional employer organization or | 397 |
professional employer organization reporting entity of which the | 398 |
professional employer organization is a member and shall not be | 399 |
older than thirteen months. For each registration renewal, the | 400 |
professional employer organization shall file the required | 401 |
financial statement within one hundred eighty days after the end | 402 |
of the professional employer organization's or professional | 403 |
employer organization reporting entity's fiscal year. A | 404 |
professional employer organization may apply to the administrator | 405 |
for an extension beyond that time if the professional employer | 406 |
organization provides the administrator with a letter from the | 407 |
professional employer organization's auditor stating the reason | 408 |
for delay and the anticipated completion date. | 409 |
(J) Multiple, unrelated professional employer organizations | 410 |
shall not combine together for purposes of obtaining workers' | 411 |
compensation coverage or for forming any type of self-insurance | 412 |
arrangement available under this chapter. Multiple, unrelated | 413 |
professional employer organization reporting entities shall not | 414 |
combine together for purposes of obtaining workers' compensation | 415 |
coverage or for forming any type of self-insurance arrangement | 416 |
available under this chapter. | 417 |
(K) The administrator shall maintain a list of professional | 418 |
employer organizations and professional employer organization | 419 |
reporting entities registered under this section that is readily | 420 |
available to the public by electronic or other means. | 421 |
Sec. 4125.051. (A) A professional employer organization, or a | 422 |
professional employer organization reporting entity of which the | 423 |
professional employer organization is a member, shall maintain | 424 |
positive working capital at initial or annual registration, as | 425 |
reflected in the financial statements submitted to the bureau. If | 426 |
a deficit in working capital is reflected in the financial | 427 |
statements submitted to the bureau, the professional employer | 428 |
organization or the professional employer organization reporting | 429 |
entity shall do both of the following for that registration | 430 |
period: | 431 |
(1) Obtain a bond, irrevocable letter of credit, or | 432 |
securities with a minimum market value in an amount sufficient to | 433 |
cover the deficit in working capital; | 434 |
(2) Submit to the administrator of workers' compensation a | 435 |
quarterly financial statement for each calendar quarter during | 436 |
which there is a deficit in working capital, accompanied by an | 437 |
attestation of the chief executive officer of the professional | 438 |
employer organization that all wages, taxes, workers' compensation | 439 |
premiums, and employee benefits have been paid by the professional | 440 |
employer organization or members of the professional employer | 441 |
organization reporting entity. | 442 |
The bond, letter of credit, or securities required under | 443 |
division (A)(1) of this section shall be held by a depository | 444 |
designated by the administrator and shall secure payment by the | 445 |
professional employer organization or professional employer | 446 |
organization reporting entity of all taxes, wages, benefits, or | 447 |
other entitlements due or otherwise pertaining to shared | 448 |
employees, if the professional employer organization or | 449 |
professional employer organization reporting entity does not make | 450 |
those payments when due. | 451 |
(B) A professional employer organization, or a professional | 452 |
employer organization reporting entity of which the professional | 453 |
employer organization is a member, shall prepare financial | 454 |
statements in accordance with generally accepted accounting | 455 |
principles and submit them for registration and registration | 456 |
renewal under section 4125.05 of the Revised Code. | 457 |
The financial statements shall be audited by an independent | 458 |
certified public accountant authorized to practice in the | 459 |
jurisdiction in which that accountant is located. | 460 |
(1) The resulting report of the auditor shall not include | 461 |
either of the following: | 462 |
(a) A qualification or disclaimer of opinion as to adherence | 463 |
to generally accepted accounting principles; | 464 |
(b) A statement expressing substantial doubt about the | 465 |
ability of the professional employer organization or professional | 466 |
employer organization reporting entity to continue as a going | 467 |
concern. | 468 |
(2) However, if a professional employer organization does not | 469 |
have at least twelve months of operating history on which to base | 470 |
financial statements, the financial statements shall be reviewed | 471 |
by a certified public accountant. | 472 |
(3) Notwithstanding division (B)(1)(a) of this section, if a | 473 |
professional employer organization or professional employer | 474 |
organization reporting entity is a subsidiary or is related to a | 475 |
variable interest entity, the professional employer organization | 476 |
or professional employer organization entity may submit financial | 477 |
statements of the professional employer organization or | 478 |
professional employer organization reporting entity. | 479 |
(C) The bureau shall deny initial or annual registration to | 480 |
an applicant or professional employer organization reporting | 481 |
entity that does not meet the requirements of this section. | 482 |
(D) Professional employer organizations in a professional | 483 |
employer organization reporting entity may satisfy the | 484 |
requirements of this section on a combined or consolidated basis | 485 |
provided that each member of the professional employer | 486 |
organization reporting entity guarantees each other members' | 487 |
satisfaction of the requirements under division (A) of this | 488 |
section. | 489 |
For purposes of satisfying the registration and registration | 490 |
renewal requirements described in division (B)(7) of section | 491 |
4125.05 of the Revised Code, a professional employer organization | 492 |
reporting entity may submit a combined or consolidated financial | 493 |
statement that satisfies the requirements of this section. If the | 494 |
combined or consolidated financial statement includes entities | 495 |
that are not professional employer organizations or that are not | 496 |
in the professional employer organization reporting entity, the | 497 |
controlling entity of the professional employer organization | 498 |
reporting entity that is submitting the consolidated or combined | 499 |
financial statement shall guarantee that the professional employer | 500 |
