CHAPTER 43-55PROFESSIONAL EMPLOYER ORGANIZATIONS43-55-01. Definitions. As used in this chapter:1."Administrative fee" means the fee charged to a client by a professional employer<br>organization for professional employer services.The term does not include anyamount of a fee which is for wages and salaries, benefits, workers' compensation<br>coverage, payroll taxes, withholding, or other assessment paid by the professional<br>employer organization to or on behalf of a covered employee under a professional<br>employer agreement.2."Client" means any person that enters a professional employer agreement with a<br>professional employer organization.3."Coemployer" means either a professional employer organization or a client.4."Coemployment relationship" means a relationship that is intended to be an ongoing<br>relationship rather than a temporary or project-specific relationship, wherein the<br>rights, duties, and obligations of an employer which arise out of an employment<br>relationship have been allocated between coemployers under a professional<br>employer agreement and this chapter.5."Covered employee" means an individual having a coemployment relationship with a<br>professional employer organization and a client, who has received written notice of<br>coemploymentwiththeprofessionalemployerorganization,andwhosecoemployment relationship is under a professional employer agreement subject to<br>this chapter.An individual who is an officer, director, shareholder, partner, ormanager of the client is a "covered employee" to the extent the professional<br>employer organization and the client have expressly agreed in the professional<br>employer agreement that the individual is a covered employee and if the individual<br>meets the criteria of this subsection and acts as an operational manager or performs<br>day-to-day operational services for the client.6."Licensee" means a professional employer organization licensed under this chapter.7."Professional employer agreement" means a written contract between a client and a<br>professional employer organization which provides for the coemployment of a<br>covered employee, for the allocation of employer rights and obligations between the<br>client and the professional employer organization with respect to a covered<br>employee, and the assumption of the responsibilities required by this chapter.8."Professional employer organization" means a person engaged in the business of<br>providing professional employer services.The term does not include anarrangement through which a person that does not have as its principal business<br>activity the practice of entering a professional employer arrangement and does not<br>hold itself out as a professional employer organization and that shares an employee<br>with a commonly owned company within the meaning of section 414(b) and (c) of<br>the Internal Revenue Code of 1986; an independent contractor arrangement through<br>which a person assumes responsibility for a product produced or a service<br>performed by the person or the person's agents and retains and exercises primary<br>direction and control over the work performed by an individual whose services are<br>supplied under the arrangement; or the provision of temporary help services.9."Professional employer services"means the entering of a coemploymentrelationship under this chapter.Page No. 110."Temporary help services" means services consisting of a person recruiting and<br>hiring its own employees; finding another organization that needs the services of<br>those employees; assigning those employees to perform work at or services for the<br>other organization to support or supplement the other organization's workforce, to<br>provide assistance in special work situations, such as an employee absence, skill<br>shortage, or seasonal workload or to perform a special assignment or project; and<br>customarily attempting to reassign the employees to another organization when the<br>employers finish each assignment.43-55-02. Rights, duties, and obligations unaffected.1.Neither this chapter nor a professional employer agreement may affect, modify, or<br>amend a collective bargaining agreement or any right or obligation of a client,<br>professional employer organization, or covered employee under federal law.2.Neither this chapter nor a professional employer agreement may:a.Diminish, abolish, or remove any right of a covered employee to a client or<br>obligation of the client to a covered employee existing before the effective date<br>of the professional employer agreement.b.Affect, modify, or amend any contractual relationship or restrictive covenant<br>between a covered employee and a client in effect at the time a professional<br>employer agreement becomes effective or prohibit or amend a contractual<br>relationship or restrictive covenant that is entered subsequently between a<br>client and a covered employee.3.A covered employee who is required under law to be licensed, registered, or certified<br>is deemed solely an employee of the client for purposes of the license, registration,<br>or certification requirement.4.Unless otherwise provided by this chapter, a professional employer organization is<br>not deemed to engage in any occupation, trade, profession, or other activity that is<br>subject to licensing, registration, or certification requirements or is otherwise<br>regulated solely by entering and maintaining a coemployment relationship with a<br>covered employee who is subject to the requirement.5.A client has the sole right of direction and control of the professional or licensed<br>activities of a covered employee and of the client's business.The coveredemployee and client remain subject to regulation by the entity responsible for<br>licensing, registration, or certification of the covered employee or client.6.For purposes of determination of a tax credit or other economic incentive based on<br>employment, a covered employee is deemed an employee solely of the client. A<br>client is entitled to the benefit of any tax credit, economic incentive, or other benefit<br>arising as the result of the employment of a covered employee of the client. If the<br>grant or amount of the incentive is based on the number of employees, each client<br>must be treated as employing only those covered employees coemployed by the<br>client. A covered employee working for another client of the professional employer<br>organization may not be counted. Each professional employer organization shall<br>provide, upon request by a client or an agency or department of the state,<br>employment information reasonably required for administration of the tax credit or<br>economic incentive and which is necessary to support any request, claim,<br>application, or other action by a client seeking the tax credit or economic incentive.7.With respect to a bid, contract, purchase order, or agreement entered with the state<br>or a political subdivision, a client company's status or certification by any agency of<br>this state as a small, minority-owned, disadvantaged, or woman-owned business<br>enterprise or as a historically underutilized business is not affected because thePage No. 2client company has entered an agreement with a professional employer organization<br>or uses the services of a professional employer organization.43-55-03. Licensing requirements.1.A person may not provide, advertise, or otherwise hold itself out as providing<br>professional employer services, unless the person is licensed under this chapter. A<br>person engaged in the business of providing professional employer services shall<br>obtain a license regardless of its use of the term or conducting business as a<br>"professional employer organization", "staff leasing company", "registered staff<br>leasing company", "employee leasing company", "administrative employer", or any<br>other name.2.Each applicant for licensure shall provide the secretary of state with the following<br>information:a.The name of the professional employer organization and any name under<br>which the professional employer organization intends to conduct business in<br>this state.b.The designation of organization of the applicant whether domestic or foreign; a<br>corporation, limited liability company, general partnership, limited partnership,<br>limited liability partnership, limited liability limited partnership, sole proprietor, or<br>any other person subject to a governing statute; and the jurisdiction of origin of<br>the organization.c.The address of the principal place of business of the professional employer<br>organization and the address of each office it maintains in this state.d.The professional employer organization's taxpayer or employer identification<br>number.e.The date of the end of the applicant's fiscal year.f.A list of jurisdictions in which the professional employer organization has<br>operated in the preceding five years, including any alternative names, names of<br>predecessors, and, if known, successor business entities.g.A statement of ownership, which must include the name and address of any<br>person that owns or controls twenty-five percent or more of the equity interests<br>of the