Ga. Comp. R. & Regs. R. 300-2-7-.07 - Employee Leasing Companies

Current through Rules and Regulations filed through April 4, 2022

(1) An employee leasing company (or professional employer organization) as that term is defined in O.C.G.A. Section 34-8-32 shall not be considered a succeeding employer under the provisions of O.C.G.A. Section 34-8-153 and O.C.G.A. Section 34-8-155 with respect to its clients or customers and shall not acquire the unemployment experience history of its clients or customers. The applicable rate of an employee leasing company shall be determined solely on its own unemployment experience after it became an employee leasing company, subject to the provisions of O.C.G.A. Section 34-8-153.
(2) An employee leasing company shall post a surety bond in the amount of the greater of $10,000.00 or two and seven-tenths percent (2.7%) of its taxable payroll for the four (4) calendar quarters ending June 30th immediately preceding the effective date of the bond to meet the requirements of O.C.G.A. Section 34-8-172. Such surety bond must be issued by an organization currently licensed and authorized to issue such bond in the State of Georgia and renewed on an annual basis in an adjusted amount as deemed appropriate. The bond shall cover a minimum of one full calendar year and shall also cover the remainder of the calendar year in which it is issued. The bond may not include a cancellation clause. In lieu of such bond, an employee leasing company may deposit with the Commissioner a cash deposit, irrevocable letter of credit or equivalent financial securities acceptable to the Commissioner. The cash deposit shall be a comparable amount as described above. Any deposit of money shall be retained by the Commissioner in an escrow account. Securities shall be in an amount equal to the greater of $10,000.00 or two and seven-tenths percent (2.7%) of the taxable payroll for the four (4) calendar quarters ending June 30thimmediately preceding the effective date of the election. At the sole discretion of the Commissioner, an adjustment in the amount of the bond, cash deposit, irrevocable letter of credit or securities may be required upon sixty (60) days prior written notice.
(3) Notwithstanding the foregoing, an employee leasing company may post a surety bond, irrevocable letter of credit or cash deposit in the amount of $5,000.00 and thereby comply with the provisions of this rule if all of the following conditions are met:
(a) The employee leasing company must have been a positive reserve employer as that term is used in O.C.G.A. Section 34-8-155 for at least four (4) consecutive quarters during the last twelve (12) quarters immediately preceding the effective date of the bond;
(b) The employee leasing company has not failed during the last twelve (12) quarters immediately preceding the effective date of the bond to file timely all required tax and wage reports, including all such reports of all predecessor employers; and
(c) The employee leasing company submits timely prepayments of unemployment contributions to the department monthly attributable to the applicable portion of the employee leasing company's taxable wage base of the employee leasing company's payroll for each calendar month just completed. This payment is due on the fifteenth (15th) of each month.
(4) The failure of the employee leasing company to submit the prepayment or to attach the supporting data as described herein shall subject the employer to a denial of the privilege to prepay and enjoy the lower bond rate. Should any employee leasing company so fail to submit prepayments and be notified by the Commissioner of the revocation of the privilege, all future employment on behalf of the employee leasing company's clients shall be under that client's name and separate DOL account number.
(5) Any employee leasing company which fails to obtain, or to keep in full force and effect the applicable surety bond, irrevocable letter of credit, cash deposit or acceptable securities must report all employment of its clients under the client's name and DOL account number, provided, however, the department shall notify any such client in writing of this eventuality. No employer who is a client of an employee leasing company shall be liable for unemployment contributions for employment previously reported by an employee leasing company until such notification has been received by that employer. Such employer will be liable for contributions only for the period of employment which occurs after the notice has been received. An employee leasing company which elects to treat its clients' employees as its own employees must post the bond required by O.C.G.A. Section 34-8-172. An employee leasing company which is unable to obtain a bond automatically elects to treat each client's employees as the client's employees and not employees of the employee leasing company. An employee leasing company cannot do both, i.e., it cannot add certain clients' employees to its own payroll but not include others simply to take advantage of lower unemployment tax rates. A wilful violation of this rule may result in termination of the employee leasing company's privilege to make such election. In the event of such termination of election, under the provisions of these rules, no successorship will occur, therefore a new taxable wage base for the particular calendar year will apply at the time of the termination of election.
(6) If an employee leasing company is new in Georgia and has no previous employment history, the amount of the initial bond, irrevocable letter of credit, cash deposit or securities shall be $10,000.00 for the first calendar year. Once the employee leasing company has been in business over six (6) months, the amount for the next calendar year's bond, cash deposit or securities may be computed based upon a pro rata estimate of its taxable wages for the four (4) calendar quarters ending June 30th immediately preceding the effective date of the bond. Any surety bond in effect will cease to be in force and effect as of the expiration date of such bond, provided all applicable unemployment contributions which cover this time period have been paid.
(7) All employee leasing companies doing business in Georgia, regardless of whether an adequate bond, irrevocable letter of credit, cash deposit or securities are posted shall maintain and furnish to the department upon request the following records:
(a) A current list of all clients or customers in Georgia by corporate name and by trade name;
(b) A physical and mailing address, if different, for all such clients or customers;
(c) A listing of previous DOL registrations by DOL account number for the clients or customers;
(d) Separate books or records with respect to each client or customer must be maintained, showing, at a minimum, all evidence of wages and other compensation paid to, or on behalf of, the employees, records of hours and days worked and the location where the worker's services were performed;
(e) Names, residence addresses, social security numbers, ownership interests in the employee leasing company, and positions of employment in the employee leasing company of all officers of the employee leasing company;
(f) The federal employer identification number for all clients or customers; and
(g) The employee leasing company must notify the department of any additions, deletions or corrections to the above-described information at least quarterly.
(8) If, after the employee leasing company makes the required deposit, the employee leasing company fails to comply with the Employment Security Law, the department will use the bond, irrevocable letter of credit, cash deposit or securities (or proceeds from the sale of the same) to pay contributions, interest, and penalty due on the account. The department may then require a new deposit, or may require the employee leasing company to separately report all employment under its clients' names and account number and applicable tax rate of each client or customer.
(9) Interest earned on cash deposits will be paid into the same fund as other interest and penalties are paid as provided in O.C.G.A. Section 34-8-92.
(10) All information furnished to the department under this rule shall be treated as confidential information as provided in Code Section 34-8-121.

