Professional Employer Organization (PEO)
Unit Responsible for Program: PEO Unit
Policy Effective Date: June 1, 2008
Policy Revision Date: October 17,
Complaint Assignment: PEO complaints
are assigned to the PEO Unit in Columbus.
Management Approvals: The following
management level sign-offs are required.
of Employer Services
Legal Background: Legal
references for this policy are found in Ohio Revised Codes (ORC) 4125.01 to 4125.09 and ORC 4125.99 and Ohio Administrative
Code (OAC) 4123-17-15.
A Professional Employer Organization
(PEO) is required to provide security in the form of a bond or letter of credit
assignable to the Ohio Bureau of Workers’ Compensation (BWC) not to exceed an
amount equal to the workers’ compensation premiums and assessments incurred for
the two most recent payroll reporting periods. As an alternative to
providing security, the administrator shall permit a PEO to make advance
payments of premiums and assessments to the bureau.
A PEO electing to make advance payments
of premiums and assessments shall make such payments by utilizing the bureau’s
online payment system (FlexPay). The PEO electing to make advance
payments must report the estimated payroll and pay the premiums for the month
by the fifth day of that month. If the PEO fails to report payroll and
pay premiums timely through the FlexPay program, the PEO may be required to
post bond or a letter of credit.
The purpose of this procedure is to
outline the specific processing steps for accepting as timely an advanced
payment of premium and assessments received after the fifth day of the month.
The specific scenarios listed in this
procedure contain details on the conditions under which BWC will accept as
timely the advance payment of premium and assessments after the fifth date of
the month, without requiring the PEO to go through the BWC Adjudication
process. When the PEO Unit is recommending the acceptance of a late
payment, due to extenuating circumstances, as timely, the recommendation
requires management approval prior to accepting the payment as timely.
The steps listed below should be
followed when determining if a late premium and assessment payment will be
is general in nature and cannot address all potential situations.
finding that a good cause exists to grant a request for relief must provide
adequate documentation to support such finding.
Findings of good
cause must be brought to the attention of the immediate supervisor for review
Transaction Update Processing
The complaint process empowers field staff
to make decisions on issues and complaints brought by employers. A
component of the process is for field staff to recognize when it is appropriate
to update a transaction status in WCIS from Open (OP) to Appeal (AP).
Field staff should only utilize the appeal status update to ensure an open
transaction is not certified to the Attorney General in error.
When the PEO has requested that premium
and assessment paid after the fifth day of the month be accepted as timely, the
PEO Unit, after reviewing the documentation provided and determining if the
reason provided for the late payment is acceptable, shall complete the
Complaint Tracker explaining the rational for the recommended acceptance, and
explaining the documentation supporting the recommendation.
Evaluate Scenarios with
When researching and evaluating a PEO’s
request that a late premium and assessment payment be accepted as timely, you
will encounter situations having unusual or extenuating circumstances that
resulted in the premium and assessment payment being made after the fifth day
of the month.
a recommended solution to resolve the PEO’s late payment
management approval as outlined in this policy
approval recommendation to the PEO Unit for processing.
Scenarios That Do Not Qualify As
Extenuating Circumstances: The following are examples of scenarios that
should NOT be categorized as being an extenuating circumstance.
to the management staff within the organization
in personnel or CPA
or CPA error
over Ohio workers’ compensation law or rules
of a new computer system
Scenarios That Qualify As Extenuating Circumstances
Scenario 1: Scenarios
Involving a Significant Unpredictable Event
scenario is intended to include situations that are unpredictable and out of
the employer’s control that prevents the employer from filing appropriate
paperwork in a timely manner. Situations falling under this scenario
may include the following:
of nature such as tornado, flood, etc.
loss events such as water line break, fire, etc.
in the Workplace
must be a direct correlation between the event and the reason the employer
failed to pay the premium and assessments by the fifth day of the month.
