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The Working Group has been reviewing the professional employer organization (PEO)/employee leasing model laws and/or other approaches to address issues presented through the June 2002 “Report on Employee Leasing and Professional Employer Organizations” (in addition to later creditable concerns).
A PEO may be defined as a business entity that enters into agreements with other businesses under which the PEO assumes or shares employment responsibilities for all or a significant number of the worksite employees of the other business. However, PEO does not include a business entity that recruits and hires its own employees; assigns them to clients on a temporary basis to support or supplement the client’s work force in special work situations such as employee absences, temporary skill shortages and seasonal workloads; and customarily attempts to reassign the employees to other clients when they finish each assignment. [“Client” may be defined as an employer whose workforce consists in whole or part of PEO co-employees—individuals whose employment responsibilities are shared between a client and a PEO.]
The Working Group has drafted its “Workers’ Compensation Coverage for Professional Employer Organization Arrangements Model Regulation.” Upon adoption of the draft PEO model regulation the Working Group is to begin development of a paper to assist states with implementation of this model.
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