professional employer organization.h.A statement of management, which must include the name and address of any<br>individual who serves as president, chief executive officer, or otherwise has the<br>authority to act as a senior executive officer of the professional employer<br>organization.i.A bond as provided under section 43-55-05.j.A copy of the employer's quarterly contribution and wage report to job service<br>North Dakota for the quarter ending immediately before the date submitted to<br>the secretary of state. A professional employer organization that has not filed<br>an employer's quarterly contribution and wage report with job service North<br>Dakota shall submit a bond in the amount as provided under section 43-55-05.3.A license issued under this section is valid for one year and may be renewed within<br>sixty days before the expiration of the license by submitting to the secretary of state:a.The information required in subsection 2;Page No. 3b.The license fee provided in section 43-55-04; andc.A bond as provided under section 43-55-05.4.A person applying for licensure or a renewal of licensure shall maintain continuously<br>its organization's applicable records current and in good standing as otherwise<br>required by law.5.The secretary of state shall maintain a list of professional employer organizations<br>licensed under this chapter.43-55-04. Fees.1.Upon filing of an application for a license, a professional employer organization shall<br>pay a fee of one thousand dollars.2.Upon filing of an application for renewal of a license, a professional employer<br>organization shall pay a fee of five hundred dollars.3.Any fees collected under this chapter must be deposited in the secretary of state's<br>operating fund.43-55-05. Bond.1.A professional employer organization shall maintain a bond with a minimum value of<br>the greater amount of one hundred thousand dollars or five percent of the total<br>wages reported on the employer's quarterly contribution and wage report to job<br>service North Dakota for the quarter ending immediately before the date submitted<br>to the secretary of state but not to exceed five hundred thousand dollars.2.A professional employer organization that has not filed an employer's quarterly<br>contribution and wage report with job service North Dakota shall submit a bond in<br>the amount of one hundred thousand dollars.3.The bond must be held by the secretary of state and secure payment by the<br>professional employer organization of any tax, wage, benefit, or other entitlement<br>due to or with respect to a covered employee if the professional employer<br>organization does not make the payment when due.4.Notice of cancellation or nonrenewal of the surety bond required by this section shall<br>be provided to the secretary of state at least forty-five days before cancellation or<br>nonrenewal.43-55-06. General requirements.1.Except as specifically provided in this chapter or in a professional employer<br>agreement, in each coemployment relationship:a.The client is entitled to exercise all rights and is obligated to perform all duties<br>and responsibilities otherwise applicable to an employer in an employment<br>relationship.b.The professional employer organization is entitled to exercise only those rights<br>and obligated to perform only those duties and responsibilities specifically<br>required by this chapter or set forth in the professional employer agreement.<br>The rights, duties, and obligations of the professional employer organization as<br>coemployer with respect to any covered employee are limited to those arising<br>under the professional employer agreement and this chapter during the term ofPage No. 4coemployment by the professional employer organization of the covered<br>employee.c.The client retains the exclusive right to direct and control any covered<br>employee as is necessary to conduct the client's business, to discharge any of<br>the client's fiduciary responsibilities, or to comply with any licensure<br>requirements applicable to the client or to a covered employee.2.Except as specifically provided in this chapter, a coemployment relationship between<br>the client and the professional employer organization, and between each<br>coemployer and each covered employee, must be governed by the professional<br>employer agreement. Each professional employer agreement must include:a.The allocation of rights, duties, and obligations.b.(1)A statement that provides that:(a)The professional employer organization shall pay wages to any<br>covered employee and shall withhold, collect, report, and remit<br>payroll-related and unemployment taxes on wages paid to the<br>covered employee by the professional employer organization;(b)The client shall accurately report all wages of a covered employee<br>to the professional employer organization; and(c)The professional employer organization shall make payments for<br>employee benefits for covered employees to the extent the<br>professional employer organization has assumed responsibility in<br>the professional employer agreement.(2)As used in this subdivision, the term "wages" means all remuneration for<br>services to the professional employer organization and the client,<br>regardless of source, including a commission or bonus and the cash<br>value of any remuneration in a medium other than cash. Any gratuity<br>customarily received by an individual in the course of the individual's<br>service from any source other than the client or the professional<br>employer organization must be treated as wages received from the<br>individual's coemployers.c.A statement providing that the professional employer organization has the right<br>to hire, discipline, and terminate a covered employee as may be necessary to<br>fulfill the professional employer organization's responsibilities under this chapter<br>and the professional employer agreement and that the client has the right to<br>hire, discipline, and terminate a covered employee.d.A statement addressing the responsibility to obtain workers' compensation<br>coverage.3.Under each professional employer agreement entered by a professional employer<br>organization, the professional employer organization shall provide written notice to<br>each covered employee affected by the agreement of the general nature of the<br>coemployment relationship.4.Except to the extent otherwise expressly provided by a professional employer<br>agreement:a.A client is solely responsible for the quality, adequacy, or safety of the goods or<br>services produced or sold in the client's business.Page No. 5b.A client is solely responsible for directing, supervising, training, and controlling<br>the work of a covered employee with respect to the business activities of the<br>client and solely responsible for any act, error, or omission of a covered<br>employee relating to those activities.c.A client is not liable for any act, error, or omission of a professional employer<br>organization or of any covered employee of the client and a professional<br>employer organization if the covered employee is acting under the express<br>direction and control of the professional employer organization.d.A professional employer organization is not liable for any act, error, or omission<br>of a client or of any covered employee of the client if the covered employee is<br>acting under the express direction and control of the client.e.This subsection does not limit any contractual liability or obligation specifically<br>provided in the written professional employer agreement.f.A covered employee is not, solely as the result of being a covered employee of<br>a professional employer organization, an employee of the professional<br>employer organization for purposes of general liability insurance, fidelity bond,<br>surety bond, employer's liability not covered by workers' compensation, or<br>liquor liability insurance carried by the professional employer organization<br>unless the covered employee is included by specific reference in the<br>professional employer agreement and applicable prearranged employment<br>contract, insurance contract, or bond.5.A professional employer organization is not engaged in the sale of insurance or in<br>acting as a third-party administrator by offering, marketing, selling, administering, or<br>providing professional employer services which include services and employee<br>benefit plans for a covered employee.6.Nothing in this chapter or in a professional employer agreement may be construed<br>to affect the provisions of section 52-04-24 or 65-01-08.43-55-07. Benefit plans.1.Both a client and a professional employer organization are deemed to be an<br>employer for purposes of sponsoring retirement and welfare benefit plans for a<br>covered employee.2.A fully insured welfare benefit plan offered to the covered employees of a<br>professional employer organization is considered a single employer welfare benefit<br>plan and may not be considered a multiple employer welfare arrangement.3.For purposes of chapter 26.1-36.3, a professional employer organization is<br>considered the employer of all of its covered employees, and all covered employees<br>of