State Codes and Statutes

Statutes > Nebraska > Chapter48 > 48-2706

48-2706. Co-employment relationship; restrictions;rights and obligations; professional employer agreement; contents; writtennotice to employee; posting of notice; responsibilities of client; liability;sales tax liability; health benefit plan.(1) No person shall knowingly enter intoa co-employment relationship in which less than a majority of the employeesof the client in this state are covered employees or in which less than one-halfof the payroll of the client in this state is attributable to covered employees.(2) Exceptas specifically provided in the Professional Employer Organization RegistrationAct or in the professional employer agreement, in each co-employment relationship:(a) The clientshall be entitled to exercise all rights and shall be obligated to performall duties and responsibilities otherwise applicable to an employer in anemployment relationship;(b) The professional employer organization shall be entitled toexercise only those rights and obligated to perform only those duties andresponsibilities specifically required by the act or in the professional employeragreement. The rights, duties, and obligations of the professional employerorganization as co-employer with respect to any covered employee shall belimited to those arising pursuant to the professional employer agreement andthe act during the term of co-employment by the professional employer organizationof such covered employee; and(c) Unless otherwise expressly agreed bythe professional employer organization and the client in a professional employeragreement, the client retains the exclusive right to direct and control thecovered employees as is necessary to conduct the client's business, to dischargeany of the client's fiduciary responsibilities, or to comply with any licensurerequirements applicable to the client or to the covered employees.(3) Exceptas specifically provided in the Professional Employer Organization RegistrationAct, the co-employment relationship between the client and the professionalemployer organization, and between each co-employer and each covered employee,shall be governed by the professional employer agreement. Each professionalemployer agreement shall include the following:(a) The allocation ofrights, duties, and obligations as described in this section;(b) A provisionthat the professional employer organization shall have responsibility to paywages to covered employees; to withhold, collect, report, and remit payroll-relatedand unemployment taxes; and, to the extent the professional employer organizationhas assumed responsibility in the professional employer agreement, to makepayments for employee benefits for covered employees. For purposes of thissection, wages does not include any obligation between a client and a coveredemployee for payments beyond or in addition to the covered employee's salary,draw, or regular rate of pay, such as bonuses, commissions, severance pay,deferred compensation, profit sharing, or vacation, sick, or other paid timeoff pay, unless the professional employer organization has expressly agreedto assume liability for such payments in the professional employer agreement;(c) A provisionthat the professional employer organization shall have a right to hire, discipline,and terminate a covered employee as may be necessary to fulfill the professionalemployer organization's responsibilities under the act and the professionalemployer agreement. The client shall have a right to hire, discipline, andterminate a covered employee; and(d) A provision that the responsibilityto obtain workers' compensation coverage for covered employees and for otheremployees of the client from an insurer licensed to do business in this stateand otherwise in compliance with all applicable requirements shall be specifiedin the professional employer agreement in accordance with section 48-2709.The client shall not be relieved of its obligations under the Nebraska Workers'Compensation Act to provide workers' compensation coverage in the event thatthe professional employer organization fails to obtain workers' compensationinsurance for which it has assumed responsibility.(4) With respect to eachprofessional employer agreement entered into by a professional employer organization,such professional employer organization shall provide written notice to eachcovered employee affected by such agreement. The professional employer organizationshall provide, and the client shall post in a conspicuous place at the client'sworksite, the following:(a) Notice of the general nature of the co-employment relationshipbetween and among the professional employer organization, the client, andany covered employees; and(b) Any notice required by the state relating to unemployment compensationand the minimum wage.(5) Except to the extent otherwise expressly provided by the applicableprofessional employer agreement:(a) A client shall be solely responsiblefor the quality, adequacy, or safety of the goods or services produced orsold in the client's business;(b) A client shall be solely responsiblefor (i) directing, supervising, training, and controlling the work of thecovered employees with respect to the business activities of the client orwhen such employees are otherwise acting under the express direction and controlof the client and (ii) the acts, errors, or omissions of the covered employeeswith regard to such activities or when such employees are otherwise actingunder the express direction and control of the client;(c) A clientshall not be liable for the acts, errors, or omissions of a professional employerorganization or of any covered employee of the client and a professional employerorganization when such covered employee is acting under the express directionand control of the professional employer organization;(d) Nothingin this subsection shall limit any contractual liability or obligation specificallyprovided in a professional employer agreement; and(e) A covered employeeis not, solely as the result of being a covered employee of a professionalemployer organization, an employee of the professional employer organizationfor purposes of general liability insurance, fidelity bonds, surety bonds,employer's liability which is not covered by workers' compensation, or liquorliability insurance carried by the professional employer organization unlessthe covered employee is included for such purposes by specific reference inthe professional employer agreement and in any applicable prearranged employmentcontract, insurance contract, or bond.(6) When a professional employer organizationobtains workers' compensation coverage for its clients that is written byan authorized insurer, it shall not be considered to be an insurer based onits provision of workers' compensation insurance coverage to a client, evenif the professional employer organization charges the client a different amountthan it is charged by the authorized insurer.(7) For purposes of thisstate or any county, municipality, or other political subdivision thereof:(a) Coveredemployees whose services are subject to sales tax shall be deemed the employeesof the client for purposes of collecting and levying sales tax on the servicesperformed by the covered employee. Nothing contained in the Professional EmployerOrganization Registration Act shall relieve a client of any sales tax liabilitywith respect to its goods or services;(b) Any tax or assessment imposed uponprofessional employer services or any business license or other fee whichis based upon gross receipts shall allow a deduction from the gross incomeor receipts of the business derived from performing professional employerservices that is equal to that portion of the fee charged to a client thatrepresents the actual cost of wages and salaries, benefits, workers' compensation,payroll taxes, withholding, or other assessments paid to or on behalf of acovered employee by the professional employer organization under a professionalemployer agreement;(c) Any tax assessed or assessment or mandated expenditure on aper capita or per employee basis shall be assessed against the client forcovered employees and against the professional employer organization for itsemployees who are not covered employees co-employed with a client. Any benefitor monetary consideration that meets the requirements of mandates imposedon a client and that is received by covered employees through the professionalemployer organization either through payroll or through benefit plans sponsoredby the professional employer organization shall be credited against the client'sobligation to fulfill such mandates; and(d) In the case of a tax or an assessmentimposed or calculated upon the basis of total payroll, the professional employerorganization shall be eligible to apply any small business allowance or exemptionavailable to the client for the covered employees for the purpose of computingthe tax.(8) A professional employer organization shall not offer its coveredemployees any health benefit plan which is not fully insured by an authorizedinsurer. SourceLaws 2010, LB579, § 6.Operative Date: January 1, 2012 Cross ReferencesNebraska Workers' Compensation Act, see section 48-1,110.

