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.
Eric is the Chief Marketing Officer of JW Surety Bonds. With years of experience in the surety industry, he is also a contributing author to the surety bond blog. He has held a range of different roles within the surety industry, from agent assistant to bond issuer, which gives him a unique insider perspective on surety related topics.