any client participating in a health benefit plan sponsored by a single professional<br>employer organization are considered employees of the professional employer<br>organization.4.If a professional employer organization offers to its covered employees any health<br>benefit plan that is not fully insured by an authorized insurer, the plan must:a.Utilize an authorized third-party administrator;b.Hold all plan assets, including participant contributions, in a trust account;c.Provide sound reserves for the plan as determined using generally accepted<br>actuarial standards; andPage No. 6d.Provide written notice to each covered employee participating in the benefit<br>plan that the plan is self-insured or is not fully insured.43-55-08. Disciplinary actions - Complaints - Adjudicative proceedings - Penalties -Appeals.1.The secretary of state may:a.Deny an application for a professional employer organization license;b.Suspend a professional employer organization license for a period of not more<br>than sixty months;c.Request the attorney general to bring an action in district court to recover<br>restitution or penalties imposed under this chapter; ord.Not renew or issue a new professional employer organization license until a<br>professional employer organization has paid any civil penalty or restitution<br>imposed under this chapter.2.Any person acting in the capacity of a professional employer organization without a<br>license is guilty of a class A misdemeanor. In addition to the license fee due if the<br>person subsequently applies for a license, the person may be assessed a civil<br>penalty by the secretary of state, following written notice to the person of an intent to<br>assess the penalty, in an amount not to exceed three times the amount of the<br>license fee.3.An individual may file a duly verified complaint with the secretary of state charging<br>that the professional employer organization is guilty of any of the following:a.The conviction of the professional employer organization or a controlling person<br>of the professional employer organization of a crime that relates to the<br>operation of the professional employer organization or which relates to fraud or<br>deceit or the ability of the professional employer organization or the controlling<br>person of the professional employer organization to operate the professional<br>employer organization;b.An individual knowingly making a material misrepresentation or providing false<br>or fraudulent information to the secretary of state or other governmental<br>agency; orc.A willful violation of this chapter.4.A complaint must be on a form approved by the secretary of state and must set forth<br>sufficient facts upon which a reasonable individual could conclude that any of the<br>acts or omissions in subsection 3 has been committed.5.The secretary of state shall review a complaint filed under this section.If thesecretary of state determines a complaint provides sufficient facts upon which a<br>reasonable individual could conclude that one or more of the acts or omissions set<br>forth in subsection 3 has been committed, the secretary of state may initiate an<br>adjudicative proceeding under chapter 28-32. If, after an adjudicative proceeding or<br>as part of an informal disposition under chapter 28-32, the secretary of state<br>determines that the professional employer organization is guilty of an act or<br>omission charged or if the licensee admits guilt to an act or omission charged, the<br>secretary of state may:a.Suspend or revoke the professional employer organization license;Page No. 7b.Order an administrative penalty of not more than one thousand dollars for each<br>material violation;c.Order restitution in an amount not exceeding five thousand dollars;d.Issue a cease and desist order; ore.Impose a lesser sanction or remedy.6.Any act or omission under subsection 3 may also constitute grounds for the attorney<br>general to bring an action under chapter 51-15 and may subject the professional<br>employer organization to all provisions, procedures, remedies, and penalties<br>provided for in chapter 51-15.7.A professional employer organization aggrieved by a decision of the secretary of<br>state in denying, revoking, or suspending the professional employer organization<br>license or ordering restitution or penalties may appeal the decision to the district<br>court of Burleigh County.8.A professional employer organization may not obtain a license under any name after<br>the denial of an application for a license or during the period of a revocation or<br>suspension.For the purposes of this subsection, a professional employerorganization that has had an application for a license denied or which has had a<br>license revoked or suspended includes any officer, director, agent, member, or<br>employee of the professional employer organization.9.Upon request of the secretary of state or attorney general, a professional employer<br>organization promptly shall provide an audited financial statement verified by a<br>certified public accountant licensed to practice in the jurisdiction in which the<br>accountant is located.43-55-09. Confidential records.1.The social security number or federal tax identification number disclosed or<br>contained in an application filed with the secretary of state under this chapter is<br>confidential.The secretary of state shall delete or obscure any social securitynumber or federal tax identification number before a copy of an application is<br>released to the public.2.All audited financial reports and the employers' quarterly contribution and wage<br>report to job service North Dakota are confidential except to the extent necessary for<br>the proper administration of this chapter by the secretary of state or the attorney<br>general.43-55-10. Interagency cooperation. A state agency, in performing duties under otherlaws that affect the regulation of professional employer organizations, shall cooperate with the<br>secretary of state as necessary to administer and enforce this chapter.Page No. 8Document Outlinechapter 43-55 professional employer organizations
CHAPTER 43-55PROFESSIONAL EMPLOYER ORGANIZATIONS43-55-01. Definitions. As used in this chapter:1."Administrative fee" means the fee charged to a client by a professional employer<br>organization for professional employer services.The term does not include anyamount of a fee which is for wages and salaries, benefits, workers' compensation<br>coverage, payroll taxes, withholding, or other assessment paid by the professional<br>employer organization to or on behalf of a covered employee under a professional<br>employer agreement.2."Client" means any person that enters a professional employer agreement with a<br>professional employer organization.3."Coemployer" means either a professional employer organization or a client.4."Coemployment relationship" means a relationship that is intended to be an ongoing<br>relationship rather than a temporary or project-specific relationship, wherein the<br>rights, duties, and obligations of an employer which arise out of an employment<br>relationship have been allocated between coemployers under a professional<br>employer agreement and this chapter.5."Covered employee" means an individual having a coemployment relationship with a<br>professional employer organization and a client, who has received written notice of<br>coemploymentwiththeprofessionalemployerorganization,andwhosecoemployment relationship is under a professional employer agreement subject to<br>this chapter.An individual who is an officer, director, shareholder, partner, ormanager of the client is a "covered employee" to the extent the professional<br>employer organization and the client have expressly agreed in the professional<br>employer agreement that the individual is a covered employee and if the individual<br>meets the criteria of this subsection and acts as an operational manager or performs<br>day-to-day operational services for the client.6."Licensee" means a professional employer organization licensed under this chapter.7."Professional employer agreement" means a written contract between a client and a<br>professional employer organization which provides for the coemployment of a<br>covered employee, for the allocation of employer rights and obligations between the<br>client and the professional employer organization with respect to a covered<br>employee, and the assumption of the responsibilities required by this chapter.8."Professional employer organization" means a person engaged in the business of<br>providing professional employer services.The term does not include anarrangement through which a person that does not have as its principal business<br>activity the practice of entering a professional employer arrangement and does not<br>hold itself out as a professional employer organization and that shares an employee<br>with a commonly owned company within the meaning of section 414(b) and (c) of<br>the Internal Revenue Code of 1986; an independent contractor arrangement through<br>which a person assumes responsibility for a product produced or a service<br>performed by the person or the person's agents and