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Am. Sub. H. B. No. 183As Passed by the HouseAs Passed by the House
125th General Assembly | Regular Session | 2003-2004 |
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REPRESENTATIVES Daniels, Allen, C. Evans, Seitz, Setzer, Raga, Ujvagi, Young, McGregor, Barrett, Carano, Cates, Chandler, Cirelli, Clancy, DeBose, Domenick, Jolivette, Niehaus, Olman, T. Patton, Schaffer, Schlichter, Schmidt, Webster, Yates
A BILL
To amend sections 4123.01 and 4123.291 and to enact sections 4125.01
to 4125.08 and 4125.99 of the Revised Code to
register professional employer organizations for
purposes of enforcing compliance with workers'
compensation laws.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 4123.01 and 4123.291 be amended and sections
4125.01, 4125.02, 4125.03, 4125.04, 4125.05, 4125.06, 4125.07,
4125.08, and
4125.99 of the Revised Code be enacted to read as
follows:
Sec. 4123.01. As used in this chapter: (a) Every person in the service of the state, or of any
county, municipal corporation, township, or school district
therein, including regular members of lawfully constituted police
and fire departments of municipal corporations and townships,
whether paid or volunteer, and wherever serving within the state
or on temporary assignment outside thereof, and executive officers
of boards of education, under any appointment or contract of hire,
express or implied, oral or written, including any elected
official of the state, or of any county, municipal corporation, or
township, or members of boards of education. As used in division (A)(1)(a) of this section, the term "employee" includes the following persons when
responding to an inherently dangerous situation
that calls for an
immediate response on the part of the person,
regardless of
whether the person is within the limits of the
jurisdiction of the
person's regular employment or voluntary
service when responding,
on the condition that the person responds
to the situation as the
person otherwise would if the person were
on duty in the person's
jurisdiction: (i) Off-duty peace officers. As used in division
(A)(1)(a)(i) of this section, "peace officer"
has the same meaning as in
section
2935.01 of the Revised
Code. (ii) Off-duty firefighters, whether paid or volunteer, of a
lawfully constituted fire department. (iii) Off-duty first responders, emergency medical
technicians-basic, emergency medical technicians-intermediate, or
emergency medical technicians-paramedic, whether paid or
volunteer, of an ambulance service organization or emergency
medical service organization pursuant to Chapter 4765. of the
Revised Code. (b) Every person in the service of any person, firm, or
private corporation, including any public service corporation,
that (i) employs one or more persons regularly in the same
business or in or about the same establishment under any contract
of hire, express or implied, oral or written, including aliens and
minors, household workers who earn one hundred sixty dollars or
more in cash in any calendar quarter from a single household and
casual workers who earn one hundred sixty dollars or more in cash
in any calendar quarter from a single employer, or (ii) is bound
by any such contract of hire or by any other written contract, to
pay into the state insurance fund the premiums provided by this
chapter. (c) Every person who performs labor or provides services
pursuant to a construction contract, as defined in section 4123.79
of the Revised Code, if at least ten of the following criteria
apply: (i) The person is required to comply with instructions from
the other contracting party regarding the manner or method of
performing services; (ii) The person is required by the other contracting party
to have particular training; (iii) The person's services are integrated into the regular
functioning of the other contracting party; (iv) The person is required to perform the work personally; (v) The person is hired, supervised, or paid by the other
contracting party; (vi) A continuing relationship exists between the person and
the other contracting party that contemplates continuing or
recurring work even if the work is not full time; (vii) The person's hours of work are established by the
other contracting party; (viii) The person is required to devote full time to the
business of the other contracting party; (ix) The person is required to perform the work on the
premises of the other contracting party; (x) The person is required to follow the order of work set
by the other contracting party; (xi) The person is required to make oral or written reports
of progress to the other contracting party; (xii) The person is paid for services on a regular basis
such as hourly, weekly, or monthly; (xiii) The person's expenses are paid for by the other
contracting party; (xiv) The person's tools and materials are furnished by the
other contracting party; (xv) The person is provided with the facilities used to
perform services; (xvi) The person does not realize a profit or suffer a loss
as a result of the services provided; (xvii) The person is not performing services for a number of