State Codes and Statutes

Statutes > Nebraska > Chapter48 > 48-2706

48-2706. Co-employment relationship; restrictions;rights and obligations; professional employer agreement; contents; writtennotice to employee; posting of notice; responsibilities of client; liability;sales tax liability; health benefit plan.(1) No person shall knowingly enter intoa co-employment relationship in which less than a majority of the employeesof the client in this state are covered employees or in which less than one-halfof the payroll of the client in this state is attributable to covered employees.(2) Exceptas specifically provided in the Professional Employer Organization RegistrationAct or in the professional employer agreement, in each co-employment relationship:(a) The clientshall be entitled to exercise all rights and shall be obligated to performall duties and responsibilities otherwise applicable to an employer in anemployment relationship;(b) The professional employer organization shall be entitled toexercise only those rights and obligated to perform only those duties andresponsibilities specifically required by the act or in the professional employeragreement. The rights, duties, and obligations of the professional employerorganization as co-employer with respect to any covered employee shall belimited to those arising pursuant to the professional employer agreement andthe act during the term of co-employment by the professional employer organizationof such covered employee; and(c) Unless otherwise expressly agreed bythe professional employer organization and the client in a professional employeragreement, the client retains the exclusive right to direct and control thecovered employees as is necessary to conduct the client's business, to dischargeany of the client's fiduciary responsibilities, or to comply with any licensurerequirements applicable to the client or to the covered employees.(3) Exceptas specifically provided in the Professional Employer Organization RegistrationAct, the co-employment relationship between the client and the professionalemployer organization, and between each co-employer and each covered employee,shall be governed by the professional employer agreement. Each professionalemployer agreement shall include the following:(a) The allocation ofrights, duties, and obligations as described in this section;(b) A provisionthat the professional employer organization shall have responsibility to paywages to covered employees; to withhold, collect, report, and remit payroll-relatedand unemployment taxes; and, to the extent the professional employer organizationhas assumed responsibility in the professional employer agreement, to makepayments for employee benefits for covered employees. For purposes of thissection, wages does not include any obligation between a client and a coveredemployee for payments beyond or in addition to the covered employee's salary,draw, or regular rate of pay, such as bonuses, commissions, severance pay,deferred compensation, profit sharing, or vacation, sick, or other paid timeoff pay, unless the professional employer organization has expressly agreedto assume liability for such payments in the professional employer agreement;(c) A provisionthat the professional employer organization shall have a right to hire, discipline,and terminate a covered employee as may be necessary to fulfill the professionalemployer organization's responsibilities under the act and the professionalemployer agreement. The client shall have a right to hire, discipline, andterminate a covered employee; and(d) A provision that the responsibilityto obtain workers' compensation coverage for covered employees and for otheremployees of the client from an insurer licensed to do business in this stateand otherwise in compliance with all applicable requirements shall be specifiedin the professional employer agreement in accordance with section 48-2709.The client shall not be relieved of its obligations under the Nebraska Workers'Compensation Act to provide workers' compensation coverage in the event thatthe professional employer organization fails to obtain workers' compensationinsurance for which it has assumed responsibility.(4) With respect to eachprofessional employer agreement entered into by a professional employer organization,such professional employer organization shall provide written notice to eachcovered employee affected by such agreement. The professional employer organizationshall provide, and the client shall post in a conspicuous place at the client'sworksite, the following:(a) Notice of the general nature of the co-employment relationshipbetween and among the professional employer organization, the client, andany covered employees; and(b) Any notice required by the state relating to unemployment compensationand the minimum wage.