OhioBWC - Basics: (Policy library) - File

 

Policy Name:

Professional Employer Organizations (PEOs)

Policy #:

EP-16-04

Code/Rule Reference:

ORC Chapter 4125, ORC 4123.15. OAC 4123-17-15, 4123-17-15.1, 4123-17-15.2, 4123-17-15.4, 4123-17-15.6, 4123-17-15.7, 4123-17-14.

Effective Date:

January 1, 2019

Origin:

Employer Policy

Supersedes:

Professional Employer Organization (PEO) Policy including Use of NCCI Manual of Clients effective July 2007.

History:

Revised March 5, 2019; March 12, 2008. New policy, July 2007.

Review Date:

January 1, 2024

 

 

I.       Policy Purpose

 

The Ohio Bureau of Workers’ Compensation (BWC) is responsible for administering and enforcing ORC Chapter 4125 Professional Employer Organizations (PEOs).

 

II.     Applicability

 

This policy applies to: state fund PEOs and their authorized representatives; PEO reporting entities and their authorized representatives; client employers of PEOs and their authorized representatives; assurance organizations; and the BWC Professional Employer Organization Unit.

 

III.    Definitions

 

A.     Professional Employer Organization (PEO): A sole proprietor, partnership, association, limited liability company, or corporation that enters into an agreement with one or more client employers for the purpose of co-employing all or part of the client employer’s workforce at the client employer’s work site. PEO does not include a temporary service agency.

B.     Client employer: A sole proprietor, partnership, association, limited liability company, or corporation that enters into a PEO agreement and is assigned shared employees by the PEO.

C.      Co-employ: The sharing of the responsibilities and liabilities of being an employer.

D.     Employer Services Assurance Corporation (ESAC): An independent nonprofit corporation that is an accreditation and financial assurance organization for the PEO industry.

E.      PEO agreement: A written contract to co-employ employees between a PEO and a client employer with a duration not less than twelve (12) months in accordance with the requirements of ORC Chapter 4125.

F.      PEO reporting entity: Two or more PEOs that are majority owned or commonly controlled by the same entity, parent, or controlling person and satisfy reporting entity control rules as defined by the financial accounting standards board and under Generally Accepted Accounting Principles (GAAP).

G.     Shared employee: An individual intended to be assigned to a client employer on a permanent basis, not as a temporary supplement to the client employer’s workforce, who is co-employed by a PEO and a client employer pursuant to a PEO agreement.

H.     Working capital: The excess of current assets over current liabilities as determined by GAAP.

IV.   Policy

A.     Overview:

1.      PEOs are co-employers. The PEO relationship involves a contractual allocation, and sharing of employer responsibilities, between the PEO and the client employer under a PEO agreement.

2.      BWC is responsible for enforcing ORC Chapter 4125 Professional Employer Organizations.

3.      Where a PEO is required to give notice, register, or make a report to BWC, the PEO must use forms required by BWC. The PEO must complete the forms in full, as determined by BWC, for such notice, registration, or report to be effective.

4.      BWC will not use this policy to address PEO participation in employer programs. See the specific employer program policy for information about PEO participation.

B.     Registration and reporting requirements.

1.      PEOs:

a.      A PEO operating in Ohio must apply for coverage with BWC and obtain a BWC policy number.

b.      The PEO must register with BWC by submitting the Professional Employer Organization Registration Application (UA-1) no later than thirty (30) days after the formation of the PEO. The PEO must submit an initial registration fee of $1,000 with its registration.