Notes

Ga. Comp. R. & Regs. R. 300-2-7-.07
O.C.G.A. Secs. 34-8-32, 34-8-70, 34-8-78, 34-8-92, 34-8-121, 34-8-123, 34-8-153, 34-8-155, 34-8-172.
Original Rule entitled "Exceptions" adopted. F. and eff. May 18, 1965. Repealed: New Rule entitled "Mass Separation" adopted. F. May 20, 1966; eff. June 8, 1966. Repealed: New Rule entitled "Employer Notice of Refusal of Suitable Work" adopted. F. Oct. 16, 1974; eff. Nov. 5, 1974. Amended: F. Nov. 4, 1976; eff. Nov. 24, 1976. Repealed: New Rule of same title adopted. F. June 29, 1979; eff. July 19, 1979. Repealed: New Rule entitled "Partial Unemployment" adopted. F. Oct. 24, 1983; eff. Nov. 13, 1983. Repealed: New Rule entitled "Employer Notice of Refusal of Recall for Suitable Work" adopted. F. Apr. 5, 1991; eff. Apr. 25, 1991. Repealed: New Rule entitled "Employee Leasing Companies" adopted. F. Aug. 28, 1992; eff. Sept. 17, 1992. Amended: F. June 25, 1998; eff. July 15, 1998. Amended: F. Dec. 9, 2005; eff. Jan. 1, 2006, as specified by the Agency.

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