Surety Bond Blog » peo bond

North Dakota PEO Bond

Eric Weisbrot — Fri, 23 Apr 2010 13:49:23 +0000

North 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.

Connecticut Professional Employer Organization (PEO) Bond

Lisa Grimsley — Wed, 09 Sep 2009 15:37:08 +0000

The new Connecticut amendment HB 5113, effective January 1, 2009, says that PEOâ€™s (Professional Employer Organizations) need a working capital of at least $150,000 or they need to provide a surety bond, a letter of credit, or securities with a market value of $150,000. The surety bond is to ensure that the PEO will pay the taxes, wages, benefits, or entitlements if the PEO does not pay on time. If positive working capital is not shown on the PEOâ€™s financial statements, then the bond must be for $100,000 plus an amount sufficient to cover the deficit of the working capital. The law also states that a covered employee is not an employee of the PEO for purposes of general liability insurance, surety bonds, fidelity bonds, employerâ€™s liability, or employerâ€™s liability insurance. Other states have used these provisions in the past few sessions as well.

Utah Professional Employer Organization (PEO) Bond

Eric Weisbrot — Thu, 03 Sep 2009 13:57:22 +0000

There is a new requirement for Professional Employer Organizations in the state of Utah referred to as HB 159. The new law requires the Professional Employer Organizations (PEOs) to sustain a minimum working capital of $100,000 or post a bond in an amount no less than $100,000. The surety bond would guarantee the payment of any wage, tax, benefit, or other entitlement due to a covered employee not receiving payment from the PEO when it was due. HB 159 states that a “covered employee is not, only as the result of being a covered employee of a professional employer organization, an employee of the professional employer organization for purposes of general liability insurance, fidelity bond, surety bond, employer’s liability not covered by workers’ compensation, or liquor liability insurance carried by the professional employer organization unless the covered employee is included by specific reference in the professional employer agreement and applicable prearranged employment contract, insurance contract, or bond.” The new requirements have already been introduced and enacted in other states with the new provisions based on model legislation.