(5) Except to the extent otherwise expressly provided by the applicableprofessional employer agreement:(a) A client shall be solely responsiblefor the quality, adequacy, or safety of the goods or services produced orsold in the client's business;(b) A client shall be solely responsiblefor (i) directing, supervising, training, and controlling the work of thecovered employees with respect to the business activities of the client orwhen such employees are otherwise acting under the express direction and controlof the client and (ii) the acts, errors, or omissions of the covered employeeswith regard to such activities or when such employees are otherwise actingunder the express direction and control of the client;(c) A clientshall not be liable for the acts, errors, or omissions of a professional employerorganization or of any covered employee of the client and a professional employerorganization when such covered employee is acting under the express directionand control of the professional employer organization;(d) Nothingin this subsection shall limit any contractual liability or obligation specificallyprovided in a professional employer agreement; and(e) A covered employeeis not, solely as the result of being a covered employee of a professionalemployer organization, an employee of the professional employer organizationfor purposes of general liability insurance, fidelity bonds, surety bonds,employer's liability which is not covered by workers' compensation, or liquorliability insurance carried by the professional employer organization unlessthe covered employee is included for such purposes by specific reference inthe professional employer agreement and in any applicable prearranged employmentcontract, insurance contract, or bond.(6) When a professional employer organizationobtains workers' compensation coverage for its clients that is written byan authorized insurer, it shall not be considered to be an insurer based onits provision of workers' compensation insurance coverage to a client, evenif the professional employer organization charges the client a different amountthan it is charged by the authorized insurer.(7) For purposes of thisstate or any county, municipality, or other political subdivision thereof:(a) Coveredemployees whose services are subject to sales tax shall be deemed the employeesof the client for purposes of collecting and levying sales tax on the servicesperformed by the covered employee. Nothing contained in the Professional EmployerOrganization Registration Act shall relieve a client of any sales tax liabilitywith respect to its goods or services;(b) Any tax or assessment imposed uponprofessional employer services or any business license or other fee whichis based upon gross receipts shall allow a deduction from the gross incomeor receipts of the business derived from performing professional employerservices that is equal to that portion of the fee charged to a client thatrepresents the actual cost of wages and salaries, benefits, workers' compensation,payroll taxes, withholding, or other assessments paid to or on behalf of acovered employee by the professional employer organization under a professionalemployer agreement;(c) Any tax assessed or assessment or mandated expenditure on aper capita or per employee basis shall be assessed against the client forcovered employees and against the professional employer organization for itsemployees who are not covered employees co-employed with a client. Any benefitor monetary consideration that meets the requirements of mandates imposedon a client and that is received by covered employees through the professionalemployer organization either through payroll or through benefit plans sponsoredby the professional employer organization shall be credited against the client'sobligation to fulfill such mandates; and(d) In the case of a tax or an assessmentimposed or calculated upon the basis of total payroll, the professional employerorganization shall be eligible to apply any small business allowance or exemptionavailable to the client for the covered employees for the purpose of computingthe tax.(8) A professional employer organization shall not offer its coveredemployees any health benefit plan which is not fully insured by an authorizedinsurer. SourceLaws 2010, LB579, § 6.Operative Date: January 1, 2012 Cross ReferencesNebraska Workers' Compensation Act, see section 48-1,110.

