Professional employer services agreement requirements

Every professional employer services agreement ("PEO agreement") shall comply with the following requirements: (1) The agreement shall be in writing and executed by both the PEO and the client. (2) The agreement shall have an initial term of at least one year or, in the absence of an initial term of one year, the agreement shall clearly indicate that the intent is for the agreement to be ongoing rather than temporary. (3) The agreement shall provide that the client retains control over its business enterprise and exercises direction and control over the covered employees as to the manner and method of work done in furtherance of the client's business, but that authority and responsibility as to other employment matters, including but not limited to hiring, firing, discipline, and compensation are allocated to and shall be between the PEO and the client. (4) The agreement shall specifically provide for and allocate responsibility between the PEO and the client company with regard to the procurement and maintenance of workers' compensation insurance covering their liability for workers' compensation benefits and group health insurance to or with respect to the employees covered by the professional services agreement. (5) The agreement shall state specifically that the agreement is executed between the parties subject to the provisions of this Part.