organizations of the professional employer organization reporting | 501 |
entity have satisfied the requirements under division (A) of this | 502 |
section and shall include supplemental combining schedules to | 503 |
guarantee that the requirements under division (A) of this section | 504 |
are satisfied by the professional employer organization or | 505 |
professional employer organization reporting entity. | 506 |
Sec. 4125.07. Not later than fourteen calendar days after the | 507 |
date on which a professional employer organization agreement is | 508 |
terminated, the professional employer organization is adjudged | 509 |
bankrupt, the professional employer organization ceases operations | 510 |
within the state of Ohio, or the registration of the professional | 511 |
employer organization is revoked, the professional employer | 512 |
organization shall submit to the administrator | 513 |
workers' compensation and each client employer associated with | 514 |
that professional employer organization a completed workers' | 515 |
compensation lease termination notice form provided by the | 516 |
administrator. The completed form shall include all client payroll | 517 |
and claim information listed in a format specified by the | 518 |
administrator and notice of all workers' compensation claims that | 519 |
have been reported to the professional employer organization in | 520 |
accordance with its internal reporting policies. | 521 |
A professional employer organization shall report any | 522 |
transfer of employees between related professional employer | 523 |
organization entities or professional employer organization | 524 |
reporting entities to the administrator within fourteen calendar | 525 |
days after the date of the transfer on a form prescribed by the | 526 |
administrator. The professional employer organization or | 527 |
professional employer organization reporting entity shall include | 528 |
in the form all client payroll and claim information regarding the | 529 |
transferred employees listed in a format specified by the | 530 |
administrator and a notice of all workers' compensation claims | 531 |
that have been reported to the professional employer organization | 532 |
or professional employer organization reporting entity in | 533 |
accordance with the internal reporting policies of the | 534 |
professional employer organization or professional employer | 535 |
organization reporting entity. | 536 |
Sec. 4125.08. Nothing in this chapter exempts a professional | 537 |
employer organization, client employer, or shared employee from | 538 |
any applicable federal, state, or local licensing, registration, | 539 |
or certification statutes or regulations. An individual required | 540 |
to obtain and maintain a license, registration, or certification | 541 |
under law and who is a shared employee of a professional employer | 542 |
organization and a client employer is an employee of the client | 543 |
employer for purposes of obtaining and maintaining the appropriate | 544 |
license, registration, or certification as required by law. A | 545 |
professional employer organization does not engage in any | 546 |
occupation, trade, or profession that requires a license, | 547 |
certification, or registration solely by entering into a | 548 |
professional employer agreement with a client employer or | 549 |
coemploying a shared employee. | 550 |
A client employer shall have the sole right of direction and | 551 |
control of the professional or licensed activities of shared | 552 |
employees and of the client employer's business. The shared | 553 |
employees and client employers shall remain subject to regulation | 554 |
by the board, commission, or agency responsible for licensing, | 555 |
registration, or certification of the shared employees or client | 556 |
employers. | 557 |
Sec. 4125.10. Nothing contained in this chapter or in any | 558 |
professional employer organization agreement shall do any of the | 559 |
following: | 560 |
(A) Diminish, abolish, or remove the rights and obligations | 561 |
of client employers and shared employees existing prior to the | 562 |
effective date of the professional employer organization | 563 |
agreement; | 564 |
(B) Affect, modify, or amend any contractual relationship or | 565 |
restrictive covenant between a shared employee and any client | 566 |
employer in effect at the time a professional employer | 567 |
organization agreement becomes effective; | 568 |
(C) Prohibit or amend any contractual relationship or | 569 |
restrictive covenant between a client employer and a shared | 570 |
employee that is entered into after the professional employer | 571 |
organization agreement becomes effective; | 572 |
(D) Create any new or additional enforcement right of a | 573 |
shared employee against a professional employer organization that | 574 |
is not specifically provided by the professional employer | 575 |
organization agreement or this chapter. | 576 |
A professional employer organization shall have no | 577 |
responsibility or liability in connection with, or arising out of, | 578 |
any contractual relationship or restrictive covenant between a | 579 |
client employer and a shared employee unless the professional | 580 |
employer organization has specifically agreed otherwise in | 581 |
writing. | 582 |
Sec. 4125.11. For purposes of a bid, contract, purchase | 583 |
order, or agreement entered into with the state or any political | 584 |
subdivision, a client employer's status or certification as a | 585 |
small, minority-owned, disadvantaged, or woman-owned business | 586 |
enterprise or as a historically underutilized business shall not | 587 |
be affected as a result of the client employer entering into a | 588 |
professional employer organization agreement or using the services | 589 |
of a professional employer organization. | 590 |
Sec. 4141.24. (A)(1) The director of job and family services | 591 |
shall maintain a separate account for each employer and, except as | 592 |
otherwise provided in division (B) of section 4141.25 of the | 593 |
Revised Code respecting mutualized contributions, shall credit | 594 |
such employer's account with all the contributions, or payments in | 595 |
lieu of contributions, which the employer has paid on the | 596 |
employer's own behalf. | 597 |
(2) If, as of the computation date, a contributory employer's | 598 |
account shows a negative balance computed as provided in division | 599 |
(A)(3) of section 4141.25 of the Revised Code, less any | 600 |
contributions due and unpaid on such date, which negative balance | 601 |
is in excess of the limitations imposed by divisions (A)(2)(a), | 602 |
(b), and (c) of this section and if the employer's account is | 603 |