employers at the same time; (xviii) The person does not make the same services available
to the general public; (xix) The other contracting party has a right to discharge
the person; (xx) The person has the right to end the relationship with
the other contracting party without incurring liability pursuant
to an employment contract or agreement. Every person in the service of any independent contractor or
subcontractor who has failed to pay into the state insurance fund
the amount of premium determined and fixed by the administrator of
workers' compensation for the person's employment or occupation or
if a self-insuring employer has failed to pay compensation and
benefits directly to the employer's injured and to the dependents
of the employer's killed employees as required by section 4123.35
of the Revised Code, shall be considered as the employee of the
person who has entered into a contract, whether written or verbal,
with such independent contractor unless such employees or their
legal representatives or beneficiaries elect, after injury or
death, to regard such independent contractor as the employer. (2) "Employee" does not mean: (a) A duly ordained, commissioned, or licensed minister or
assistant or associate minister of a church in the exercise of
ministry; (b) Any officer of a family farm corporation; or (c) An individual who otherwise is an employee of an employer but who signs the waiver and affidavit specified in section 4123.15 of the Revised Code on the condition that the administrator has granted a waiver and exception to the individual's employer under section 4123.15 of the Revised Code. Any employer may elect to include as an "employee" within
this chapter, any person excluded from the definition of
"employee" pursuant to division (A)(2) of this section. If an
employer is a partnership, sole proprietorship, or family farm
corporation, such employer may elect to include as an "employee"
within this chapter, any member of such partnership, the owner of
the sole proprietorship, or the officers of the family farm
corporation. In the event of an election, the employer shall
serve upon the bureau of workers' compensation written notice
naming the persons to be covered, include such employee's
remuneration for premium purposes in all future payroll reports,
and no person excluded from the definition of "employee" pursuant
to division (A)(2) of this section, proprietor, or partner shall
be deemed an employee within this division until the employer has
served such notice. For informational purposes only, the bureau shall prescribe
such language as it considers appropriate, on such of its forms as
it considers appropriate, to advise employers of their right to
elect to include as an "employee" within this chapter a sole
proprietor, any member of a partnership, the officers of a family
farm corporation, or a person excluded from the definition of
"employee" under division (A)(2)(a) of this section, that they
should check any health and disability insurance policy, or other
form of health and disability plan or contract, presently covering
them, or the purchase of which they may be considering, to
determine whether such policy, plan, or contract excludes benefits
for illness or injury that they might have elected to have covered
by workers' compensation. (1) The state, including state hospitals, each county,
municipal corporation, township, school district, and hospital
owned by a political subdivision or subdivisions other than the
state; (2) Every person, firm, professional employer organization as defined in section 4125.01 of the Revised Code, and private corporation, including
any public service corporation, that (a) has in service one or
more employees or shared employees regularly in the same business or in or about the
same establishment under any contract of hire, express or implied,
oral or written, or (b) is bound by any such contract of hire or
by any other written contract, to pay into the insurance fund the
premiums provided by this chapter. All such employers are subject to this chapter. Any member
of a firm or association, who regularly performs manual labor in
or about a mine, factory, or other establishment, including a
household establishment, shall be considered an employee in
determining whether such person, firm, or private corporation, or
public service corporation, has in its service, one or more
employees and the employer shall report the income derived from
such labor to the bureau as part of the payroll of such employer,
and such member shall thereupon be entitled to all the benefits of
an employee. (C) "Injury" includes
any injury, whether caused by external
accidental means
or accidental in character and result, received
in the course of,
and arising out of, the injured employee's
employment. "Injury" does not include: (1) Psychiatric conditions except where the conditions
have
arisen from an injury or occupational disease; (2) Injury or disability caused primarily by the natural
deterioration of tissue, an organ, or part of the body; (3) Injury or disability incurred in voluntary
participation
in an employer-sponsored recreation or fitness
activity if the
