North Dakota PEO Bond

North DakotaNorth Dakota is enacting a new law concerning PEO’s within the State. The new law is named HB 1361 and amends the bonding requirements in present law for PEO’s. The previous law required a PEO to sustain a minimum working capital of $100,000 or to acquire a surety bond in a minimum of $100,000 to guarantee the payment of any tax, wage, benefit, or other entitlement due to a covered employee. HB 1361 makes the surety bond obligatory, as well as the working capital requirement which must be for 5% of the compensation reported on the employer’s quarterly federal fax return for the quarter concluding before the day of the license application. The surety bond is capped at $500,000. Should the PEO not have a minimum working capital of $100,000, then it also has the option to attain the greater of a surety bond for $100,000, or 5% of the compensation reported on its quarterly federal tax return; but cannot surpass $500,000. HB 1361 requires notification 45 days before the termination of the surety bond.