Michigan Laws 338.3737 – Professional employer agreement; provisions; written notice to covered employee affected by agreement
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Terms Used In Michigan Laws 338.3737
- Client: means any person who enters into a professional employer agreement with a PEO. See Michigan Laws 338.3723
- Coemployment relationship: means a relationship that is intended to be an ongoing relationship rather than a temporary or project-specific one, wherein the rights, duties, and obligations of an employer arising out of an employment relationship have been allocated between coemployers pursuant to a professional employer agreement. See Michigan Laws 338.3723
- Covered employee: means an individual having a coemployment relationship with a PEO and a client who has received written notice of coemployment with the PEO and the individual has created a coemployment relationship pursuant to a professional employer agreement. See Michigan Laws 338.3723
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Professional employer agreement: means a written contract by and between a client and a PEO that provides for the following:
(i) Coemployment of covered employees. See Michigan Laws 338.3723
(1) Each professional employer agreement executed on or after September 1, 2012 shall include the following provisions:
(a) The responsibility of the PEO to pay wages to covered employees; to withhold, collect, report and remit payroll-related and unemployment taxes; and, to the extent the PEO has assumed responsibility in the professional employer agreement, to make payments for employee benefits for covered employees. For purposes of this subdivision, wages do not include any obligation between a client and a covered employee for payments beyond, or in addition to, the covered employee’s salary, draw, or regular rate of pay, including bonuses, commissions, severance pay, deferred compensation, profit sharing, or vacation, sick, or other paid time off pay, unless the PEO has expressly agreed to assume liability for those payments in the professional employer agreement.
(b) The hiring, disciplining, and termination by the PEO of a covered employee, as necessary to fulfill the PEO’s responsibilities under this act and the professional employer agreement. The client may also hire, discipline, and terminate a covered employee.
(c) The responsibility of the client and the PEO to comply with the worker’s disability compensation act of 1969, 1969 PA 317, MCL 418.101 to 418.941.
(2) Each professional employer agreement executed on or after September 1, 2012 shall require that the PEO provide written notice to each covered employee affected by the agreement regarding the general nature of the coemployment relationship between and among the PEO, the client, and that covered employee.