otherwise eligible for the transfer, then before the employer's | 604 |
contribution rate is computed for the next succeeding contribution | 605 |
period, an amount equal to the amount of the excess eligible for | 606 |
transfer shall be permanently transferred from the account of such | 607 |
employer and charged to the mutualized account provided in | 608 |
division (B) of section 4141.25 of the Revised Code. | 609 |
(a) If as of any computation date, a contributory employer's | 610 |
account shows a negative balance in excess of ten per cent of the | 611 |
employer's average annual payroll, then before the employer's | 612 |
contribution rate is computed for the next succeeding contribution | 613 |
period, an amount equal to the amount of the excess shall be | 614 |
transferred from the account as provided in this division. No | 615 |
contributory employer's account may have any excess transferred | 616 |
pursuant to division (A)(2)(a) of this section, unless the | 617 |
employer's account has shown a positive balance for at least two | 618 |
consecutive computation dates prior to the computation date with | 619 |
respect to which the transfer is proposed. Each time a transfer is | 620 |
made pursuant to division (A)(2)(a) of this section, the | 621 |
employer's account is ineligible for any additional transfers | 622 |
under that division, until the account shows a positive balance | 623 |
for at least two consecutive computation dates subsequent to the | 624 |
computation date of which the most recent transfer occurs pursuant | 625 |
to division (A)(2)(a), (b), or (c) of this section. | 626 |
(b) If at the next computation date after the computation | 627 |
date at which a transfer from the account occurs pursuant to | 628 |
division (A)(2)(a) of this section, a contributory employer's | 629 |
account shows a negative balance in excess of fifteen per cent of | 630 |
the employer's average annual payroll, then before the employer's | 631 |
contribution rate is computed for the next succeeding contribution | 632 |
period an amount equal to the amount of the excess shall be | 633 |
permanently transferred from the account as provided in this | 634 |
division. | 635 |
(c) If at the next computation date subsequent to the | 636 |
computation date at which a transfer from a contributory | 637 |
employer's account occurs pursuant to division (A)(2)(b) of this | 638 |
section, the employer's account shows a negative balance in excess | 639 |
of twenty per cent of the employer's average annual payroll, then | 640 |
before the employer's contribution rate is computed for the next | 641 |
succeeding contribution period, an amount equal to the amount of | 642 |
the excess shall be permanently transferred from the account as | 643 |
provided in this division. | 644 |
(d) If no transfer occurs pursuant to division (A)(2)(b) or | 645 |
(c) of this section, the employer's account is ineligible for any | 646 |
additional transfers under division (A)(2) of this section until | 647 |
the account requalifies for a transfer pursuant to division | 648 |
(A)(2)(a) of this section. | 649 |
(B) Any employer may make voluntary payments in addition to | 650 |
the contributions required under this chapter, in accordance with | 651 |
rules established by the director. Such payments shall be included | 652 |
in the employer's account as of the computation date, provided | 653 |
they are received by the director by the thirty-first day of | 654 |
December following such computation date. Such voluntary payment, | 655 |
when accepted from an employer, will not be refunded in whole or | 656 |
in part. In determining whether an employer's account has a | 657 |
positive balance on two consecutive computation dates and is | 658 |
eligible for transfers under division (A)(2) of this section, the | 659 |
director shall exclude any voluntary payments made subsequent to | 660 |
the last transfer made under division (A)(2) of this section. | 661 |
(C) All contributions to the fund shall be pooled and | 662 |
available to pay benefits to any individual entitled to benefits | 663 |
irrespective of the source of such contributions. | 664 |
(D)(1) For the purposes of this section and sections 4141.241 | 665 |
and 4141.242 of the Revised Code, an employer's account shall be | 666 |
charged only for benefits based on remuneration paid by such | 667 |
employer. Benefits paid to an eligible individual shall be charged | 668 |
against the account of each employer within the claimant's base | 669 |
period in the proportion to which wages attributable to each | 670 |
employer of the claimant bears to the claimant's total base period | 671 |
wages. Charges to the account of a base period employer with whom | 672 |
the claimant is employed part-time at the time the claimant's | 673 |
application for a determination of benefits rights is filed shall | 674 |
be charged to the mutualized account when all of the following | 675 |
conditions are met: | 676 |
(a) The claimant also worked part-time for the employer | 677 |
during the base period of the claim. | 678 |
(b) The claimant is unemployed due to loss of other | 679 |
employment. | 680 |
(c) The employer is not a reimbursing employer under section | 681 |
4141.241 or 4141.242 of the Revised Code. | 682 |
(2) Notwithstanding division (D)(1) of this section, charges | 683 |
to the account of any employer, including any reimbursing | 684 |
employer, shall be charged to the mutualized account if it finally | 685 |
is determined by a court on appeal that the employer's account is | 686 |
not chargeable for the benefits. | 687 |
(3) Any benefits paid to a claimant under section 4141.28 of | 688 |
the Revised Code prior to a final determination of the claimant's | 689 |
right to the benefits shall be charged to the employer's account | 690 |
as provided in division (D)(1) of this section, provided that if | 691 |
there is no final determination of the claim by the subsequent | 692 |
thirtieth day of June, the employer's account shall be credited | 693 |
with the total amount of benefits that has been paid prior to that | 694 |
date, based on the determination that has not become final. The | 695 |
total amount credited to the employer's account shall be charged | 696 |
to a suspense account, which shall be maintained as a separate | 697 |
bookkeeping account and administered as a part of this section, | 698 |
and shall not be used in determining the account balance of the | 699 |
employer for the purpose of computing the employer's contribution | 700 |
rate under section 4141.25 of the Revised Code. | 701 |
If it is finally determined that the claimant is entitled to | 702 |
all or a part of the benefits in dispute, the suspense account | 703 |
shall be credited and the appropriate employer's account charged | 704 |
