Except as provided in Subsection (2) or (4), as of the day a person applies for licensure or renewal of a license and at all times while licensed, a professional employer organization or collectively a professional employer organization group shall:
Terms Used In Utah Code 31A-40-205
Assurance organization: means a person designated as an assurance organization in accordance with Section 31A-40-303. See Utah Code 31A-40-102
controlling person: means a person who, individually or acting in concert with one or more persons, owns, directly or indirectly, 10% or more of the equity interest in a professional employer organization. See Utah Code 31A-40-102
Covered employee: means an individual who has a coemployment relationship with a client and a professional employer organization if the conditions of Section 31A-40-203 are met. See Utah Code 31A-40-102
Employee: means :
(a)
an individual employed by an employer; or
(b)
an individual who meets the requirements of Subsection (53)(b). See Utah Code 31A-1-301
Insurance: includes :
(i)
a risk distributing arrangement providing for compensation or replacement for damages or loss through the provision of a service or a benefit in kind;
(ii)
a contract of guaranty or suretyship entered into by the guarantor or surety as a business and not as merely incidental to a business transaction; and
(iii)
a plan in which the risk does not rest upon the person who makes an arrangement, but with a class of persons who have agreed to share the risk. See Utah Code 31A-1-301
License: includes a certificate of authority issued to an insurer. See Utah Code 31A-1-301
Member: means a person having membership rights in an insurance corporation. See Utah Code 31A-1-301
Person: includes :
(a)
an individual;
(b)
a partnership;
(c)
a corporation;
(d)
an incorporated or unincorporated association;
(e)
a joint stock company;
(f)
a trust;
(g)
a limited liability company;
(h)
a reciprocal;
(i)
a syndicate; or
(j)
another similar entity or combination of entities acting in concert. See Utah Code 31A-1-301
professional employer organization: means a person engaged in the business of providing a professional employer service. See Utah Code 31A-40-102
Professional employer organization group: means two or more professional employer organizations that are majority owned or commonly controlled or directed by the same one or more persons. See Utah Code 31A-40-102
Security: means a:
(i)
note;
(ii)
stock;
(iii)
bond;
(iv)
debenture;
(v)
evidence of indebtedness;
(vi)
certificate of interest or participation in a profit-sharing agreement;
(vii)
collateral-trust certificate;
(viii)
preorganization certificate or subscription;
(ix)
transferable share;
(x)
investment contract;
(xi)
voting trust certificate;
(xii)
certificate of deposit for a security;
(xiii)
certificate of interest of participation in an oil, gas, or mining title or lease or in payments out of production under such a title or lease;
(xiv)
commodity contract or commodity option;
(xv)
certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase any of the items listed in Subsections (171)(a)(i) through (xiv); or
(xvi)
another interest or instrument commonly known as a security. See Utah Code 31A-1-301
Working capital: means the current assets minus the current liabilities of a professional employer organization determined in accordance with generally accepted accounting principles. See Utah Code 31A-40-102
(a)
have at least $100,000 in working capital as determined by generally accepted accounting principles; or
(b)
provide to the commissioner one of the following in an amount equal to or greater than an amount calculated by subtracting the amount of working capital of the professional employer organization or professional employer organization group from $100,000:
(i)
a bond;
(ii)
an irrevocable letter of credit;
(iii)
one or more credits or securities as determined by the market value of the credits or securities; or
(iv)
a combination of Subsections (1)(b)(i) through (iii).
(2)
(a)
Except as provided in Subsection (2)(c), the license of a professional employer organization or professional employer organization group terminates 180 days from the day on which the commissioner finds that the professional employer organization has less than $100,000 in working capital, unless the professional employer organization or professional employer organization group eliminates the deficiency within 180 days of the day on which the commissioner makes the finding.
(b)
During the 180-day period described in Subsection (2)(a), the professional employer organization or professional employer organization group shall submit quarterly to the commissioner:
(i)
a quarterly financial statement; and
(ii)
an attestation that:
(A)
is signed by:
(I)
the chief executive officer or a controlling person of the professional employer organization; or
(II)
for a professional employer organization group, the chief executive officer or chief financial officer of each member of the professional employer organization group; and
(B)
states that all of the following are paid for a covered employee when due by the professional employer organization or each member of the professional employer organization group:
(I)
compensation;
(II)
a benefit;
(III)
a payroll-related tax;
(IV)
an unemployment insurance contribution;
(V)
withholding of compensation for a covered employee;
(VI)
workers’ compensation premium; or
(VII)
another assessment paid by a professional employer organization to or on behalf of a covered employee under a professional employer agreement.
(c)
The license of a professional employer organization or professional employer organization group terminates on the day on which the commissioner finds that the professional employer organization:
(i)
has negative working capital; and
(ii)
(A)
is incapable of continued operations; or
(B)
poses an immediate threat to the public welfare.
(3)
A bond, letter of credit, or security described in Subsection (1) shall:
(a)
be held as designated by the commissioner; and
(b)
secure payment by the professional employer organization or the professional employer organization group of the following payments or other entitlements due to or with respect to a covered employee, if the professional employer organization or each member of the professional employer organization group does not make a payment when due:
(i)
compensation of a covered employee;
(ii)
a benefit for a covered employee;
(iii)
payroll-related taxes;
(iv)
unemployment insurance contributions; and
(v)
workers’ compensation premiums.
(4)
A professional employer organization is exempt from this section if the professional employer organization is licensed:
(a)
through an assurance organization in accordance with Section 31A-40-303; or
(b)
under this chapter with a small operation license in accordance with Section 31A-40-304.