c.      The PEO must submit the following information when initially registering and when annually renewing registration with BWC:

i.       A list of the PEO’s client employers current as of the date of the initial or renewal registration. The list must include the employer’s name, address, federal identification number, and BWC policy number;

ii.      The name(s) under which the PEO conducts business;

iii.     The addresses of the PEO’s principal place of business and each office maintained in Ohio;

iv.     The PEO’s taxpayer or employer identification number;

v.      A list of each state in which the PEO has operated in the preceding five years, and the name, corresponding with each state, under which the PEO operated, including any alternative names, predecessor names, and if known, successors;

vi.     A list of all corporate officers;

vii.   A list of all related corporate entities;

viii.  An attestation of the accuracy of the data submissions from the chief executive officer (CEO), president, or other individual who serves as the controlling person of the PEO;

ix.     Security as required under ORC 4123.05; and

x.      The most recent financial statement prepared and audited in accordance with OAC 4123-17-15.4. For initial registration, such financial statement must be no older than thirteen (13) months at the time it is submitted to BWC. For renewal registration, the financial statement must be submitted within one hundred eighty (180) days of the close of the PEO’s fiscal year.

2.      PEO reporting entities:

a.      Commonly owned or controlled PEOs may register as a PEO reporting entity or register individually.

b.      A PEO reporting entity completing the financial reporting requirements for commonly owned or controlled PEOs must submit an initial registration fee of $1,000 for each full registration PEO within the PEO reporting entity. The PEO reporting entity must submit the following information when registering and renewing registration with BWC:

i.       A list of each of the PEOs for which the PEO reporting entity will complete financial reporting requirements;

ii.      The name(s) under which the PEO reporting entity conducts business;

iii.     The address of the PEO reporting entity’s principal place of business and the address of each office the PEO reporting entity maintains in Ohio;

iv.     The PEO reporting entity’s taxpayer of employer identification number;

v.      A list of all corporate officers of the PEO reporting entity;

vi.     The most recent financial statement prepared and audited in accordance with OAC 4123-17-15.4. The financial statement must be no older than thirteen (13) months at the time it is submitted to BWC;

vii.   Security as required under ORC 4125.05; and

viii.  An attestation of the accuracy of the data submissions from the CEO, president, or other individual who serves as the controlling person of the PEO reporting entity.

3.      BWC may grant limited registration to a PEO for reasons specified by BWC in the certificate of limited registration.

a.       The PEO must provide all of the following to BWC:

i.       A properly executed Professional Employer Organization Limited Registration Application (UA-1 L);

ii.      A fee of $100;

iii.     All information required for registration set forth in sections IV.B.1.c.i through IV.B.1.c.x above; and

iv.     Information and documentation necessary to show the PEO satisfies all of the following criteria:

a)      The PEO is domiciled outside of Ohio and does not maintain an office in Ohio;

b)     The PEO is licensed or registered as a PEO in another state;

c)      The PEO does not participate in direct solicitations for client employers located or domiciled in Ohio; and

d)     The PEO has fifty (50) or fewer shared employees employed or domiciled on any given day. For purposes of this paragraph, a PEO is not domiciled outside of Ohio if a commonly owned or otherwise related corporate entity is domiciled or maintains an office in Ohio.

b.      BWC may require security of the limited registration PEO pursuant to ORC 4125.05 and OAC 4123-17-15.2.

c.      All limited registration PEO client employers must report all payroll and claims under the client employer policy.

4.      Following the initial registration, each PEO and PEO reporting entity must renew its registration and pay the annual renewal fee no later than December 31 of each year. The annual renewal fee must be submitted as follows:

a.      For each full registration PEO, $250.

b.      For each PEO reporting entity, $250 for each PEO within the PEO reporting entity.

c.      For each limited registration PEO, $100.

5.      The PEO must provide BWC with a semi-annual report of its client employers and total workforce no later than June 30 and December 31 of each year.

6.      BWC maintains a list of registered PEOs and PEO reporting entities that is readily available to the public.

7.      Except as necessary for BWC and its employees to perform their official duties, all records, reports, client lists, and other information obtained from a PEO or a PEO reporting entity are confidential. These records, reports, client lists and other information will be considered trade secrets and will not be published or open to public inspection.