retains and exercises primary<br>direction and control over the work performed by an individual whose services are<br>supplied under the arrangement; or the provision of temporary help services.9."Professional employer services"means the entering of a coemploymentrelationship under this chapter.Page No. 110."Temporary help services" means services consisting of a person recruiting and<br>hiring its own employees; finding another organization that needs the services of<br>those employees; assigning those employees to perform work at or services for the<br>other organization to support or supplement the other organization's workforce, to<br>provide assistance in special work situations, such as an employee absence, skill<br>shortage, or seasonal workload or to perform a special assignment or project; and<br>customarily attempting to reassign the employees to another organization when the<br>employers finish each assignment.43-55-02. Rights, duties, and obligations unaffected.1.Neither this chapter nor a professional employer agreement may affect, modify, or<br>amend a collective bargaining agreement or any right or obligation of a client,<br>professional employer organization, or covered employee under federal law.2.Neither this chapter nor a professional employer agreement may:a.Diminish, abolish, or remove any right of a covered employee to a client or<br>obligation of the client to a covered employee existing before the effective date<br>of the professional employer agreement.b.Affect, modify, or amend any contractual relationship or restrictive covenant<br>between a covered employee and a client in effect at the time a professional<br>employer agreement becomes effective or prohibit or amend a contractual<br>relationship or restrictive covenant that is entered subsequently between a<br>client and a covered employee.3.A covered employee who is required under law to be licensed, registered, or certified<br>is deemed solely an employee of the client for purposes of the license, registration,<br>or certification requirement.4.Unless otherwise provided by this chapter, a professional employer organization is<br>not deemed to engage in any occupation, trade, profession, or other activity that is<br>subject to licensing, registration, or certification requirements or is otherwise<br>regulated solely by entering and maintaining a coemployment relationship with a<br>covered employee who is subject to the requirement.5.A client has the sole right of direction and control of the professional or licensed<br>activities of a covered employee and of the client's business.The coveredemployee and client remain subject to regulation by the entity responsible for<br>licensing, registration, or certification of the covered employee or client.6.For purposes of determination of a tax credit or other economic incentive based on<br>employment, a covered employee is deemed an employee solely of the client. A<br>client is entitled to the benefit of any tax credit, economic incentive, or other benefit<br>arising as the result of the employment of a covered employee of the client. If the<br>grant or amount of the incentive is based on the number of employees, each client<br>must be treated as employing only those covered employees coemployed by the<br>client. A covered employee working for another client of the professional employer<br>organization may not be counted. Each professional employer organization shall<br>provide, upon request by a client or an agency or department of the state,<br>employment information reasonably required for administration of the tax credit or<br>economic incentive and which is necessary to support any request, claim,<br>application, or other action by a client seeking the tax credit or economic incentive.7.With respect to a bid, contract, purchase order, or agreement entered with the state<br>or a political subdivision, a client company's status or certification by any agency of<br>this state as a small, minority-owned, disadvantaged, or woman-owned business<br>enterprise or as a historically underutilized business is not affected because thePage No. 2client company has entered an agreement with a professional employer organization<br>or uses the services of a professional employer organization.43-55-03. Licensing requirements.1.A person may not provide, advertise, or otherwise hold itself out as providing<br>professional employer services, unless the person is licensed under this chapter. A<br>person engaged in the business of providing professional employer services shall<br>obtain a license regardless of its use of the term or conducting business as a<br>"professional employer organization", "staff leasing company", "registered staff<br>leasing company", "employee leasing company", "administrative employer", or any<br>other name.2.Each applicant for licensure shall provide the secretary of state with the following<br>information:a.The name of the professional employer organization and any name under<br>which the professional employer organization intends to conduct business in<br>this state.b.The designation of organization of the applicant whether domestic or foreign; a<br>corporation, limited liability company, general partnership, limited partnership,<br>limited liability partnership, limited liability limited partnership, sole proprietor, or<br>any other person subject to a governing statute; and the jurisdiction of origin of<br>the organization.c.The address of the principal place of business of the professional employer<br>organization and the address of each office it maintains in this state.d.The professional employer organization's taxpayer or employer identification<br>number.e.The date of the end of the applicant's fiscal year.f.A list of jurisdictions in which the professional employer organization has<br>operated in the preceding five years, including any alternative names, names of<br>predecessors, and, if known, successor business entities.g.A statement of ownership, which must include the name and address of any<br>person that owns or controls twenty-five percent or more of the equity interests<br>of the professional employer organization.h.A statement of management, which must include the name and address of any<br>individual who serves as president, chief executive officer, or otherwise has the<br>authority to act as a senior executive officer of the professional employer<br>organization.i.A bond as provided under section 43-55-05.j.A copy of the employer's quarterly contribution and wage report to job service<br>North Dakota for the quarter ending immediately before the date submitted to<br>the secretary of state. A professional employer organization that has not filed<br>an employer's quarterly contribution and wage report with job service North<br>Dakota shall submit a bond in the amount as provided under section 43-55-05.3.A license issued under this section is valid for one year and may be renewed within<br>sixty days before the expiration of the license by submitting to the secretary of state:a.The information required in subsection 2;Page No. 3b.The license fee provided in section 43-55-04; andc.A bond as provided under section 43-55-05.4.A person applying for licensure or a renewal of licensure shall maintain continuously<br>its organization's applicable records current and in good standing as otherwise<br>required by law.5.The secretary of state shall maintain a list of professional employer organizations<br>licensed under this chapter.43-55-04. Fees.1.Upon filing of an application for a license, a professional employer organization shall<br>pay a fee of one thousand dollars.2.Upon filing of an application for renewal of a license, a professional employer<br>organization shall pay a fee of five hundred dollars.3.Any fees collected under this chapter must be deposited in the secretary of state's<br>operating fund.43-55-05. Bond.1.A professional employer organization shall maintain a bond with a minimum value of<br>the greater amount of one hundred thousand dollars or five percent of the total<br>wages reported on the employer's quarterly contribution and wage report to job<br>service North Dakota for the quarter ending immediately before the date submitted<br>to the secretary of state but not to exceed five hundred thousand dollars.2.A professional employer organization that has not filed an employer's quarterly<br>contribution and wage report with job service North Dakota shall submit a bond in<br>the amount of one hundred thousand dollars.3.The bond must be held by the secretary of state and secure payment by the<br>professional employer organization of any tax, wage, benefit, or other entitlement<br>due to or with respect to a covered employee if the professional employer<br>organization does not make the payment when due.4.Notice of cancellation or nonrenewal of the surety bond required by this section shall<br>be provided to the secretary of state at least forty-five days before cancellation or<br>nonrenewal.43-55-06. General requirements.1.Except as specifically provided in this chapter or in a professional employer<br>agreement, in each coemployment relationship:a.The client is entitled to exercise all rights and is obligated to perform all duties<br>and responsibilities otherwise applicable to an employer in an employment<br>relationship.b.The professional employer organization is entitled to exercise only those rights<br>and obligated to perform only those duties and responsibilities specifically<br>required by this chapter or set forth in the professional employer agreement.