employee signs a waiver of the employee's right to
compensation or
benefits under this chapter prior to engaging in
the recreation or
fitness activity. (D) "Child" includes a posthumous child and a child legally
adopted prior to the injury. (E) "Family farm corporation" means a corporation founded
for the purpose of farming agricultural land in which the majority
of the voting stock is held by and the majority of the
stockholders are persons or the spouse of persons related to each
other within the fourth degree of kinship, according to the rules
of the civil law, and at least one of the related persons is
residing on or actively operating the farm, and none of whose
stockholders are a corporation. A family farm corporation does
not cease to qualify under this division where, by reason of any
devise, bequest, or the operation of the laws of descent or
distribution, the ownership of shares of voting stock is
transferred to another person, as long as that person is within
the degree of kinship stipulated in this division. (F) "Occupational disease" means a disease contracted in the
course of employment, which by its causes and the characteristics
of its manifestation or the condition of the employment results in
a hazard which distinguishes the employment in character from
employment generally, and the employment creates a risk of
contracting the disease in greater degree and in a different
manner from the public in general. (G) "Self-insuring employer" means an employer who is
granted the privilege of paying compensation and benefits directly
under section 4123.35 of the Revised Code, including a board of
county commissioners for the sole purpose of constructing a sports
facility as defined in section 307.696 of the Revised Code,
provided that the electors of the county in which the sports
facility is to be built have approved construction of a sports
facility by ballot election no later than November 6, 1997. (H) "Public employer" means an employer as defined in
division (B)(1) of this section.
Sec. 4123.291. (A) An adjudicating committee appointed by
the administrator of workers' compensation to hear any matter
specified in divisions (B)(1) to (6)(7) of this section shall hear
the matter within sixty days of the date on which an employer
files the request, protest, or petition.
An employer desiring to
file a request, protest, or petition regarding any matter
specified in divisions (B)(1) to (6)(7) of this section shall file
the request, protest, or petition to the adjudicating committee on
or before twenty-four months after the administrator sends
notice
of the determination about which the employer is filing the
request, protest, or petition. (B) An employer who is adversely affected by a decision of
an adjudicating committee appointed by the administrator may
appeal the decision of the committee to
the administrator or
the
administrator's designee. The
employer
shall file the appeal
in
writing within thirty days after the employer
receives the
decision of the adjudicating committee. The administrator
or
the
designee shall hear the appeal and hold a hearing,
provided
that
the decision of the
adjudicating committee relates to one of
the
following: (1) An employer request for a waiver of a default in the
payment of premiums pursuant to section 4123.37 of the Revised
Code; (2) An employer request for the settlement of liability as
a
noncomplying employer under section 4123.75 of the Revised
Code; (3) An employer petition objecting to the assessment of a
premium pursuant to section 4123.37 of the Revised Code and the
rules adopted pursuant to that section; (4) An employer request for the abatement of penalties
assessed pursuant to section 4123.32 of the Revised Code and the
rules adopted pursuant to that section; (5) An employer protest relating to an audit finding or a
determination of a manual classification, experience rating, or
transfer or combination of risk experience; (6) Any decision relating to any other risk premium matter
under Chapters 4121., 4123., and 4131. of the Revised Code; (7) An employer petition objecting to the amount of security required under division (C) of section 4125.05 of the Revised Code and the rules adopted pursuant to that section.
Sec. 4125.01. As used in this chapter:
(A) "Client employer" means a sole proprietor, partnership,
association, limited liability company, or corporation that enters
into a professional employer organization agreement and is
assigned shared employees by the professional employer
organization.
(B) "Coemploy" means the sharing of the responsibilities and
liabilities of being an employer.
(C) "Professional employer organization" means a sole
proprietor, partnership, association, limited liability company,
or corporation that enters into an agreement with one or more
client employers for the purpose of coemploying all or part of the
client employer's workforce at the client employer's work site.
(D) "Professional employer organization agreement" means a
written contract between a professional employer organization and
a client employer to coemploy employees for a duration of not less
than twelve months in accordance with the requirements of this
chapter.