with the benefits. If it is finally determined that the claimant | 705 |
is not entitled to all or any portion of the benefits in dispute, | 706 |
the benefits shall be credited to the suspense account and a | 707 |
corresponding charge made to the mutualized account established in | 708 |
division (B) of section 4141.25 of the Revised Code, provided | 709 |
that, except as otherwise provided in this section, if benefits | 710 |
are chargeable to an employer or group of employers who is | 711 |
required or elects to make payments to the fund in lieu of | 712 |
contributions under section 4141.241 of the Revised Code, the | 713 |
benefits shall be charged to the employer's account in the manner | 714 |
provided in division (D)(1) of this section and division (B) of | 715 |
section 4141.241 of the Revised Code, and no part of the benefits | 716 |
may be charged to the suspense account provided in this division. | 717 |
To the extent that benefits that have been paid to a claimant | 718 |
and charged to the employer's account are found not to be due the | 719 |
claimant and are recovered by the director as provided in section | 720 |
4141.35 of the Revised Code, they shall be credited to the | 721 |
employer's account. | 722 |
(4) The director shall notify each employer at least once | 723 |
each month of the benefits charged to the employer's account since | 724 |
the last preceding notice; except that for the purposes of | 725 |
sections 4141.241 and 4141.242 of the Revised Code which provides | 726 |
the billing of employers on a payment in lieu of a contribution | 727 |
basis, the director may prescribe a quarterly or less frequent | 728 |
notice of benefits charged to the employer's account. Such notice | 729 |
will show a summary of the amount of benefits paid which were | 730 |
charged to the employer's account. This notice shall not be deemed | 731 |
a determination of the claimant's eligibility for benefits. Any | 732 |
employer so notified, however, may file within fifteen days after | 733 |
the mailing date of the notice, an exception to charges appearing | 734 |
on the notice on the grounds that such charges are not in | 735 |
accordance with this section. The director shall promptly examine | 736 |
the exception to such charges and shall notify the employer of the | 737 |
director's decision thereon, which decision shall become final | 738 |
unless appealed to the unemployment compensation review commission | 739 |
in the manner provided in section 4141.26 of the Revised Code. For | 740 |
the purposes of this division, an exception is considered timely | 741 |
filed when it has been received as provided in division (D)(1) of | 742 |
section 4141.281 of the Revised Code. | 743 |
(E) The director shall terminate and close the account of any | 744 |
contributory employer who has been subject to this chapter if the | 745 |
enterprise for which the account was established is no longer in | 746 |
operation and it has had no payroll and its account has not been | 747 |
chargeable with benefits for a period of five consecutive years. | 748 |
The amount of any positive balance, computed as provided in | 749 |
division (A)(3) of section 4141.25 of the Revised Code, in an | 750 |
account closed and terminated as provided in this section shall be | 751 |
credited to the mutualized account as provided in division | 752 |
(B)(2)(b) of section 4141.25 of the Revised Code. The amount of | 753 |
any negative balance, computed as provided in division (A)(3) of | 754 |
section 4141.25 of the Revised Code, in an account closed and | 755 |
terminated as provided in this section shall be charged to the | 756 |
mutualized account as provided in division (B)(1)(b) of section | 757 |
4141.25 of the Revised Code. The amount of any positive balance or | 758 |
negative balance, credited or charged to the mutualized account | 759 |
after the termination and closing of an employer's account, shall | 760 |
not thereafter be considered in determining the contribution rate | 761 |
of such employer. The closing of an employer's account as provided | 762 |
in this division shall not relieve such employer from liability | 763 |
for any unpaid contributions or payment in lieu of contributions | 764 |
which are due for periods prior to such closing. | 765 |
If the director finds that a contributory employer's business | 766 |
is closed solely because of the entrance of one or more of the | 767 |
owners, officers, or partners, or the majority stockholder, into | 768 |
the armed forces of the United States, or any of its allies, or of | 769 |
the United Nations after July 1, 1950, such employer's account | 770 |
shall not be terminated and if the business is resumed within two | 771 |
years after the discharge or release of such persons from active | 772 |
duty in the armed forces, the employer's experience shall be | 773 |
deemed to have been continuous throughout such period. The reserve | 774 |
ratio of any such employer shall be the total contributions paid | 775 |
by such employer minus all benefits, including benefits paid to | 776 |
any individual during the period such employer was in the armed | 777 |
forces, based upon wages paid by the employer prior to the | 778 |
employer's entrance into the armed forces divided by the average | 779 |
of the employer's annual payrolls for the three most recent years | 780 |
during the whole of which the employer has been in business. | 781 |
(F) If an employer transfers all of its trade or business to | 782 |
another employer or person, the acquiring employer or person shall | 783 |
be the successor in interest to the transferring employer and | 784 |
shall assume the resources and liabilities of such transferring | 785 |
employer's account, and continue the payment of all contributions, | 786 |
or payments in lieu of contributions, due under this chapter. | 787 |
If an employer or person acquires substantially all, or a | 788 |
clearly segregable and identifiable portion of an employer's trade | 789 |
or business, then upon the director's approval of a properly | 790 |
completed application for successorship, the employer or person | 791 |
acquiring the trade or business, or portion thereof, shall be the | 792 |
successor in interest. The director by rule may prescribe | 793 |
procedures for effecting transfers of experience as provided for | 794 |
in this section. | 795 |
(G) Notwithstanding sections 4141.09, 4141.23, 4141.24, | 796 |
4141.241, 4141.242, 4141.25, 4141.26, and 4141.27 of the Revised | 797 |
Code, both of the following apply regarding assignment of rates | 798 |
and transfers of experience: | 799 |
(1) If an employer transfers its trade or business, or a | 800 |
portion thereof, to another employer and, at the time of the | 801 |
