23-575

23-575. Violations; classification; civil penalties;
rules

A. A person who offers to provide or actually provides professional
employer services or uses the name professional employer organization, staff leasing,
employee leasing or administrative employee or any other title representing a
professional employer service without first registering with the secretary of state
pursuant to section 23-563 is guilty of a class 1 misdemeanor.

B. A person who knowingly provides false or fraudulent information to the secretary
of state under this article is guilty of a class 1 misdemeanor.

C. A person who is a controlling person of a professional employer organization and
who collects payments from a client representing wages, taxes, benefit payments or
insurance payments and fails to remit the funds to the appropriate government or private
entity within a reasonable time is guilty of theft as provided in section 13-1802.

D. A person who is a controlling person of a client of a professional employer
organization and who fraudulently or falsely procures or attempts to procure services or
benefits from a registered professional employer organization without having monies that
are adequate to compensate the professional employer organization is guilty of a class 4
felony.

E. If a person wilfully fails to comply with any requirement of this article,
knowingly makes a material misrepresentation to the secretary of state, violates
subsection A, B or C of this section or is guilty of an offense relating to the operation
of a professional employer organization, the secretary of state:

1. Shall impose a civil penalty not to exceed one thousand dollars against the
person for each violation. The secretary of state shall deposit, pursuant to sections
35-146 and 35-147, penalties collected pursuant to this paragraph in the state general
fund.

2. May deny an application for registration.

3. May revoke, restrict or refuse to renew a registration.

4. May place a registrant on probation for a period of time determined by rules
adopted by the secretary of state.

F. The secretary of state shall adopt rules for hearings and penalties for
violations of this article or rules adopted under this article.