C.      Financial requirements.

1.      The PEO must prepare financial statements in accordance with GAAP and submit them electronically to BWC for registration and registration renewal. For initial registration, such financial statements must be no older than thirteen (13) months at the time of submission to BWC. For renewal registration, the financial statements must be submitted within one hundred eighty (180) days of the close of the PEO’s fiscal year.

a.      The financial statements must be audited by an independent certified public accountant (CPA).

i.       The resulting report of the auditor must not include either of the following:

a)      A qualification or disclaimer of opinion as to adherence to GAAP; or

b)     A statement expressing substantial doubt about the ability of the PEO or PEO reporting entity to continue as a going concern.

ii.      If a PEO does not have at least twelve (12) months of operating history on which to base financial statements, the PEO must:

a)      Provide a bond or letter of credit in an amount not less than $100,000 as determined by BWC; and

b)     Provide CPA reviewed financial statements until such time the PEO can provide GAAP financials within one hundred eighty (180) days of the end of the PEOs initial fiscal year. The PEO must apply to BWC in writing for an extension of this deadline. The PEO’s CPA must explain the reasons for the delay.

b.      A PEO reporting entity may submit a combined or consolidated financial statement. If the combined or consolidated financial statement includes entities that are not PEOs, or are not in the PEO reporting entity, the controlling entity of the PEO reporting entity submitting the financial statement must guarantee the PEOs have satisfied the working capital requirements.

2.      A PEO or PEO reporting entity must maintain positive working capital at initial or renewal registration as reflected in the financial statements submitted to BWC. If a deficit in working capital is reflected in the financial statements submitted to BWC, the PEO or PEO reporting entity must:

a.      Submit a quarterly financial statement to BWC for each calendar quarter during which there is a deficit of working capital, accompanied by an attestation of the CEO, president, or other individual who serves as the controlling person of the PEO that all wages, taxes, workers’ compensation premiums, and employee benefits have been paid by the PEO or members of the PEO reporting entity.

b.      Obtain a bond, irrevocable letter of credit, or securities with minimum market value sufficient to cover the deficit in working capital. Such security must be held by a depository designated by BWC. The security will be used by BWC to secure payment by the PEO or PEO reporting entity of all taxes, benefits, or other entitlements due or otherwise pertaining to shared employees, if the PEO or PEO reporting entity does not make those payments when due.

3.      The BWC PEO Unit will inform the Employer Services Assurance Corporation (ESAC) when a member PEO has a deficit in working capital. ESAC will review the case and provide BWC its opinion, in writing, of the PEO’s financial solvency.

a.      If ESAC provides a positive endorsement of the PEO’s solvency, ESAC will provide the security for the PEO.

b.      If ESAC does not endorse the PEO’s solvency, BWC will require the PEO to provide security in the form of a surety bond or letter of credit in the amount of the deficit.

c.      BWC may revoke the PEO’s registration if the PEO fails to provide security for the deficit in working capital.

D.     PEO agreements.

1.      There are three types of PEO agreements based on the reporting of payroll and claims:

a.      All payroll and claims reported under the PEO policy.

b.      All payroll and claims reported under the client policy.

c.      A portion of payroll and claims reported under the PEO policy. (See Part Leases section below)

2.      The PEO must notify BWC within thirty (30) days of entering into or changing the type of PEO agreement by submitting the Professional Employer Organization Client Relationship Notification (UA-3) form. If BWC is not notified within thirty (30) days:

a.      The PEO agreement will be recognized on the date BWC receives the notice.

b.      The client employer will be responsible for reporting payroll and claims under its policy until the recognized effective date of a full PEO reporting agreement.

3.      Where a client employer enters into a PEO agreement:

a.      The client employer must establish and maintain coverage with BWC.

b.      The PEO will be considered the succeeding employer, solely for purposes of workers’ compensation experience, and the PEO will be subject to OAC 4123-17-02.

c.      When the PEO agreement is terminated, the PEO declares bankruptcy, or the PEO ceases operation in Ohio, the PEO must notify BWC and each client employer within thirty (30) days from the effective date of termination. The PEO must identify the portion of the PEO’s experience to be transferred to each client employer by submitting forms Labor Lease Transaction – Payroll (AC-18) and Labor Lease Transaction – Claims (AC-19) to BWC.

