South Dakota Administrative Rules — Title 64 (Revenue)

ARSD § 64:06:02:89

Professional employer organization -- Definition of co-employment relationship

64:06:02:89. Professional employer organization -- Definition of co-employment relationship. A co-employment relationship results from a contract between a professional employer organization and a client company. In order for a co-employment relationship to exist, the contract must stipulate that:

# (1)

The professional employer organization assumes the responsibilities listed in this subdivision, including the payment of wages, salaries, payroll taxes, payroll deductions, workers compensation costs, insurance premiums, welfare benefits, and retirement benefits, and preparing and filing necessary tax returns and other documents as required by state or federal law;

# (2)

The client company must be the employer to any existing employees prior to the contractual relationship with the professional employment organization;

# (3)

The client company retains primary control over the hiring, firing, wage rates, salary increases, training, and directing the day-to-day activities of the co-employees;

# (4)

If the contractual relationship between the professional employer organization and the client company is terminated, then the co-employees' employment with the professional employer organization is also terminated;

# (5)

If a co-employee leaves the employment of the client company, that co-employee's employment is terminated with the professional employer organization; and

# (6)

The professional employment organization does not manage or direct the operation of the client company's business.

Last amended: Source: 25 SDR 167, effective July 1, 1999; 29 SDR 177, effective July 2, 2003. General Authority: SDCL 10-45-47.1(3). Law Implemented: SDCL 10-45-97. Rule 64:06:02:89.01 Application for a professional employer organization permit. Pirnat, Marge lrpr14296 2 1 2012-06-21T15:14:00Z 2012-06-21T15:14:00Z 1 189 1083 State of South Dakota 9 2 1270 10.6870 1024x768 Print Clean 64:06:02:89.01. Application for a professional employer organization permit. Each professional employer organization, doing bus

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