(E) "Shared employee" means an individual intended to be
assigned to a client employer on a permanent basis, not as a
temporary supplement to the client employer's workforce, who is
coemployed by a professional employer organization and a client
employer pursuant to a professional employer organization
agreement.
Sec. 4125.02. The administrator of the bureau of workers'
compensation shall adopt rules in accordance with Chapter 119. of
the Revised Code to administer and enforce this chapter.
Sec. 4125.03. (A) The professional employer organization with
whom a shared employee is coemployed shall do all of the
following:
(1) Pay wages associated with
a shared employee pursuant to
the terms and conditions of compensation in the
professional
employer organization agreement between the
professional employer
organization and the client employer;
(2) Pay all related payroll taxes associated with a shared
employee independent of the terms and conditions contained in the
professional employer organization agreement between the
professional employer organization and the client employer; (3) Maintain workers' compensation coverage, pay all
workers' compensation premiums and manage all
workers'
compensation claims, filings, and related procedures associated
with a shared employee in
compliance with Chapters 4121. and 4123.
of the Revised Code, except
that when shared employees include
family farm officers, ordained
ministers, or corporate officers of
the client employer, payroll
reports shall include the entire
amount of payroll associated with
those persons;
(4) Provide written notice to each shared employee it
assigns to perform services to a client employer of the
relationship between and the responsibilities of the professional
employer organization and the client employer;
(5) Maintain complete records separately listing the manual classifications of each client employer and the payroll reported to each manual classification for each client employer for each payroll reporting period during the time period covered in the professional employer organization agreement; (6) Maintain a record of workers' compensation claims for each client employer.
(B) The professional employer organization with whom a
shared employee is coemployed has a right of direction and
control over each shared employee assigned to a client employer's
location.
(C) Notwithstanding division (B) of this section, a client
employer may retain sufficient direction and control over a shared
employee as is necessary to conduct the client employer's business
and to discharge any fiduciary responsibility that it may have, or
to comply with any applicable licensure, regulatory, or statutory
requirement of the client employer.
Sec. 4125.04. (A) When a client employer enters into a
professional employer organization agreement with a professional
employer organization, the professional employer organization
is
the employer of record and the succeeding employer for
the
purposes of determining a workers' compensation experience
rating
pursuant to Chapter 4123. of the Revised Code.
(B) Pursuant to Section 35 of Article II, Ohio
Constitution and section 4123.74 of the Revised Code, the
exclusive remedy for a shared employee to recover for injuries,
diseases, or death incurred in the course of and arising out of
the employment relationship against either the professional
employer organization or the client employer are those benefits
provided under Chapters 4121. and 4123. of the Revised Code.
Sec. 4125.05. (A) Not later than thirty days after the
effective date of this section or not later than thirty days
after the formation of a professional employer organization,
whichever date occurs later, a professional employer organization
operating in this state shall register with the administrator of
the bureau of workers' compensation on forms provided by the
administrator. Following initial registration, each professional
employer organization shall register with the administrator
annually on or before the thirty-first day of December.
(B) Initial registration and each annual registration
renewal shall include all of the following:
(1) A list of each of the professional employer
organization's client employers current as of the date of
registration for purposes of initial registration or current as of
the date of annual registration renewal, or within fourteen days of adding or releasing a client
that includes
the client employer's name, address, federal tax
identification
number, and bureau of workers' compensation risk
number;
(2) A fee as determined by the administrator;
(3) Any other information required by the administrator.