transfer, both employers are under substantially common ownership, | 802 |
management, or control, then the unemployment experience | 803 |
attributable to the transferred trade or business, or portion | 804 |
thereof, shall be transferred to the employer to whom the business | 805 |
is so transferred. The director shall recalculate the rates of | 806 |
both employers and those rates shall be effective immediately upon | 807 |
the date of the transfer of the trade or business. | 808 |
(2) Whenever a person is not an employer under this chapter | 809 |
at the time the person acquires the trade or business of an | 810 |
employer, the unemployment experience of the acquired trade or | 811 |
business shall not be transferred to the person if the director | 812 |
finds that the person acquired the trade or business solely or | 813 |
primarily for the purpose of obtaining a lower rate of | 814 |
contributions. Instead, that person shall be assigned the | 815 |
applicable new employer rate under division (A)(1) of section | 816 |
4141.25 of the Revised Code. | 817 |
(H) The director shall establish procedures to identify the | 818 |
transfer or acquisition of a trade or business for purposes of | 819 |
this section and shall adopt rules prescribing procedures for | 820 |
effecting transfers of experience as described in this section. | 821 |
(I) No rate of contribution less than two and seven-tenths | 822 |
per cent shall be permitted a contributory employer succeeding to | 823 |
the experience of another contributory employer pursuant to this | 824 |
section for any period subsequent to such succession, except in | 825 |
accordance with rules prescribed by the director, which rules | 826 |
shall be consistent with federal requirements for additional | 827 |
credit allowance in section 3303 of the "Internal Revenue Code of | 828 |
1954" and consistent with this chapter, except that such rules may | 829 |
establish a computation date for any such period different from | 830 |
the computation date generally prescribed by this chapter, and may | 831 |
define "calendar year" as meaning a twelve-consecutive-month | 832 |
period ending on the same day of the year as that on which such | 833 |
computation date occurs. | 834 |
(J) The director may prescribe rules for the establishment, | 835 |
maintenance, and dissolution of common contribution rates for two | 836 |
or more contributory employers, and in accordance with such rules | 837 |
and upon application by two or more employers shall establish such | 838 |
common rate to be computed by merging the several contribution | 839 |
rate factors of such employers for the purpose of establishing a | 840 |
common contribution rate applicable to all such employers. | 841 |
(K) The director shall adopt rules applicable to professional | 842 |
employer organizations and professional employer organization | 843 |
reporting entities to address the method in which a professional | 844 |
employer organization or professional employer organization | 845 |
reporting entity reports quarterly wages and contributions to the | 846 |
director for shared employees. | 847 |
(1) The rules shall recognize a professional employer | 848 |
organization or professional employer organization reporting | 849 |
entity as the employer of record of the shared employees of the | 850 |
professional employer organization or professional employer | 851 |
organization reporting entity for reporting purposes; however, the | 852 |
rules shall require that each shared employee of a single client | 853 |
employer be reported under a separate and unique subaccount of the | 854 |
professional employer organization or professional employer | 855 |
organization reporting entity to reflect the experience of the | 856 |
shared employees of that client employer. | 857 |
(2) The director shall use a subaccount solely to determine | 858 |
experience rates for that individual subaccount on an annual basis | 859 |
and shall recognize a professional employer organization or | 860 |
professional employer organization reporting entity as the | 861 |
employer of record associated with each subaccount. The director | 862 |
shall combine the rate experience that existed on a client | 863 |
employer's account prior to entering into a professional employer | 864 |
organization agreement with the experience accumulated as a | 865 |
subaccount of the professional employer organization or | 866 |
professional employer organization reporting entity. The combined | 867 |
experience shall remain with the client account upon termination | 868 |
of the professional employer organization agreement. | 869 |
(3) A professional employer organization or professional | 870 |
employer organization reporting entity shall provide a power of | 871 |
attorney or other evidence, which evidence may be included as part | 872 |
of a professional employer organization agreement, completed by | 873 |
each client employer of the professional employer organization or | 874 |
professional employer organization reporting entity, authorizing | 875 |
the professional employer organization or professional employer | 876 |
organization reporting entity to act on behalf of the client | 877 |
employer in accordance with the requirements of this chapter. | 878 |
(4) Any rule adopted pursuant to division (K) of this section | 879 |
also shall include administrative requirements that permit a | 880 |
professional employer organization or a professional employer | 881 |
organization reporting entity to transmit any reporting and | 882 |
payment data required under division (K)(1) of this section | 883 |
collectively as a single filing with the director. | 884 |
(5) As used in division (K) of this section, "client | 885 |
employer," "professional employer organization," "professional | 886 |
employer organization agreement," "professional employer | 887 |
organization reporting entity," and "shared employee" have the | 888 |
same meanings as in section 4125.01 of the Revised Code. | 889 |
Sec. 5747.07. (A) As used in this section: | 890 |
(1) "Partial weekly withholding period" means a period during | 891 |
which an employer directly, indirectly, or constructively pays | 892 |
compensation to, or credits compensation to the benefit of, an | 893 |
employee, and that consists of a consecutive Saturday, Sunday, | 894 |
Monday, and Tuesday or a consecutive Wednesday, Thursday, and | 895 |
Friday. There are two partial weekly withholding periods each | 896 |
week, except that a partial weekly withholding period cannot | 897 |
extend from one calendar year into the next calendar year; if the | 898 |
first day of January falls on a day other than Saturday or | 899 |
Wednesday, the partial weekly withholding period ends on the | 900 |