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State Codes and Statutes

Statutes > Nebraska > Chapter48 > 48-2706

48-2706. Co-employment relationship; restrictions;rights and obligations; professional employer agreement; contents; writtennotice to employee; posting of notice; responsibilities of client; liability;sales tax liability; health benefit plan.(1) No person shall knowingly enter intoa co-employment relationship in which less than a majority of the employeesof the client in this state are covered employees or in which less than one-halfof the payroll of the client in this state is attributable to covered employees.(2) Exceptas specifically provided in the Professional Employer Organization RegistrationAct or in the professional employer agreement, in each co-employment relationship:(a) The clientshall be entitled to exercise all rights and shall be obligated to performall duties and responsibilities otherwise applicable to an employer in anemployment relationship;(b) The professional employer organization shall be entitled toexercise only those rights and obligated to perform only those duties andresponsibilities specifically required by the act or in the professional employeragreement. The rights, duties, and obligations of the professional employerorganization as co-employer with respect to any covered employee shall belimited to those arising pursuant to the professional employer agreement andthe act during the term of co-employment by the professional employer organizationof such covered employee; and(c) Unless otherwise expressly agreed bythe professional employer organization and the client in a professional employeragreement, the client retains the exclusive right to direct and control thecovered employees as is necessary to conduct the client's business, to dischargeany of the client's fiduciary responsibilities, or to comply with any licensurerequirements applicable to the client or to the covered employees.(3) Exceptas specifically provided in the Professional Employer Organization RegistrationAct, the co-employment relationship between the client and the professionalemployer organization, and between each co-employer and each covered employee,shall be governed by the professional employer agreement. Each professionalemployer agreement shall include the following:(a) The allocation ofrights, duties, and obligations as described in this section;(b) A provisionthat the professional employer organization shall have responsibility to paywages to covered employees; to withhold, collect, report, and remit payroll-relatedand unemployment taxes; and, to the extent the professional employer organizationhas assumed responsibility in the professional employer agreement, to makepayments for employee benefits for covered employees. For purposes of thissection, wages does not include any obligation between a client and a coveredemployee for payments beyond or in addition to the covered employee's salary,draw, or regular rate of pay, such as bonuses, commissions, severance pay,deferred compensation, profit sharing, or vacation, sick, or other paid timeoff pay, unless the professional employer organization has expressly agreedto assume liability for such payments in the professional employer agreement;(c) A provisionthat the professional employer organization shall have a right to hire, discipline,and terminate a covered employee as may be necessary to fulfill the professionalemployer organization's responsibilities under the act and the professionalemployer agreement. The client shall have a right to hire, discipline, andterminate a covered employee; and(d) A provision that the responsibilityto obtain workers' compensation coverage for covered employees and for otheremployees of the client from an insurer licensed to do business in this stateand otherwise in compliance with all applicable requirements shall be specifiedin the professional employer agreement in accordance with section 48-2709.The client shall not be relieved of its obligations under the Nebraska Workers'Compensation Act to provide workers' compensation coverage in the event thatthe professional employer organization fails to obtain workers' compensationinsurance for which it has assumed responsibility.(4) With respect to eachprofessional employer agreement entered into by a professional employer organization,such professional employer organization shall provide written notice to eachcovered employee affected by such agreement. The professional employer organizationshall provide, and the client shall post in a conspicuous place at the client'sworksite, the following:(a) Notice of the general nature of the co-employment relationshipbetween and among the professional employer organization, the client, andany covered employees; and(b) Any notice required by the state relating to unemployment compensationand the minimum wage.