4.      A PEO agreement, or a change in a PEO agreement, filed with BWC will have the following effective date for workers’ compensation premium and claims purposes:

a.      If the commencement date of the PEO agreement or change in PEO agreement is January 1 or July 1, the commencement date; or

b.      If the commencement date of the PEO agreement or change in PEO agreement is not January 1 or July 1, the next January 1 or July 1, whichever is earlier.

5.      If the PEO submits a PEO reporting or part PEO agreement, with an effective date in the middle of the payroll period, BWC will require the PEO to resubmit a new or modified PEO agreement, signed by the client employer, acknowledging all under client PEO agreement.

6.      For payroll reported under the PEO’s policy, the PEO must report payroll within the existing manual classifications of the client employer.

7.      A PEO who enters into a PEO agreement with a non-complying employer, or a PEO who fails to comply with OAC 4123-17-15 through 4123-17-15.7, will not be considered the employer for workers’ compensation purposes. In these circumstances:

a.      The payroll and claims of shared employees must be reported under the client employer’s workers’ compensation policy number, unless prohibited by federal law; and

b.      Claims filed by shared employees will be charged to the experience of the client employer.

c.      This policy does not include instances where a PEO enters into a PEO agreement with a client who has never established a BWC policy. In these instances, all claims and payroll experience will remain with the PEO employer for the period previous to the client establishing a BWC policy number.

8.      BWC will not recognize a PEO agreement when the employees of an out-of-state client employer do not have sufficient contacts with Ohio to meet the jurisdictional requirements for coverage.

9.      A PEO is prohibited from entering into any PEO agreement where the client employer is a PEO, and BWC will not recognize any PEO agreement where the client employer is a PEO.

10.   BWC will assess a $50 late processing fee for each occurrence of a PEO failing to:

a.      Notify BWC within thirty (30) days when entering into, or changing, a PEO agreement;

b.      Notify BWC or a client employer within thirty (30) days of termination of a PEO agreement;

c.      Notify BWC or a client employer within thirty (30) days of declaring bankruptcy; and

d.      Notify BWC or a client employer within thirty (30) days of ceasing operations in Ohio.

E.      Part leases.

1.      A PEO may enter into a PEO agreement to co-employ part of a client employer’s workforce, provided the client employer is not a temporary agency, only to the extent the PEO pays and reports wages under its tax identification number for federal tax purposes.

2.      Under a part lease agreement payroll must be reported to BWC as follows:

a.      The PEO must report under its BWC policy number payroll paid and reported for federal tax purposes under the PEO’s tax identification number.

b.      The client employer must report under its BWC policy number payroll associated with wages not paid and reported under the PEO’s tax identification number.

3.      All of a client employer’s payroll within a manual classification must be reported to BWC in its entirety under either the BWC policy number of the PEO or the client employer. Such payroll may not be split between the PEO and the client employer.  

F.      Client employer estimated annual premium (EAP) and installments.

1.      All payroll is reported under the client employer’s policy:

a.      The client employer will receive the notice of EAP prior to the beginning of the policy year.

b.      The client employer will follow the installment schedule established at the beginning of the policy year.

2.      All payroll is reported under the PEO policy:

a.      New PEO agreement: BWC will stop the client employer’s installments as of the effective date of the PEO agreement. BWC will recalculate the client employer’s EAP to zero.

b.      PEO agreement termination: BWC will begin client employer installments as of the effective date of PEO agreement termination. BWC will recalculate the client employer’s EAP for the remaining policy year upon request.

3.      A part lease PEO agreement: The payroll is reported under the PEO policy. New part lease PEO agreement: The client employer’s installment schedule remains in place until BWC recalculates the client employer’s EAP to account for the remaining manual classifications reported under the client’s policy.