thirty-first day of December and there are three partial weekly | 901 |
withholding periods during that week. | 902 |
(2) "Undeposited taxes" means the taxes an employer is | 903 |
required to deduct and withhold from an employee's compensation | 904 |
pursuant to section 5747.06 of the Revised Code that have not been | 905 |
remitted to the tax commissioner pursuant to this section or to | 906 |
the treasurer of state pursuant to section 5747.072 of the Revised | 907 |
Code. | 908 |
(3) A "week" begins on Saturday and concludes at the end of | 909 |
the following Friday. | 910 |
(4) "Client employer," "professional employer organization," | 911 |
"professional employer organization agreement," and "professional | 912 |
employer organization reporting entity" have the same meanings as | 913 |
in section 4125.01 of the Revised Code. | 914 |
(B) Except as provided in divisions (C) and (D) of this | 915 |
section and in division (A) of section 5747.072 of the Revised | 916 |
Code, every employer required to deduct and withhold any amount | 917 |
under section 5747.06 of the Revised Code shall file a return and | 918 |
shall pay the amount required by law as follows: | 919 |
(1) An employer who accumulates or is required to accumulate | 920 |
undeposited taxes of one hundred thousand dollars or more during a | 921 |
partial weekly withholding period shall make the payment of the | 922 |
undeposited taxes by the close of the first banking day after the | 923 |
day on which the accumulation reaches one hundred thousand | 924 |
dollars. If required under division (I) of this section, the | 925 |
payment shall be made by electronic funds transfer under section | 926 |
5747.072 of the Revised Code. | 927 |
(2)(a) Except as required by division (B)(1) of this section, | 928 |
an employer described in division (B)(2)(b) of this section shall | 929 |
make the payment of undeposited taxes within three banking days | 930 |
after the close of a partial weekly withholding period during | 931 |
which the employer was required to deduct and withhold any amount | 932 |
under this chapter. If required under division (I) of this | 933 |
section, the payment shall be made by electronic funds transfer | 934 |
under section 5747.072 of the Revised Code. | 935 |
(b) For amounts required to be deducted and withheld during | 936 |
1994, an employer described in division (B)(2)(b) of this section | 937 |
is one whose actual or required payments under this section | 938 |
exceeded one hundred eighty thousand dollars during the | 939 |
twelve-month period ending June 30, 1993. For amounts required to | 940 |
be deducted and withheld during 1995 and each year thereafter, an | 941 |
employer described in division (B)(2)(b) of this section is one | 942 |
whose actual or required payments under this section were at least | 943 |
eighty-four thousand dollars during the twelve-month period ending | 944 |
on the thirtieth day of June of the preceding calendar year. | 945 |
(3) Except as required by divisions (B)(1) and (2) of this | 946 |
section, if an employer's actual or required payments were more | 947 |
than two thousand dollars during the twelve-month period ending on | 948 |
the thirtieth day of June of the preceding calendar year, the | 949 |
employer shall make the payment of undeposited taxes for each | 950 |
month during which they were required to be withheld no later than | 951 |
fifteen days following the last day of that month. The employer | 952 |
shall file the return prescribed by the tax commissioner with the | 953 |
payment. | 954 |
(4) Except as required by divisions (B)(1), (2), and (3) of | 955 |
this section, an employer shall make the payment of undeposited | 956 |
taxes for each calendar quarter during which they were required to | 957 |
be withheld no later than the last day of the month following the | 958 |
last day of March, June, September, and December each year. The | 959 |
employer shall file the return prescribed by the tax commissioner | 960 |
with the payment. | 961 |
(C) The return and payment schedules prescribed by divisions | 962 |
(B)(1) and (2) of this section do not apply to the return and | 963 |
payment of undeposited school district income taxes arising from | 964 |
taxes levied pursuant to Chapter 5748. of the Revised Code. | 965 |
Undeposited school district income taxes shall be returned and | 966 |
paid pursuant to divisions (B)(3) and (4) of this section, as | 967 |
applicable. | 968 |
(D)(1) The requirements of division (B) of this section are | 969 |
met if the amount paid is not less than ninety-five per cent of | 970 |
the actual tax withheld or required to be withheld for the prior | 971 |
quarterly, monthly, or partial weekly withholding period, and the | 972 |
underpayment is not due to willful neglect. Any underpayment of | 973 |
withheld tax shall be paid within thirty days of the date on which | 974 |
the withheld tax was due without regard to division (D)(1) of this | 975 |
section. An employer described in division (B)(1) or (2) of this | 976 |
section shall make the payment by electronic funds transfer under | 977 |
section 5747.072 of the Revised Code. | 978 |
(2) If the tax commissioner believes that quarterly or | 979 |
monthly payments would result in a delay that might jeopardize the | 980 |
remittance of withholding payments, the commissioner may order | 981 |
that the payments be made weekly, or more frequently if necessary, | 982 |
and the payments shall be made no later than three banking days | 983 |
following the close of the period for which the jeopardy order is | 984 |
made. An order requiring weekly or more frequent payments shall be | 985 |
delivered to the employer personally or by certified mail and | 986 |
remains in effect until the commissioner notifies the employer to | 987 |
the contrary. | 988 |
(3) If compelling circumstances exist concerning the | 989 |
remittance of undeposited taxes, the commissioner may order the | 990 |
employer to make payments under any of the payment schedules under | 991 |
division (B) of this section. The order shall be delivered to the | 992 |
employer personally or by certified mail and shall remain in | 993 |
effect until the commissioner notifies the employer to the | 994 |
contrary. For purposes of division (D)(3) of this section, | 995 |
"compelling circumstances" exist if either or both of the | 996 |
following are true: | 997 |
(a) Based upon annualization of payments made or required to | 998 |
be made during the preceding calendar year and during the current | 999 |
calendar year, the employer would be required for the next | 1000 |
calendar year to make payments under division (B)(2) of this | 1001 |
section. | 1002 |
(b) Based upon annualization of payments made or required to | 1003 |