(5) Except to the extent otherwise expressly provided by the applicableprofessional employer agreement:(a) A client shall be solely responsiblefor the quality, adequacy, or safety of the goods or services produced orsold in the client's business;(b) A client shall be solely responsiblefor (i) directing, supervising, training, and controlling the work of thecovered employees with respect to the business activities of the client orwhen such employees are otherwise acting under the express direction and controlof the client and (ii) the acts, errors, or omissions of the covered employeeswith regard to such activities or when such employees are otherwise actingunder the express direction and control of the client;(c) A clientshall not be liable for the acts, errors, or omissions of a professional employerorganization or of any covered employee of the client and a professional employerorganization when such covered employee is acting under the express directionand control of the professional employer organization;(d) Nothingin this subsection shall limit any contractual liability or obligation specificallyprovided in a professional employer agreement; and(e) A covered employeeis not, solely as the result of being a covered employee of a professionalemployer organization, an employee of the professional employer organizationfor purposes of general liability insurance, fidelity bonds, surety bonds,employer's liability which is not covered by workers' compensation, or liquorliability insurance carried by the professional employer organization unlessthe covered employee is included for such purposes by specific reference inthe professional employer agreement and in any applicable prearranged employmentcontract, insurance contract, or bond.(6) When a professional employer organizationobtains workers' compensation coverage for its clients that is written byan authorized insurer, it shall not be considered to be an insurer based onits provision of workers' compensation insurance coverage to a client, evenif the professional employer organization charges the client a different amountthan it is charged by the authorized insurer.(7) For purposes of thisstate or any county, municipality, or other political subdivision thereof:(a) Coveredemployees whose services are subject to sales tax shall be deemed the employeesof the client for purposes of collecting and levying sales tax on the servicesperformed by the covered employee. Nothing contained in the Professional EmployerOrganization Registration Act shall relieve a client of any sales tax liabilitywith respect to its goods or services;(b) Any tax or assessment imposed uponprofessional employer services or any business license or other fee whichis based upon gross receipts shall allow a deduction from the gross incomeor receipts of the business derived from performing professional employerservices that is equal to that portion of the fee charged to a client thatrepresents the actual cost of wages and salaries, benefits, workers' compensation,payroll taxes, withholding, or other assessments paid to or on behalf of acovered employee by the professional employer organization under a professionalemployer agreement;(c) Any tax assessed or assessment or mandated expenditure on aper capita or per employee basis shall be assessed against the client forcovered employees and against the professional employer organization for itsemployees who are not covered employees co-employed with a client. Any benefitor monetary consideration that meets the requirements of mandates imposedon a client and that is received by covered employees through the professionalemployer organization either through payroll or through benefit plans sponsoredby the professional employer organization shall be credited against the client'sobligation to fulfill such mandates; and(d) In the case of a tax or an assessmentimposed or calculated upon the basis of total payroll, the professional employerorganization shall be eligible to apply any small business allowance or exemptionavailable to the client for the covered employees for the purpose of computingthe tax.(8) A professional employer organization shall not offer its coveredemployees any health benefit plan which is not fully insured by an authorizedinsurer. SourceLaws 2010, LB579, § 6.Operative Date: January 1, 2012 Cross ReferencesNebraska Workers' Compensation Act, see section 48-1,110.

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