(C) The administrator, with the advice and consent of the
workers' compensation oversight commission, may adopt rules in
accordance with Chapter 119. of the Revised Code to require
professional employer organizations to provide security in the
form of a bond or letter of credit assignable to the Ohio bureau of workers' compensation not to exceed an amount equal
to the premiums and assessments incurred for the two most recent payroll periods,
prior to any discounts or dividends, to meet the financial
obligations of the professional employer organizations pursuant to
this chapter and Chapters 4121. and 4123. of the Revised
Code. A professional employer organization may appeal the amount of the security required under this section in accordance with section 4123.291 of the Revised Code. (D) Notwithstanding division (C) of this
section, a professional employer organization that qualifies for
self-insurance or retrospective rating under section 4123.29 or
4123.35 of the Revised Code shall abide by the financial
disclosure and security requirements pursuant to those sections and
the rules adopted under those sections in place of the
requirements set forth in division (C) of this
section. (E)
Except to the extent necessary for the administrator to
administer the statutory duties of the administrator and for
employees of the state to perform their official duties, all
records, reports, client lists, and other information obtained
from a professional employer organization under divisions (A) and
(B) of this section are confidential and shall not be published or
open to public inspection.
Sec. 4125.06. (A) In accordance with Chapter 119. of the
Revised Code, the administrator of the bureau of workers'
compensation may deny registration or revoke the registration of a
professional employer organization and rescind its status as a
coemployer upon reasonable belief that the professional employer
organization has done any of the following:
(1) Obtained or attempted to obtain registration through
misrepresentation, misstatement, or fraud;
(2) Misappropriated or converted to its own, or improperly
withheld, money required to be held in a fiduciary capacity in
accordance with Chapters 4121. and 4123. of the Revised Code;
(3) Used fraudulent, coercive, or dishonest practices or
demonstrated incompetence, untrustworthiness, or financial
irresponsibility;
(4) Failed to appear, without reasonable cause or excuse, in
response to a subpoena lawfully issued by the administrator of the
bureau of workers' compensation;
(5) Failed to comply with the requirements of this chapter.
(B) Upon revocation of the registration of a professional
employer organization, all client employers associated with that
professional employer organization shall file payroll reports and
pay workers' compensation premiums directly to the administrator
on its own behalf at a rate determined by the administrator based
solely on the claims experience of the client employer. (C) Upon revocation of a professional employer organization's
registration, each client employer associated with that
professional employer organization shall file on its own behalf
the appropriate
documents or data with all state and federal
agencies as required
by law with respect to any shared employee
the client employer and the
professional employer organization
shared. Sec. 4125.07. Not later than fourteen calendar days after the
date on which a professional employer organization agreement is
terminated, the professional employer organization is adjudged
bankrupt, the professional employer organization ceases operations
within the state of Ohio, or the registration of the professional
employer organization is revoked, the professional employer
organization shall submit to the administrator of the bureau of
workers' compensation and each client employer associated with
that professional employer organization a completed workers'
compensation lease termination notice form provided by the
administrator. The completed form shall include all client
payroll and claim information listed in a format specified
by the administrator and notice of all workers'
compensation claims that have been reported to the professional
employer organization in accordance with its internal reporting
policies.
Sec. 4125.08. Nothing in this chapter exempts a professional
employer organization, client employer, or shared employee from
any applicable federal, state, or local licensing, registration,
or certification statutes or regulations. An individual required
to obtain and maintain a license, registration, or certification
under law and who is a shared employee of a professional employer
organization and a client employer is an employee of the client employer for
purposes of obtaining and maintaining the appropriate license,
registration, or certification as required by law. A professional
employer organization does not engage in any occupation, trade, or
profession that requires a license, certification, or registration
solely by entering into a professional employer agreement with a
client employer or coemploying a shared employee.
Sec. 4125.99. Whoever violates section 4125.05 of the Revised
Code is guilty of a minor misdemeanor. Whoever knowingly violates
section 4125.05 of the Revised Code is guilty of a misdemeanor of
the second degree.
Section 2. That existing sections 4123.01 and 4123.291 of the Revised Code
are hereby repealed. Section 3. Section 4123.01 of the Revised Code is presented in
this act as a composite of the section as amended by both H.B. 675 and Am. Sub. S.B. 223 of
the 124th General Assembly. The General Assembly, applying the
principle stated in division (B) of section 1.52 of the Revised
Code that amendments are to be harmonized if reasonably capable of
simultaneous operation, finds that the composite is the resulting
version of the section in effect prior to the effective date of
the section as presented in this act.
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