<br>The rights, duties, and obligations of the professional employer organization as<br>coemployer with respect to any covered employee are limited to those arising<br>under the professional employer agreement and this chapter during the term ofPage No. 4coemployment by the professional employer organization of the covered<br>employee.c.The client retains the exclusive right to direct and control any covered<br>employee as is necessary to conduct the client's business, to discharge any of<br>the client's fiduciary responsibilities, or to comply with any licensure<br>requirements applicable to the client or to a covered employee.2.Except as specifically provided in this chapter, a coemployment relationship between<br>the client and the professional employer organization, and between each<br>coemployer and each covered employee, must be governed by the professional<br>employer agreement. Each professional employer agreement must include:a.The allocation of rights, duties, and obligations.b.(1)A statement that provides that:(a)The professional employer organization shall pay wages to any<br>covered employee and shall withhold, collect, report, and remit<br>payroll-related and unemployment taxes on wages paid to the<br>covered employee by the professional employer organization;(b)The client shall accurately report all wages of a covered employee<br>to the professional employer organization; and(c)The professional employer organization shall make payments for<br>employee benefits for covered employees to the extent the<br>professional employer organization has assumed responsibility in<br>the professional employer agreement.(2)As used in this subdivision, the term "wages" means all remuneration for<br>services to the professional employer organization and the client,<br>regardless of source, including a commission or bonus and the cash<br>value of any remuneration in a medium other than cash. Any gratuity<br>customarily received by an individual in the course of the individual's<br>service from any source other than the client or the professional<br>employer organization must be treated as wages received from the<br>individual's coemployers.c.A statement providing that the professional employer organization has the right<br>to hire, discipline, and terminate a covered employee as may be necessary to<br>fulfill the professional employer organization's responsibilities under this chapter<br>and the professional employer agreement and that the client has the right to<br>hire, discipline, and terminate a covered employee.d.A statement addressing the responsibility to obtain workers' compensation<br>coverage.3.Under each professional employer agreement entered by a professional employer<br>organization, the professional employer organization shall provide written notice to<br>each covered employee affected by the agreement of the general nature of the<br>coemployment relationship.4.Except to the extent otherwise expressly provided by a professional employer<br>agreement:a.A client is solely responsible for the quality, adequacy, or safety of the goods or<br>services produced or sold in the client's business.Page No. 5b.A client is solely responsible for directing, supervising, training, and controlling<br>the work of a covered employee with respect to the business activities of the<br>client and solely responsible for any act, error, or omission of a covered<br>employee relating to those activities.c.A client is not liable for any act, error, or omission of a professional employer<br>organization or of any covered employee of the client and a professional<br>employer organization if the covered employee is acting under the express<br>direction and control of the professional employer organization.d.A professional employer organization is not liable for any act, error, or omission<br>of a client or of any covered employee of the client if the covered employee is<br>acting under the express direction and control of the client.e.This subsection does not limit any contractual liability or obligation specifically<br>provided in the written professional employer agreement.f.A covered employee is not, solely as the result of being a covered employee of<br>a professional employer organization, an employee of the professional<br>employer organization for purposes of general liability insurance, fidelity bond,<br>surety bond, employer's liability not covered by workers' compensation, or<br>liquor liability insurance carried by the professional employer organization<br>unless the covered employee is included by specific reference in the<br>professional employer agreement and applicable prearranged employment<br>contract, insurance contract, or bond.5.A professional employer organization is not engaged in the sale of insurance or in<br>acting as a third-party administrator by offering, marketing, selling, administering, or<br>providing professional employer services which include services and employee<br>benefit plans for a covered employee.6.Nothing in this chapter or in a professional employer agreement may be construed<br>to affect the provisions of section 52-04-24 or 65-01-08.43-55-07. Benefit plans.1.Both a client and a professional employer organization are deemed to be an<br>employer for purposes of sponsoring retirement and welfare benefit plans for a<br>covered employee.2.A fully insured welfare benefit plan offered to the covered employees of a<br>professional employer organization is considered a single employer welfare benefit<br>plan and may not be considered a multiple employer welfare arrangement.3.For purposes of chapter 26.1-36.3, a professional employer organization is<br>considered the employer of all of its covered employees, and all covered employees<br>of any client participating in a health benefit plan sponsored by a single professional<br>employer organization are considered employees of the professional employer<br>organization.4.If a professional employer organization offers to its covered employees any health<br>benefit plan that is not fully insured by an authorized insurer, the plan must:a.Utilize an authorized third-party administrator;b.Hold all plan assets, including participant contributions, in a trust account;c.Provide sound reserves for the plan as determined using generally accepted<br>actuarial standards; andPage No. 6d.Provide written notice to each covered employee participating in the benefit<br>plan that the plan is self-insured or is not fully insured.43-55-08. Disciplinary actions - Complaints - Adjudicative proceedings - Penalties -Appeals.1.The secretary of state may:a.Deny an application for a professional employer organization license;b.Suspend a professional employer organization license for a period of not more<br>than sixty months;c.Request the attorney general to bring an action in district court to recover<br>restitution or penalties imposed under this chapter; ord.Not renew or issue a new professional employer organization license until a<br>professional employer organization has paid any civil penalty or restitution<br>imposed under this chapter.2.Any person acting in the capacity of a professional employer organization without a<br>license is guilty of a class A misdemeanor. In addition to the license fee due if the<br>person subsequently applies for a license, the person may be assessed a civil<br>penalty by the secretary of state, following written notice to the person of an intent to<br>assess the penalty, in an amount not to exceed three times the amount of the<br>license fee.3.An individual may file a duly verified complaint with the secretary of state charging<br>that the professional employer organization is guilty of any of the following:a.The conviction of the professional employer organization or a controlling person<br>of the professional employer organization of a crime that relates to the<br>operation of the professional employer organization or which relates to fraud or<br>deceit or the ability of the professional employer organization or the controlling<br>person of the professional employer organization to operate the professional<br>employer organization;b.An individual knowingly making a material misrepresentation or providing false<br>or fraudulent information to the secretary of state or other governmental<br>agency; orc.A willful violation of this chapter.4.A complaint must be on a form approved by the secretary of state and must set forth<br>sufficient facts upon which a reasonable individual could conclude that any of the<br>acts or omissions in subsection 3 has been committed.5.The secretary of state shall review a complaint filed under this section.If thesecretary of state determines a complaint provides sufficient facts upon which a<br>reasonable individual could conclude that one or more of the acts or