G.     Religious exemption guidelines.

1.      BWC will recognize a religious exemption for a PEO and all shared employees who meet the requirements of ORC 4123.15 as clarified below.

2.      In order for the religious exemption to be applicable to a PEO agreement, the exemption must first be established between the client employer and the employee. The client employer and employee must be members of the same religious sect.

3.      As of the effective date of the exemption, the PEO is no longer required to report payroll and pay premium and assessments on the shared employee covered by the exemption.

4.      The exemption is valid for all future years unless BWC determines the client employer, the individual shared employee, or the religious sect ceases to meet the requirements for the religious exemption.

5.      BWC PEO requirements are not affected by any PEO federal reporting requirements relating to the religious exemption.

H.     Transfers of experience.

1.      There is no transfer of experience when the client employer is a public employer taxing district (PEC).

2.      BWC will transfer the appropriate experience period payroll and claims to the PEO when the PEO elects to report all, or a portion, of the payroll and claims under its policy. There are unique claim circumstances depending on the rating plans of the PEO and the client employer.

3.      State fund PEO and a:

a.      State fund client employer:

i.       Both experience period payroll and claims will be transferred from the client employer to the PEO to calculate the PEO’s experience modification (EM).

ii.      Upon termination of the PEO agreement, appropriate experience period payroll and claims will be transferred from the PEO to the client employer to calculate the client employer’s EM.

b.      Retrospectively rated client employer:

i.       Both experience period payroll and claims will be transferred from the client employer to the PEO to calculate the PEO’s EM. Retrospective claims incurred prior to the PEO agreement will continue to be used in the client employer’s annual retrospective evaluation.

ii.      Upon termination of the PEO agreement, appropriate experience period payroll and claims will be transferred from the PEO to the client employer to calculate the client employer’s EM. Claims incurred during the PEO agreement are considered non-retrospective and will not be used in the client employer’s annual retrospective evaluation.

c.      Deductible Program client employer:

i.       Both experience period payroll and claims will be transferred from the client employer to the PEO to calculate the PEO’s EM. Deductible claims incurred prior to the PEO agreement will continue to be billed to the client employer.

ii.      Upon termination of the PEO agreement, appropriate experience period payroll and claims will be transferred from the PEO to the client employer to calculate the client employer’s EM. Claims incurred during the PEO agreement are not in the Deductible Program, and those claim costs will not be billed to the client employer’s Deductible Program.

4.      Retrospectively rated PEO and a:

a.      State fund client employer:

i.       Both experience period payroll and claims will be transferred from the client employer to the PEO to calculate the PEO’s EM. The claims will not be used in the PEO’s annual retrospective evaluation.

ii.      Upon termination of the PEO agreement, appropriate experience period payroll and claims will be transferred from the PEO to the client employer to calculate the client employer’s EM. Claims incurred during the PEO agreement will continue to be used in the PEO’s annual retrospective evaluation.

b.      Retrospectively rated client employer:

i.       Both experience period payroll and claims will be transferred from the client employer to the PEO to calculate the PEO’s EM. Retrospective claims incurred prior to the PEO agreement will continue to be used in the client employer’s annual retrospective evaluation.

ii.      Upon termination of the PEO agreement, appropriate experience period payroll and claims will be transferred from the PEO to the client employer to calculate the client employer’s EM. Claims incurred during the PEO agreement will continue to be used in the PEO’s annual retrospective evaluation.

c.      Deductible Program client employer:

i.       Both experience period payroll and claims will be transferred from the client employer to the PEO to calculate the PEO’s EM. Deductible claims incurred prior to the PEO agreement will continue to be billed to the client employer.

ii.      Upon termination of the PEO agreement, appropriate experience period payroll and claims will be transferred from the PEO to the client employer to calculate the client employer’s EM. Claims incurred during the PEO agreement will continue to be used in the PEO’s annual retrospective evaluation. Claims incurred during the PEO agreement are not in the Deductible Program, and those claim costs will not be billed to the client employer’s Deductible Program.