be made during the current calendar year, the employer would be | 1004 |
required for the next calendar year to make payments under | 1005 |
division (B)(2) of this section. | 1006 |
(E)(1) An employer described in division (B)(1) or (2) of | 1007 |
this section shall file, not later than the last day of the month | 1008 |
following the end of each calendar quarter, a return covering, but | 1009 |
not limited to, both the actual amount deducted and withheld and | 1010 |
the amount required to be deducted and withheld for the tax | 1011 |
imposed under section 5747.02 of the Revised Code during each | 1012 |
partial weekly withholding period or portion of a partial weekly | 1013 |
withholding period during that quarter. The employer shall file | 1014 |
the quarterly return even if the aggregate amount required to be | 1015 |
deducted and withheld for the quarter is zero dollars. At the time | 1016 |
of filing the return, the employer shall pay any amounts of | 1017 |
undeposited taxes for the quarter, whether actually deducted and | 1018 |
withheld or required to be deducted and withheld, that have not | 1019 |
been previously paid. If required under division (I) of this | 1020 |
section, the payment shall be made by electronic funds transfer. | 1021 |
The tax commissioner shall prescribe the form and other | 1022 |
requirements of the quarterly return. | 1023 |
(2) In addition to other returns required to be filed and | 1024 |
payments required to be made under this section, every employer | 1025 |
required to deduct and withhold taxes shall file, not later than | 1026 |
the thirty-first day of January of each year, an annual return | 1027 |
covering, but not limited to, both the aggregate amount deducted | 1028 |
and withheld and the aggregate amount required to be deducted and | 1029 |
withheld during the entire preceding year for the tax imposed | 1030 |
under section 5747.02 of the Revised Code and for each tax imposed | 1031 |
under Chapter 5748. of the Revised Code. At the time of filing | 1032 |
that return, the employer shall pay over any amounts of | 1033 |
undeposited taxes for the preceding year, whether actually | 1034 |
deducted and withheld or required to be deducted and withheld, | 1035 |
that have not been previously paid. The employer shall make the | 1036 |
annual report, to each employee and to the tax commissioner, of | 1037 |
the compensation paid and each tax withheld, as the commissioner | 1038 |
by rule may prescribe. | 1039 |
Each employer required to deduct and withhold any tax is | 1040 |
liable for the payment of that amount required to be deducted and | 1041 |
withheld, whether or not the tax has in fact been withheld, unless | 1042 |
the failure to withhold was based upon the employer's good faith | 1043 |
in reliance upon the statement of the employee as to liability, | 1044 |
and the amount shall be deemed to be a special fund in trust for | 1045 |
the general revenue fund. | 1046 |
(F) Each employer shall file with the employer's annual | 1047 |
return the following items of information on employees for whom | 1048 |
withholding is required under section 5747.06 of the Revised Code: | 1049 |
(1) The full name of each employee, the employee's address, | 1050 |
the employee's school district of residence, and in the case of a | 1051 |
nonresident employee, the employee's principal county of | 1052 |
employment; | 1053 |
(2) The social security number of each employee; | 1054 |
(3) The total amount of compensation paid before any | 1055 |
deductions to each employee for the period for which the annual | 1056 |
return is made; | 1057 |
(4) The amount of the tax imposed by section 5747.02 of the | 1058 |
Revised Code and the amount of each tax imposed under Chapter | 1059 |
5748. of the Revised Code withheld from the compensation of the | 1060 |
employee for the period for which the annual return is made. The | 1061 |
commissioner may extend upon good cause the period for filing any | 1062 |
notice or return required to be filed under this section and may | 1063 |
adopt rules relating to extensions of time. If the extension | 1064 |
results in an extension of time for the payment of the amounts | 1065 |
withheld with respect to which the return is filed, the employer | 1066 |
shall pay, at the time the amount withheld is paid, an amount of | 1067 |
interest computed at the rate per annum prescribed by section | 1068 |
5703.47 of the Revised Code on that amount withheld, from the day | 1069 |
that amount was originally required to be paid to the day of | 1070 |
actual payment or to the day an assessment is issued under section | 1071 |
5747.13 of the Revised Code, whichever occurs first. | 1072 |
(5) In addition to all other interest charges and penalties | 1073 |
imposed, all amounts of taxes withheld or required to be withheld | 1074 |
and remaining unpaid after the day the amounts are required to be | 1075 |
paid shall bear interest from the date prescribed for payment at | 1076 |
the rate per annum prescribed by section 5703.47 of the Revised | 1077 |
Code on the amount unpaid, in addition to the amount withheld, | 1078 |
until paid or until the day an assessment is issued under section | 1079 |
5747.13 of the Revised Code, whichever occurs first. | 1080 |
(G) An employee of a corporation, limited liability company, | 1081 |
or business trust having control or supervision of or charged with | 1082 |
the responsibility of filing the report and making payment, or an | 1083 |
officer, member, manager, or trustee of a corporation, limited | 1084 |
liability company, or business trust who is responsible for the | 1085 |
execution of the corporation's, limited liability company's, or | 1086 |
business trust's fiscal responsibilities, shall be personally | 1087 |
liable for failure to file the report or pay the tax due as | 1088 |
required by this section. The dissolution, termination, or | 1089 |
bankruptcy of a corporation, limited liability company, or | 1090 |
business trust does not discharge a responsible officer's, | 1091 |
member's, manager's, employee's, or trustee's liability for a | 1092 |
failure of the corporation, limited liability company, or business | 1093 |
trust to file returns or pay tax due. | 1094 |
(H) If an employer required to deduct and withhold income tax | 1095 |
from compensation and to pay that tax to the state under sections | 1096 |
5747.06 and 5747.07 of the Revised Code sells the employer's | 1097 |
business or stock of merchandise or quits the employer's business, | 1098 |
the taxes required to be deducted and withheld and paid to the | 1099 |
state pursuant to those sections prior to that time, together with | 1100 |
any interest and penalties imposed on those taxes, become due and | 1101 |