omissions set<br>forth in subsection 3 has been committed, the secretary of state may initiate an<br>adjudicative proceeding under chapter 28-32. If, after an adjudicative proceeding or<br>as part of an informal disposition under chapter 28-32, the secretary of state<br>determines that the professional employer organization is guilty of an act or<br>omission charged or if the licensee admits guilt to an act or omission charged, the<br>secretary of state may:a.Suspend or revoke the professional employer organization license;Page No. 7b.Order an administrative penalty of not more than one thousand dollars for each<br>material violation;c.Order restitution in an amount not exceeding five thousand dollars;d.Issue a cease and desist order; ore.Impose a lesser sanction or remedy.6.Any act or omission under subsection 3 may also constitute grounds for the attorney<br>general to bring an action under chapter 51-15 and may subject the professional<br>employer organization to all provisions, procedures, remedies, and penalties<br>provided for in chapter 51-15.7.A professional employer organization aggrieved by a decision of the secretary of<br>state in denying, revoking, or suspending the professional employer organization<br>license or ordering restitution or penalties may appeal the decision to the district<br>court of Burleigh County.8.A professional employer organization may not obtain a license under any name after<br>the denial of an application for a license or during the period of a revocation or<br>suspension.For the purposes of this subsection, a professional employerorganization that has had an application for a license denied or which has had a<br>license revoked or suspended includes any officer, director, agent, member, or<br>employee of the professional employer organization.9.Upon request of the secretary of state or attorney general, a professional employer<br>organization promptly shall provide an audited financial statement verified by a<br>certified public accountant licensed to practice in the jurisdiction in which the<br>accountant is located.43-55-09. Confidential records.1.The social security number or federal tax identification number disclosed or<br>contained in an application filed with the secretary of state under this chapter is<br>confidential.The secretary of state shall delete or obscure any social securitynumber or federal tax identification number before a copy of an application is<br>released to the public.2.All audited financial reports and the employers' quarterly contribution and wage<br>report to job service North Dakota are confidential except to the extent necessary for<br>the proper administration of this chapter by the secretary of state or the attorney<br>general.43-55-10. Interagency cooperation. A state agency, in performing duties under otherlaws that affect the regulation of professional employer organizations, shall cooperate with the<br>secretary of state as necessary to administer and enforce this chapter.Page No. 8Document Outlinechapter 43-55 professional employer organizations
CHAPTER 43-55PROFESSIONAL EMPLOYER ORGANIZATIONS43-55-01. Definitions. As used in this chapter:1."Administrative fee" means the fee charged to a client by a professional employer<br>organization for professional employer services.The term does not include anyamount of a fee which is for wages and salaries, benefits, workers' compensation<br>coverage, payroll taxes, withholding, or other assessment paid by the professional<br>employer organization to or on behalf of a covered employee under a professional<br>employer agreement.2."Client" means any person that enters a professional employer agreement with a<br>professional employer organization.3."Coemployer" means either a professional employer organization or a client.4."Coemployment relationship" means a relationship that is intended to be an ongoing<br>relationship rather than a temporary or project-specific relationship, wherein the<br>rights, duties, and obligations of an employer which arise out of an employment<br>relationship have been allocated between coemployers under a professional<br>employer agreement and this chapter.5."Covered employee" means an individual having a coemployment relationship with a<br>professional employer organization and a client, who has received written notice of<br>coemploymentwiththeprofessionalemployerorganization,andwhosecoemployment relationship is under a professional employer agreement subject to<br>this chapter.An individual who is an officer, director, shareholder, partner, ormanager of the client is a "covered employee" to the extent the professional<br>employer organization and the client have expressly agreed in the professional<br>employer agreement that the individual is a covered employee and if the individual<br>meets the criteria of this subsection and acts as an operational manager or performs<br>day-to-day operational services for the client.6."Licensee" means a professional employer organization licensed under this chapter.7."Professional employer agreement" means a written contract between a client and a<br>professional employer organization which provides for the coemployment of a<br>covered employee, for the allocation of employer rights and obligations between the<br>client and the professional employer organization with respect to a covered<br>employee, and the assumption of the responsibilities required by this chapter.8."Professional employer organization" means a person engaged in the business of<br>providing professional employer services.The term does not include anarrangement through which a person that does not have as its principal business<br>activity the practice of entering a professional employer arrangement and does not<br>hold itself out as a professional employer organization and that shares an employee<br>with a commonly owned company within the meaning of section 414(b) and (c) of<br>the Internal Revenue Code of 1986; an independent contractor arrangement through<br>which a person assumes responsibility for a product produced or a service<br>performed by the person or the person's agents and retains and exercises primary<br>direction and control over the work performed by an individual whose services are<br>supplied under the arrangement; or the provision of temporary help services.9."Professional employer services"means the entering of a coemploymentrelationship under this chapter.Page No. 110."Temporary help services" means services consisting of a person recruiting and<br>hiring its own employees; finding another organization that needs the services of<br>those employees; assigning those employees to perform work at or services for the<br>other organization to support or supplement the other organization's workforce, to<br>provide assistance in special work situations, such as an employee absence, skill<br>shortage, or seasonal workload or to perform a special assignment or project; and<br>customarily attempting to reassign the employees to another organization when the<br>employers finish each assignment.43-55-02. Rights, duties, and obligations unaffected.1.Neither this chapter nor a professional employer agreement may affect, modify, or<br>amend a collective bargaining agreement or any right or obligation of a client,<br>professional employer organization, or covered employee under federal law.2.Neither this chapter nor a professional employer agreement may:a.Diminish, abolish, or remove any right of a covered employee to a client or<br>obligation of the client to a covered employee existing before the effective date<br>of the professional employer agreement.b.Affect, modify, or amend any contractual relationship or restrictive covenant<br>between a covered employee and a client in effect at the time a professional<br>employer agreement becomes effective or prohibit or amend a contractual<br>relationship or restrictive covenant that is entered subsequently between a<br>client and a covered employee.3.A covered employee who is required under law to be licensed, registered, or certified<br>is deemed solely an employee of the client for purposes of the license, registration,<br>or certification requirement.4.Unless otherwise provided by this chapter, a professional employer organization is<br>not deemed to engage in any occupation, trade, profession, or other activity that is<br>subject to licensing, registration, or certification requirements or is otherwise<br>regulated solely by entering and maintaining a coemployment relationship with a<br>covered employee who is subject to the requirement.5.A client has the sole right of direction and control of the professional or licensed<br>activities of a covered employee and of the client's business.The coveredemployee and client remain subject to regulation by the entity responsible for<br>licensing, registration, or certification of the covered employee or client.6.For purposes of determination of a tax credit or other economic incentive based on<br>employment, a covered employee is deemed an employee solely of the client. A<br>client is entitled to the benefit of any tax credit, economic incentive, or other benefit<br>arising as the result of the employment