5.      Deductible Program participant PEO and a:

a.      State fund client employer:

i.       Both experience period payroll and claims will be transferred from the client employer to the PEO to calculate the PEO’s EM. The claims will not be included in the PEO’s Deductible Program.

ii.      Upon termination of the PEO agreement, appropriate experience period payroll and claims will be transferred from the PEO to the client employer to calculate the client employer’s EM. Deductible claims incurred during the PEO agreement will continue to be billed to the PEO.

b.      Retrospectively rated client employer:

i.       Both experience period payroll and claims will be transferred from the client employer to the PEO to calculate the PEO’s EM. Retrospective claims incurred prior to the PEO agreement will continue to be used in the client employer’s annual retrospective evaluation.

ii.      Upon termination of the PEO agreement, appropriate experience period payroll and claims will be transferred from the PEO to the client employer to calculate the client employer’s EM. Deductible claims incurred during the PEO agreement will continue to be billed to the PEO.

c.      Deductible Program client employer:

i.       Both experience period payroll and claims will be transferred from the client employer to the PEO to calculate the PEO’s EM. Deductible claims incurred prior to the PEO agreement will continue to be billed to the client employer.

ii.      Upon termination of the PEO agreement, appropriate experience period payroll and claims will be transferred from the PEO to the client employer to calculate the client employer’s EM. Deductible claims incurred during the PEO agreement will continue to be billed to the PEO.

6.      A PEO’s EM is recalculated two times per year or upon request with due cause and BWC PEO Unit approval.

I.       PEO obligations. A PEO must perform all of the following functions:

1.      Provide written notice to each shared employee of the relationship between, and the responsibilities of, the PEO and the client employer.

2.      Pay wages and payroll taxes associated with shared employees as established in the PEO agreement. The responsibility for making these payments is not contingent on receipt of payment from the client employer. Shared employee wages must be paid by and reported under the PEO’s tax identification number for federal tax purposes. A PEO may only enter into agreements in which all employees of the client employer are shared and reported under the PEO’s tax identification number for federal tax purposes, but reported under the client employer’s policy number for workers’ compensation purposes, when:

a.      The client employer’s payroll is wholly reported under the PEO employer’s tax identification number for federal tax purposes; and

b.      The client employer’s payroll is wholly reported under the client employer’s policy number for workers’ compensation purposes.

3.      Maintain adequate and required employment related records for employees and for reporting such information as required by appropriate governmental agencies.

4.      Comply with applicable state laws regarding workers’ compensation insurance coverage.

5.      Maintain payroll and claims records for each of the PEO’s client employers for each payroll reporting period.

a.      Payroll records must clearly identify the appropriate manual classification assigned to each client employer, the payroll reported in each manual classification, and the premiums paid for each client employer for each payroll period covered by the PEO agreement.

b.      Claims records must be separately identified according to the client employer.

6.      Report individual client employer payroll, claims, and classification data under a separate and unique subaccount with BWC.

7.      Maintain workers’ compensation coverage, pay all workers’ compensation premiums, and manage all workers’ compensation claims, filings, and related procedures associated with shared employees.

a.      When shared employees are ministers or elective coverage persons as defined in OAC 4123-17-07, the PEO’s payroll report must include the entire amount of payroll associated with these persons and will not be subject to the weekly minimum and maximum provided in OAC 4123-17-30.

b.      The PEO must maintain workers’ compensation coverage under its policy number for all payroll reported under its tax identification number for federal tax purposes, except as provided in section IV.I.2.

8.      Within fourteen (14) days of receiving notice from BWC that a refund or rebate will be applied to workers’ compensation premium, the PEO must provide a copy of such notice to any client employer to whom the notice is relevant.

J.       Reporting of payroll and payment of premium.

1.      The PEO must electronically report payroll on BWC’s web site for each month no later than the fifteenth day after the last day of the month for which the payroll is being reported.

