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.