of a covered employee of the client. If the<br>grant or amount of the incentive is based on the number of employees, each client<br>must be treated as employing only those covered employees coemployed by the<br>client. A covered employee working for another client of the professional employer<br>organization may not be counted. Each professional employer organization shall<br>provide, upon request by a client or an agency or department of the state,<br>employment information reasonably required for administration of the tax credit or<br>economic incentive and which is necessary to support any request, claim,<br>application, or other action by a client seeking the tax credit or economic incentive.7.With respect to a bid, contract, purchase order, or agreement entered with the state<br>or a political subdivision, a client company's status or certification by any agency of<br>this state as a small, minority-owned, disadvantaged, or woman-owned business<br>enterprise or as a historically underutilized business is not affected because thePage No. 2client company has entered an agreement with a professional employer organization<br>or uses the services of a professional employer organization.43-55-03. Licensing requirements.1.A person may not provide, advertise, or otherwise hold itself out as providing<br>professional employer services, unless the person is licensed under this chapter. A<br>person engaged in the business of providing professional employer services shall<br>obtain a license regardless of its use of the term or conducting business as a<br>"professional employer organization", "staff leasing company", "registered staff<br>leasing company", "employee leasing company", "administrative employer", or any<br>other name.2.Each applicant for licensure shall provide the secretary of state with the following<br>information:a.The name of the professional employer organization and any name under<br>which the professional employer organization intends to conduct business in<br>this state.b.The designation of organization of the applicant whether domestic or foreign; a<br>corporation, limited liability company, general partnership, limited partnership,<br>limited liability partnership, limited liability limited partnership, sole proprietor, or<br>any other person subject to a governing statute; and the jurisdiction of origin of<br>the organization.c.The address of the principal place of business of the professional employer<br>organization and the address of each office it maintains in this state.d.The professional employer organization's taxpayer or employer identification<br>number.e.The date of the end of the applicant's fiscal year.f.A list of jurisdictions in which the professional employer organization has<br>operated in the preceding five years, including any alternative names, names of<br>predecessors, and, if known, successor business entities.g.A statement of ownership, which must include the name and address of any<br>person that owns or controls twenty-five percent or more of the equity interests<br>of the professional employer organization.h.A statement of management, which must include the name and address of any<br>individual who serves as president, chief executive officer, or otherwise has the<br>authority to act as a senior executive officer of the professional employer<br>organization.i.A bond as provided under section 43-55-05.j.A copy of the employer's quarterly contribution and wage report to job service<br>North Dakota for the quarter ending immediately before the date submitted to<br>the secretary of state. A professional employer organization that has not filed<br>an employer's quarterly contribution and wage report with job service North<br>Dakota shall submit a bond in the amount as provided under section 43-55-05.3.A license issued under this section is valid for one year and may be renewed within<br>sixty days before the expiration of the license by submitting to the secretary of state:a.The information required in subsection 2;Page No. 3b.The license fee provided in section 43-55-04; andc.A bond as provided under section 43-55-05.4.A person applying for licensure or a renewal of licensure shall maintain continuously<br>its organization's applicable records current and in good standing as otherwise<br>required by law.5.The secretary of state shall maintain a list of professional employer organizations<br>licensed under this chapter.43-55-04. Fees.1.Upon filing of an application for a license, a professional employer organization shall<br>pay a fee of one thousand dollars.2.Upon filing of an application for renewal of a license, a professional employer<br>organization shall pay a fee of five hundred dollars.3.Any fees collected under this chapter must be deposited in the secretary of state's<br>operating fund.43-55-05. Bond.1.A professional employer organization shall maintain a bond with a minimum value of<br>the greater amount of one hundred thousand dollars or five percent of the total<br>wages reported on the employer's quarterly contribution and wage report to job<br>service North Dakota for the quarter ending immediately before the date submitted<br>to the secretary of state but not to exceed five hundred thousand dollars.2.A professional employer organization that has not filed an employer's quarterly<br>contribution and wage report with job service North Dakota shall submit a bond in<br>the amount of one hundred thousand dollars.3.The bond must be held by the secretary of state and secure payment by the<br>professional employer organization of any tax, wage, benefit, or other entitlement<br>due to or with respect to a covered employee if the professional employer<br>organization does not make the payment when due.4.Notice of cancellation or nonrenewal of the surety bond required by this section shall<br>be provided to the secretary of state at least forty-five days before cancellation or<br>nonrenewal.43-55-06. General requirements.1.Except as specifically provided in this chapter or in a professional employer<br>agreement, in each coemployment relationship:a.The client is entitled to exercise all rights and is obligated to perform all duties<br>and responsibilities otherwise applicable to an employer in an employment<br>relationship.b.The professional employer organization is entitled to exercise only those rights<br>and obligated to perform only those duties and responsibilities specifically<br>required by this chapter or set forth in the professional employer agreement.<br>The rights, duties, and obligations of the professional employer organization as<br>coemployer with respect to any covered employee are limited to those arising<br>under the professional employer agreement and this chapter during the term ofPage No. 4coemployment by the professional employer organization of the covered<br>employee.c.The client retains the exclusive right to direct and control any covered<br>employee as is necessary to conduct the client's business, to discharge any of<br>the client's fiduciary responsibilities, or to comply with any licensure<br>requirements applicable to the client or to a covered employee.2.Except as specifically provided in this chapter, a coemployment relationship between<br>the client and the professional employer organization, and between each<br>coemployer and each covered employee, must be governed by the professional<br>employer agreement. Each professional employer agreement must include:a.The allocation of rights, duties, and obligations.b.(1)A statement that provides that:(a)The professional employer organization shall pay wages to any<br>covered employee and shall withhold, collect, report, and remit<br>payroll-related and unemployment taxes on wages paid to the<br>covered employee by the professional employer organization;(b)The client shall accurately report all wages of a covered employee<br>to the professional employer organization; and(c)The professional employer organization shall make payments for<br>employee benefits for covered employees to the extent the<br>professional employer organization has assumed responsibility in<br>the professional employer agreement.