payable immediately, and that person shall make a final return | 1102 |
within fifteen days after the date of selling or quitting | 1103 |
business. The employer's successor shall withhold a sufficient | 1104 |
amount of the purchase money to cover the amount of the taxes, | 1105 |
interest, and penalties due and unpaid, until the former owner | 1106 |
produces a receipt from the tax commissioner showing that the | 1107 |
taxes, interest, and penalties have been paid or a certificate | 1108 |
indicating that no such taxes are due. If the purchaser of the | 1109 |
business or stock of merchandise fails to withhold purchase money, | 1110 |
the purchaser shall be personally liable for the payment of the | 1111 |
taxes, interest, and penalties accrued and unpaid during the | 1112 |
operation of the business by the former owner. If the amount of | 1113 |
taxes, interest, and penalties outstanding at the time of the | 1114 |
purchase exceeds the total purchase money, the tax commissioner in | 1115 |
the commissioner's discretion may adjust the liability of the | 1116 |
seller or the responsibility of the purchaser to pay that | 1117 |
liability to maximize the collection of withholding tax revenue. | 1118 |
(I)(1) An employer described in division (I)(2) of this | 1119 |
section shall make all payments required by this section for the | 1120 |
year by electronic funds transfer under section 5747.072 of the | 1121 |
Revised Code. | 1122 |
(2)(a) For 1994, an employer described in division (I)(2) of | 1123 |
this section is one whose actual or required payments under this | 1124 |
section exceeded five hundred thousand dollars during the | 1125 |
twelve-month period ending June 30, 1993. | 1126 |
(b) For 1995, an employer described in division (I)(2) of | 1127 |
this section is one whose actual or required payments under this | 1128 |
section exceeded five hundred thousand dollars during the | 1129 |
twelve-month period ending June 30, 1994. | 1130 |
(c) For 1996, an employer described in division (I)(2) of | 1131 |
this section is one whose actual or required payments under this | 1132 |
section exceeded three hundred thousand dollars during the | 1133 |
twelve-month period ending June 30, 1995. | 1134 |
(d) For 1997 through 2000, an employer described in division | 1135 |
(I)(2) of this section is one whose actual or required payments | 1136 |
under this section exceeded one hundred eighty thousand dollars | 1137 |
during the twelve-month period ending on the thirtieth day of June | 1138 |
of the preceding calendar year. | 1139 |
(e) For 2001 and thereafter, an employer described in | 1140 |
division (I)(2) of this section is one whose actual or required | 1141 |
payments under this section exceeded eighty-four thousand dollars | 1142 |
during the twelve-month period ending on the thirtieth day of June | 1143 |
of the preceding calendar year. | 1144 |
(J)(1) Every professional employer organization and every | 1145 |
professional employer organization reporting entity shall file a | 1146 |
report with the tax commissioner within thirty days after | 1147 |
commencing business in this state or within thirty days after the | 1148 |
effective date of this amendment, whichever is later, that | 1149 |
includes all of the following information: | 1150 |
(a) The name, address, number the employer receives from the | 1151 |
secretary of state to do business in this state, if applicable, | 1152 |
and federal employer identification number of each client employer | 1153 |
of the professional employer organization or professional employer | 1154 |
organization reporting entity; | 1155 |
(b) The date that each client employer became a client of the | 1156 |
professional employer organization or professional employer | 1157 |
organization reporting entity; | 1158 |
(c) The names and mailing addresses of the chief executive | 1159 |
officer and the chief financial officer of each client employer | 1160 |
for taxation of the client employer. | 1161 |
(2) Beginning with the calendar quarter ending after a | 1162 |
professional employer organization or professional employer | 1163 |
organization reporting entity files the report required under | 1164 |
division (J)(1) of this section, and every calendar quarter | 1165 |
thereafter, the professional employer organization or the | 1166 |
professional employer organization reporting entity shall file an | 1167 |
updated report with the tax commissioner. The professional | 1168 |
employer organization or professional employer organization | 1169 |
reporting entity shall file the updated report not later than the | 1170 |
last day of the month following the end of the calendar quarter | 1171 |
and shall include all of the following information in the report: | 1172 |
(a) If an entity became a client employer of the professional | 1173 |
employer organization or professional employer organization | 1174 |
reporting entity at any time during the calendar quarter, all of | 1175 |
the information required under division (J)(1) of this section for | 1176 |
each new client employer; | 1177 |
(b) If an entity terminated the professional employer | 1178 |
organization agreement between the professional employer | 1179 |
organization or professional employer organization reporting | 1180 |
entity and the entity at any time during the calendar quarter, the | 1181 |
information described in division (J)(1)(a) of this section for | 1182 |
that entity, the date during the calendar quarter that the entity | 1183 |
ceased being a client of the professional employer organization or | 1184 |
professional employer organization reporting entity, if | 1185 |
applicable, or the date the entity ceased business operations in | 1186 |
this state, if applicable; | 1187 |
(c) If the name or mailing address of the chief executive | 1188 |
officer or the chief financial officer of a client employer has | 1189 |
changed since the professional employer organization or | 1190 |
professional employer organization reporting entity previously | 1191 |
submitted a report under division (J)(1) or (2) of this section, | 1192 |
the updated name or mailing address, or both, of the chief | 1193 |
executive officer or the chief financial officer, as applicable; | 1194 |
(d) If none of the events described in divisions (J)(2)(a) to | 1195 |
(c) of this section occurred during the calendar quarter, a | 1196 |
statement of that fact. | 1197 |
Section 2. That existing sections 4123.291, 4125.01, 4125.02, | 1198 |
4125.03, 4125.05, 4125.07, 4125.08, 4141.24, and 5747.07 of the | 1199 |
Revised Code are hereby repealed. | 1200 |
Section 3. Section 4125.05 of the Revised Code as amended by | 1201 |
this act and section 4125.051 of the Revised Code as enacted by | 1202 |
this act take effect April 1, 2013. | 1203 |