Scenario 2: Scenarios Involving
Serious Illness, Injury or Death of Essential Personnel
deals with a situation where essential personnel within the organization; such
as the owner, Chief Operating Officer, Chief Financial Officer; has a serious
illness, injury or death that prevented the PEO from filing appropriate
paperwork or documentation (either hard copy or electronic) in a timely
physician’s verification must accompany the request. Such physician
verification should not include specific medical reasons for the absence, but
must include the dates the essential personnel missed work due to serious
illness, injury, or death.
must be a direct correlation between the absence of the essential personnel and
the reason the PEO was unable to complete the required activities within the
extenuating circumstance may be utilized only to extend the required
timeframe to meet a specific requirement. It cannot be used to
allow non-completion of the specific requirement.
Scenario 3: Scenarios Where Key
Personnel / Owner Called to Active Military Duty
deals with a situation where essential personnel within the organization, such
as the owner, officer, Chief Operating Officer, Chief Financial
Officer, has been called to active military duty that prevents the employer
from filing appropriate paperwork in a timely manner.
must be a direct correlation between the absence of the essential personnel and
the reason the PEO failed to pay the premium and assessments by the fifth day
of the month.
Scenario 4: Scenarios where the
BWC web site or the FlexPay option was not available for use
scenario deals with situations where the PEO attempted to pay premium by the
fifth day of the month and experienced difficulty with the BWC web site.
Such difficulties may include:
web site unavailable
option within the BWC web site was unavailable
experienced a power outage
Scenario 5: Scenarios where the
manual classification necessary for proper reporting of payroll is not assigned
to the PEO policy
deals with situations where the PEO attempts to pay the premium and realizes
the manual classification necessary to properly report the payroll is not
assigned to the PEO’s policy.
Scenario 6: Scenarios Involving Fraud or Gross Negligence
or illegal action, or gross negligence, of an employee or agent representing or
working on behalf of the employer. This employee or agent must have been
directly involved with or overseeing the functions related to the protested
issue. Employer relief is limited to those situations in which the
employer can verify through documentation that is has attempted to
initiate legal action against the employee or agent.
criminal or civil fraud or other illegal acts: Proof that the employer
has filed formal criminal charges or actively pursued legal action for civil
fraud or other illegal acts. A conviction is not required.
negligence: Proof that the employee has filed a civil complaint against
the employee or agent for recovery in any court. The employer is not
required to prevail in the civil action. Acceptable documentation may
also include rulings from other state or federal governmental agencies
attesting that the action is considered gross negligence.
receiving employer complaints alleging fraud or gross negligence should work
through their supervisor to seek advice from BWC Legal Division to determine if
the documents presented by the employer are valid legal documents as specified
by this scenario.
a recommendation is being made to approve an employer’s request to accept as
timely a payment received after the fifth day of the month, supporting
documentation must be provided to validate the accuracy of the reason for the
late payment submitted by the employer.
of appropriate supporting documentation are as follows:
report or insurance claim related to a natural disaster or significant event.
certificate or statement from treating physician.
order / call to active duty notice.
from BWC IT of problems with the BWC web site/FlexPay option at time PEO
indicates an attempt to pay premium.
from electric power company of power outage.
record of the PEO contacting BWC to request the manual classification necessary
to complete the proper reporting of payroll.
the Complaint Tracker. Documentation must include:
(i.e., background and other related facts).
state your recommendation and rationale for same.
name(s) of documents in UDS
Approval For Your Recommendation
the assigned BWC staff member has evaluated the complaint and made a
determination, the staff member will forward their recommendation for
management approval using the complaint tracking system. The system
will automatically forward the complaint to the next level for review and
approval. (refer to approval sign-off at beginning of this policy).
each level of approval, the reviewer will indicate approval or denial using the
complaint tracking system. The final reviewer will notify the initially
assigned BWC staff member and the appropriate BWC unit of their action.
Management approval in the complaint tracking system
does not mean the employer’s request is granted. Management approval
means management is agreeing with the BWC staff member’s recommendation to
either grant or deny the employer’s request.
upon whether the complaint is returned to the service
office or to a central processing unit, the responsible individual/unit will:
Send the employer a written response explaining the results of the
Create WCIS notepad entry to document the result of the employer’s
out the Complaint Tracker entry.
all documentation in the UDS Employer Electronic File Room.