2.      The PEO must pay all premium and assessments concurrently with the monthly reporting of payroll.

3.      If the PEO fails to make timely payment of premium and assessments, the PEO’s coverage will lapse, and BWC will proceed to revoke the PEO’s registration pursuant to ORC 4125.06 and OAC 4123-17-15.7.

4.      PEOs with zero payroll must file a monthly report.

5.      All client employers must file an annual payroll true-up with BWC. See the Payroll True-Up policy for additional information.

K.      Client employer information.

1.      The PEO must provide the client employer with a list of all of the following information upon written request:

a.      All premiums and payroll associated with the client employer;

b.      All workers’ compensation claims, including the compensation and benefits paid, and established reserves for each claim; and

c.      Any other information available to the PEO from BWC regarding the client employer.

2.      The PEO must provide the information listed above in writing to the client employer within forty-five (45) days of receipt of the written request. The PEO has provided the information to the employer when:

a.      The information is received by the US Postal Service; or

b.      The information is personally delivered, in writing, to the client employer. Information sent via email is personally delivered at the time the information is sent by the PEO to a valid email address for the client employer.

3.      The client employer may submit a complaint to BWC if the PEO fails to comply with the written request for information.

a.      BWC will investigate the complaint to determine if the PEO complied with the request.

b.      If BWC determines the PEO failed to comply with the request for information:

i.       BWC will provide the requested information to the client employer. BWC will assess the PEO with the costs associated with the investigation and providing the information to the client employer; and

ii.      BWC will notify the PEO’s client employers of the failure to comply with a request for information and advise the employers of their ability to request such information.

L.      Denial or revocation of PEO registration.

1.      BWC will deny or revoke the registration of a PEO or PEO reporting entity if it fails to comply with financial requirements.

2.      BWC may deny or revoke the registration of a PEO or PEO reporting entity and rescind its status as a co-employer upon finding the PEO or PEO reporting entity:

a.      Obtained or attempted to obtain registration through misrepresentation, misstatement of a material fact, or fraud.

b.      Misappropriated any funds of a client employer.

c.      Used fraudulent or coercive practices to obtain or retain business or demonstrated financial irresponsibility.

d.      Failed to appear, without reasonable cause or excuse, in response to a subpoena lawfully issued by BWC.

e.      Failed to comply with the requirements of OAC 4123-17-15 through 4123-17-15.5.

3.      Concurrent with, or upon, the denial or revocation of the registration of a PEO or a PEO reporting entity, and rescission of its status as a co-employer, BWC may deny or revoke the registration, and rescind the status as a co-employer, of any PEO or PEO reporting entity that is majority owned or commonly controlled by the same entity, parent, or controlling person.

4.      The PEO may appeal a denial or revocation of status pursuant to the administrative hearing procedure set forth in ORC Chapter 119.

5.      BWC’s decision to deny or revoke a PEO’s registration or to rescind its status as a co-employer is stayed pending the exhaustion of all administrative appeals by the PEO.

6.      Upon revocation of the PEO’s registration, each client employer must file payroll reports and pay workers’ compensation premiums directly to BWC, at a rate determined by BWC, based on the client employer’s individual payroll and claims experience.

7.      If BWC has denied or revoked the registration of a PEO or PEO reporting entity, and rescinded its status as a co-employer, then any of the following are prohibited from reapplying as a PEO or PEO reporting entity for a period of two years from the date of denial, revocation, or rescission:

a.      The former PEO or former PEO reporting entity; or

b.      Any applicant that is majority owned, or commonly controlled, by the same entity, parent, or controlling person of the former PEO or former PEO reporting entity.

8.      If BWC has revoked or denied a PEO’s registration, BWC will notify an employer who inquires of the PEO’s denial or revocation, if all administrative appeals are not yet exhausted, of the fact that the PEO has the right to appeal BWC’s decision.

M.    Resolution of complaints.

1.      PEO and client employer complaints must be processed under the General Employer Complaint Policy.

2.      BWC has not identified any extenuating circumstances specific to PEOs or client employers.