Indicates Matter Stricken

Indicates New Matter

Committee Report

February 28, 2023

S. 311

Introduced by Senator Gambrell

S. Printed 02/28/23--S.                                                                            [SEC 3/1/2023 1:35 PM]

Read the first time January 10, 2023

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The committee on Senate Labor, Commerce and Industry

To who was referred a Bill (S. 311) to amend the South Carolina Code of Laws by amending Section 40-68-55, relating to the ability of the Department of Insurance to regulate the acceptance of affidavit, etc., respectfully

Report:

That they have duly and carefully considered the same, and recommend that the same do pass with amendment:

    Amend the bill, as and if amended, SECTION 6, by striking Section 12-10-108(2) and inserting:

       (2) "Client company" means a person that contracts with a licensee and that is assigned employees under that contract. The term also means a person or entity that employs twenty or less employees of this State.

Amend the bill further, SECTION 6, by striking Section 12-10-108(3)(C)(2) and inserting:

       (2) If the client company also has employees subject to South Carolina withholding taxes payable by the client company, the client company is eligible to claim a job development credit for any such employee. The total amount of all job development credits that may be allocated in any calendar year must not exceed ten million dollars and must apply to eligible claimants on a first-come, first-served basis as determined by the Department of Revenue in a manner it prescribes until the total allowable credits for that calendar year are exhausted. The client company also shall provide the information set forth in this subsection concerning such employees.

Renumber sections to conform.

Amend title to conform.

THOMAS DAVIS for Committee.

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A bill

to amend the South Carolina Code of Laws by amending Section 40-68-55, relating to THE ABILITY OF THE DEPARTMENT OF INSURANCE TO REGULATE THE ACCEPTANCE OF AFFIDAVIT OR CERTIFICATION OF APPROVAL OF QUALIFIED ASSURANCE ORGANIZATIONS, so as to DELETE THE REQUIREMENT THAT THESE FUNCTIONS BE PROVIDED BY REGULATION; by amending Section 40-68-60, relating to THE REQUIREMENTS OF PROFESSIONAL EMPLOYMENT ORGANIZATION SERVICES AGREEMENTS BETWEEN PROFESSIONAL EMPLOYER ORGANIZATIONS AND ASSIGNED EMPLOYEES, so as to PROVIDE ORGANIZATIONS SHALL PROVIDE ASSIGNED EMPLOYEES WITH CERTAIN WRITTEN NOTICE OF HOW THE AGREEMENT AFFECTS THEM; by amending Section 40-68-70, relating to THE REQUIREMENTS OF PROFESSIONAL EMPLOYMENT ORGANIZATION SERVICES AGREEMENTS BETWEEN PROFESSIONAL EMPLOYER ORGANIZATIONS AND CLIENT COMPANIES, so as to PROVIDE THAT THE TERMS OF THE AGREEMENT MUST BE ESTABLISHED BY WRITTEN CONTRACT; by adding Section 40-68-145 SO AS TO PROVIDE FOR THE DETERMINATION OF TAX CREDITS AND ECONOMIC INCENTIVES BASED ON EMPLOYMENT WITH RESPECT TO CLIENT COMPANIES OF PROFESSIONAL EMPLOYER ORGANIZATIONS; by amending Section 40-68-150, relating to CERTAIN PROHIBITED ACTS, so as to PROVIDE PROFESSIONAL EMPLOYER ORGANIZATIONS SHALL NOT ENGAGE IN THE SALE OF INSURANCE OR ACT AS THIRD-PARTY ADMINISTRATORS, AND TO PROVIDE THAT THE SPONSORING AND MAINTAINING OF EMPLOYEE BENEFIT PLANS FOR THE BENEFIT OF ASSIGNED EMPLOYEES DOES NOT CONSTITUTE THE SALE OF INSURANCE; and by adding Section 12-10-108 so as to PROVIDE CIRCUMSTANCES IN WHICH PROFESSIONAL EMPLOYER ORGANIZATIONS MAY BE ELIGIBLE FOR CERTAIN TAX CREDITS AND ECONOMIC INCENTIVES UNDER THE ENTERPRISE ZONE ACT OF 1995.

Be it enacted by the General Assembly of the State of South Carolina:

SECTION 1.  Section 40-68-55 of the S.C. Code is amended to read:

    Section 40-68-55.  The department may by regulation provide for the acceptance of an affidavit or certification of a bonded, independent, and qualified assurance organization that has been approved by the department for certifying qualifications of a professional employer organization or professional employer organization group in lieu of those requirements of Sections 40-68-30 and 40-68-40 or any other requirements of a licensee under this chapter as determined by the department. In the regulationThe department may establish a fee structure for the acceptance not to exceed the fees in Section 40-68-50. Professional employer organizations or professional employer organization groups are subject to any assessment under Section 40-68-50(B). This section does not relieve a professional employer organization or professional employer organization group of any notice or disclosure obligations under this chapter to an insurer, client, or employee, or of any other requirement of this chapter not expressly waived by regulation of the department.

SECTION 2.  Section 40-68-60(A) and (B) of the S.C. Code is amended to read:

    (A) A licensee shall establish the terms of a professional employer organization services agreement by a written contract between the licensee and the client company. The licensee shall give written notice of the professional employer services agreement as it affects assigned employees to each employee assigned to a client company in the manner provided in this section.

    (B) A written explanation of the agreement general nature of the employee relationship among the professional employer organization, client company, and assigned employees must be provided to each assigned employee by delivering it to the employee personally within ten days after executing the agreement of the effective date of the contract between the licensee and the client company. If not otherwise provided in a separate document, the explanation also must state, substantially, the terms of the agreement between the licensee and client company and include the same notice that is required to be posted in the client company's place of business by subsection (C).