HB-6599, As Passed House, November 13, 2008

SUBSTITUTE FOR

HOUSE BILL NO. 6599

     A bill to amend 1936 (Ex Sess) PA 1, entitled

"Michigan employment security act,"

(MCL 421.1 to 421.75) by adding section 13m.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 13m. (1) A professional employer organization (PEO) shall

use the following method for employer reporting and contributions

obligations under this act:

     (a) The PEO shall file quarterly wage reports and unemployment

contribution reports as the employer of covered employees based on

the account information of each client employer. The PEO shall

provide the unemployment agency with a schedule showing the covered

employees and unemployment insurance employer account number of

each client employer as a part of each report. Each calendar

quarter in the manner required by R 421.121 of the Michigan

administrative code, the PEO or the client shall pay the

unemployment agency the total amount due for covered employees,

based on the individual contribution payments, itemized by client

employer account number.

     (b) A PEO shall notify the unemployment agency within 30 days

after any employer becomes a client of the PEO and within 30 days

after the PEO discontinues an association with a client employer.

     (c) The rates established shall comply with section 19. The

experience of the client employer prior to the reporting for its

employees by the PEO shall be combined with the experience of the

PEO in proportion to the number of client employees reported by the

PEO to the total number of employees reported by the PEO.

     (d) A business entity that becomes a client employer of a PEO

on or after January 1, 2009 shall retain its existing contribution

rate or establish a new rate as provided in section 19, if the

client employer is a contributing employer.

     (2) Within 30 days after the inception of each new PEO

agreement, the PEO shall provide the unemployment agency with the

name and employer identification number of each client under the

agreement and include a list of any active or inactive unemployment

insurance account number associated with that client and an

explanation of any client account that will remain open.

     (3) Within 30 days after the termination of a service contract

with a client, the PEO shall provide the unemployment agency with

the name and employer identification number of each client

separated under the terminated agreement and the date of the

separation.

     (4) By April 25, 2009, each client employer that does not have

a federal and state employer identification number shall register

for a federal and state employer identification number.

     (5) A report required under this act may be submitted

electronically.

     (6) The requirements in this section do not preclude the

unemployment agency from enforcing any provision of this act based

on any act or omission by a PEO that occurred before January 1,

2009.

     Enacting section 1. This amendatory act takes effect January

1, 2009.

     Enacting section 2. This amendatory act does not take effect

unless House Bill No. 6601 of the 94th Legislature is enacted into

law.