(2)As used in this subdivision, the term "wages" means all remuneration for<br>services to the professional employer organization and the client,<br>regardless of source, including a commission or bonus and the cash<br>value of any remuneration in a medium other than cash. Any gratuity<br>customarily received by an individual in the course of the individual's<br>service from any source other than the client or the professional<br>employer organization must be treated as wages received from the<br>individual's coemployers.c.A statement providing that the professional employer organization has the right<br>to hire, discipline, and terminate a covered employee as may be necessary to<br>fulfill the professional employer organization's responsibilities under this chapter<br>and the professional employer agreement and that the client has the right to<br>hire, discipline, and terminate a covered employee.d.A statement addressing the responsibility to obtain workers' compensation<br>coverage.3.Under each professional employer agreement entered by a professional employer<br>organization, the professional employer organization shall provide written notice to<br>each covered employee affected by the agreement of the general nature of the<br>coemployment relationship.4.Except to the extent otherwise expressly provided by a professional employer<br>agreement:a.A client is solely responsible for the quality, adequacy, or safety of the goods or<br>services produced or sold in the client's business.Page No. 5b.A client is solely responsible for directing, supervising, training, and controlling<br>the work of a covered employee with respect to the business activities of the<br>client and solely responsible for any act, error, or omission of a covered<br>employee relating to those activities.c.A client is not liable for any act, error, or omission of a professional employer<br>organization or of any covered employee of the client and a professional<br>employer organization if the covered employee is acting under the express<br>direction and control of the professional employer organization.d.A professional employer organization is not liable for any act, error, or omission<br>of a client or of any covered employee of the client if the covered employee is<br>acting under the express direction and control of the client.e.This subsection does not limit any contractual liability or obligation specifically<br>provided in the written professional employer agreement.f.A covered employee is not, solely as the result of being a covered employee of<br>a professional employer organization, an employee of the professional<br>employer organization for purposes of general liability insurance, fidelity bond,<br>surety bond, employer's liability not covered by workers' compensation, or<br>liquor liability insurance carried by the professional employer organization<br>unless the covered employee is included by specific reference in the<br>professional employer agreement and applicable prearranged employment<br>contract, insurance contract, or bond.5.A professional employer organization is not engaged in the sale of insurance or in<br>acting as a third-party administrator by offering, marketing, selling, administering, or<br>providing professional employer services which include services and employee<br>benefit plans for a covered employee.6.Nothing in this chapter or in a professional employer agreement may be construed<br>to affect the provisions of section 52-04-24 or 65-01-08.43-55-07. Benefit plans.1.Both a client and a professional employer organization are deemed to be an<br>employer for purposes of sponsoring retirement and welfare benefit plans for a<br>covered employee.2.A fully insured welfare benefit plan offered to the covered employees of a<br>professional employer organization is considered a single employer welfare benefit<br>plan and may not be considered a multiple employer welfare arrangement.3.For purposes of chapter 26.1-36.3, a professional employer organization is<br>considered the employer of all of its covered employees, and all covered employees<br>of any client participating in a health benefit plan sponsored by a single professional<br>employer organization are considered employees of the professional employer<br>organization.4.If a professional employer organization offers to its covered employees any health<br>benefit plan that is not fully insured by an authorized insurer, the plan must:a.Utilize an authorized third-party administrator;b.Hold all plan assets, including participant contributions, in a trust account;c.Provide sound reserves for the plan as determined using generally accepted<br>actuarial standards; andPage No. 6d.Provide written notice to each covered employee participating in the benefit<br>plan that the plan is self-insured or is not fully insured.43-55-08. Disciplinary actions - Complaints - Adjudicative proceedings - Penalties -Appeals.1.The secretary of state may:a.Deny an application for a professional employer organization license;b.Suspend a professional employer organization license for a period of not more<br>than sixty months;c.Request the attorney general to bring an action in district court to recover<br>restitution or penalties imposed under this chapter; ord.Not renew or issue a new professional employer organization license until a<br>professional employer organization has paid any civil penalty or restitution<br>imposed under this chapter.2.Any person acting in the capacity of a professional employer organization without a<br>license is guilty of a class A misdemeanor. In addition to the license fee due if the<br>person subsequently applies for a license, the person may be assessed a civil<br>penalty by the secretary of state, following written notice to the person of an intent to<br>assess the penalty, in an amount not to exceed three times the amount of the<br>license fee.3.An individual may file a duly verified complaint with the secretary of state charging<br>that the professional employer organization is guilty of any of the following:a.The conviction of the professional employer organization or a controlling person<br>of the professional employer organization of a crime that relates to the<br>operation of the professional employer organization or which relates to fraud or<br>deceit or the ability of the professional employer organization or the controlling<br>person of the professional employer organization to operate the professional<br>employer organization;b.An individual knowingly making a material misrepresentation or providing false<br>or fraudulent information to the secretary of state or other governmental<br>agency; orc.A willful violation of this chapter.4.A complaint must be on a form approved by the secretary of state and must set forth<br>sufficient facts upon which a reasonable individual could conclude that any of the<br>acts or omissions in subsection 3 has been committed.5.The secretary of state shall review a complaint filed under this section.If thesecretary of state determines a complaint provides sufficient facts upon which a<br>reasonable individual could conclude that one or more of the acts or omissions set<br>forth in subsection 3 has been committed, the secretary of state may initiate an<br>adjudicative proceeding under chapter 28-32. If, after an adjudicative proceeding or<br>as part of an informal disposition under chapter 28-32, the secretary of state<br>determines that the professional employer organization is guilty of an act or<br>omission charged or if the licensee admits guilt to an act or omission charged, the<br>secretary of state may:a.Suspend or revoke the professional employer organization license;Page No. 7b.Order an administrative penalty of not more than one thousand dollars for each<br>material violation;c.Order restitution in an amount not exceeding five thousand dollars;d.Issue a cease and desist order; ore.Impose a lesser sanction or remedy.6.Any act or omission under subsection 3 may also constitute grounds for the attorney<br>general to bring an action under chapter 51-15 and may subject the professional<br>employer organization to all provisions, procedures, remedies, and penalties<br>provided for in chapter 51-15.7.A professional employer organization aggrieved by a decision of the secretary of<br>state in denying, revoking, or suspending the professional employer organization<br>license or ordering restitution or penalties may appeal the decision to the district<br>court of Burleigh County.8.A professional employer organization may not obtain a license under any name after<br>the denial of an application for a license or during the period of a revocation or<br>suspension.For the purposes of this subsection, a professional employerorganization that has had an application for a license denied or which has had a<br>license revoked or suspended includes any officer, director, agent, member, or<br>employee of the professional employer organization.9.Upon request of the secretary of state or attorney general, a professional employer<br>organization promptly shall provide an audited financial statement verified by a<br>certified public accountant licensed to practice in the jurisdiction in which the<br>accountant is located.43-55-09. Confidential records.1.The social security number or federal tax identification number disclosed or<br>contained in an application filed with the secretary of state under this chapter is<br>confidential.The secretary of state shall delete or obscure any social securitynumber or federal tax identification number before a copy of an application is<br>released to the public.2.All audited financial reports and the employers' quarterly contribution and wage<br>report to job service North Dakota are confidential except to the extent necessary for<br>the proper administration of this chapter by the secretary of state or the attorney<br>general.43-55-10. Interagency cooperation. A state agency, in performing duties under otherlaws that affect the regulation of professional employer organizations, shall cooperate with the<br>secretary of state as necessary to administer and enforce this chapter.Page No. 8Document Outlinechapter 43-55 professional employer organizations
