CHAPTER 7. GENERAL REQUIREMENTS AND PROVISIONS
IC 27-16-7
Chapter 7. General Requirements and Provisions
IC 27-16-7-1
Requirements of co-employment relationships
Sec. 1. Except as provided in a professional employer agreement,the following apply to a co-employment relationship:
(1) The client:
(A) may exercise and enforce all rights; and
(B) is obligated to perform all duties and responsibilities;
that otherwise apply to an employer in an employmentrelationship, that are allocated to the client by the professionalemployer agreement and this article, and that are notspecifically allocated to the PEO by the professional employeragreement and this article.
(2) The PEO:
(A) may exercise and enforce only the rights; and
(B) is obligated to perform only the duties andresponsibilities;
that are required of the PEO or specifically allocated to the PEOby this article and the professional employer agreement.
(3) Unless otherwise expressly agreed by the PEO and the clientin the professional employer agreement, the client retains theexclusive right to direct and control the covered employees asnecessary to:
(A) conduct the client's business;
(B) discharge the client's fiduciary responsibilities; or
(C) comply with licensure requirements that apply to theclient or the covered employees.
As added by P.L.245-2005, SEC.7.
IC 27-16-7-2
Professional employer agreement contents
Sec. 2. (a) Except as provided in this article, the co-employmentrelationship between a client and a PEO, and between a co-employerand a covered employee, is governed by the professional employeragreement.
(b) A professional employer agreement must specify thefollowing:
(1) The allocation of rights, duties, and responsibilitiesdescribed in section 1 of this chapter.
(2) Except as provided in subsection (c), that the PEO isresponsible for:
(A) payment of wages to covered employees;
(B) withholding, collection, reporting, and remittance ofpayroll related and unemployment taxes; and
(C) to the extent the PEO has assumed responsibility in theprofessional employer agreement, making payments foremployee benefits for covered employees.
(3) The allocation, to either the client or the PEO, of the
responsibility to obtain worker's compensation coverage forcovered employees from a worker's compensation insurer thatis authorized under this title to conduct the business ofinsurance in Indiana.
(4) If the professional employer agreement allocates theresponsibility under subdivision (3) to the PEO, a requirementthat the PEO maintain and provide to the client, at the client'srequest at the termination of the professional employeragreement, records regarding loss experience related to theworker's compensation insurance coverage.
(c) A PEO is not responsible for an obligation between a clientand a covered employee for payments in addition to the coveredemployee's salary, draw, or regular rate of pay, including bonuses,commissions, severance pay, deferred compensation, profit sharing,or vacation, sick, or other paid time off, unless the PEO has expresslyagreed to assume liability for the payments in the professionalemployer agreement.
As added by P.L.245-2005, SEC.7.
IC 27-16-7-3
Notice to affected employees
Sec. 3. A PEO shall provide written notice to each coveredemployee who is affected by a professional employer agreemententered into by the PEO concerning the general nature of theco-employment relationship between and among the PEO, the client,and the covered employee.
As added by P.L.245-2005, SEC.7.
IC 27-16-7-4
Responsibilities of clients, PEOs, and covered employees
Sec. 4. (a) Except as expressly provided by the professionalemployer agreement:
(1) a client:
(A) is solely responsible for:
(i) the quality, adequacy, or safety of goods or servicesproduced or sold in the client's business;
(ii) directing, supervising, training, and controlling thework of a covered employee with respect to the businessactivities of the client; and
(iii) the acts, errors, or omissions of a covered employeewith respect to activities described in item (ii); and
(B) is not liable for the acts, errors, or omissions of:
(i) the PEO; or
(ii) a covered employee of the client and a PEO when thecovered employee is acting under the express direction andcontrol of the PEO.
(2) A PEO is not liable for the acts, errors, or omissions of aclient or a covered employee of the client when the coveredemployee is acting under the express direction and control ofthe client. (3) A covered employee is not, solely as the result of being acovered employee of a PEO, an employee of the PEO forpurposes of:
(A) general liability insurance;
(B) fidelity bonds;
(C) surety bonds;
(D) employer's liability that is not covered by worker'scompensation; or
(E) liquor liability insurance;
carried by the PEO unless the covered employee is specified asan employee of the PEO by specific reference in theprofessional employer agreement and any applicableprearranged employment contract, insurance contract, or bond.
(b) This section does not limit:
(1) a contractual liability or obligation specified in aprofessional employer agreement; or
(2) the liabilities and obligations of a PEO or client as specifiedin this article.
As added by P.L.245-2005, SEC.7.
IC 27-16-7-5
PEO not engaged in business of insurance
Sec. 5. A PEO that offers, markets, sells, administers, or providesprofessional employer services under a professional employeragreement as provided in this article is not:
(1) engaged in the business of insurance; or
(2) acting as an administrator (as defined in IC 27-1-25-1).
As added by P.L.245-2005, SEC.7.
IC 27-16-7-6
Basis of fees or taxes on PEOs
Sec. 6. (a) A business license fee or another fee that is based upongross receipts must, in the case of a PEO, be based upon theadministrative fee of the PEO.
(b) A tax assessed on a per capita or per employee basis must beassessed against a:
(1) client for covered employees; and
(2) PEO for the PEO's employees who are not coveredemployees.
(c) In the case of tax imposed or calculated upon the basis of totalpayroll, a PEO is eligible to apply a small business allowance orexemption available to the client for covered employees for thepurpose of computing the tax.
As added by P.L.245-2005, SEC.7.