South Carolina Code 40-68-160. Disciplinary action; grounds; sanctions; notice, hearing, and appeal; reinstatement
(B) The department may take disciplinary action against a licensee, or a person engaging in professional employer services without a license, on any of the following grounds:
Terms Used In South Carolina Code 40-68-160
- Applicant: means a business seeking to be licensed under this chapter or seeking the renewal of a license under this chapter. See South Carolina Code 40-68-10
- Contract: A legal written agreement that becomes binding when signed.
- Controlling person: means :
(a) an officer or director of a corporation seeking to offer professional employer services, a shareholder holding ten percent or more of the voting stock of a corporation seeking to offer professional employer services, or a partner of a partnership seeking to offer professional employer services;
(b) an individual who possesses, directly or indirectly, the power to direct or cause the direction of the management or policies of a company seeking to offer professional employer services through the ownership of voting securities, by contract or otherwise, and who is actively involved in the day-to-day management of the company; or
(c) an individual employed, appointed, or authorized by a business seeking to offer professional employer services to enter into a contractual relationship with a client company on behalf of the business. See South Carolina Code 40-68-10 - Conviction: A judgement of guilt against a criminal defendant.
- Department: means the South Carolina Department of Consumer Affairs. See South Carolina Code 40-68-10
- Fraud: Intentional deception resulting in injury to another.
- Licensee: means a person licensed under this chapter as a professional employer organization to provide professional employer services. See South Carolina Code 40-68-10
- Nolo contendere: No contest-has the same effect as a plea of guilty, as far as the criminal sentence is concerned, but may not be considered as an admission of guilt for any other purpose.
- Person: means an individual, association, corporation, partnership, or other private legal entity. See South Carolina Code 40-68-10
- Plea: In a criminal case, the defendant's statement pleading "guilty" or "not guilty" in answer to the charges, a declaration made in open court.
- Probation: A sentencing alternative to imprisonment in which the court releases convicted defendants under supervision as long as certain conditions are observed.
- Professional employer organization: means an individual business entity that offers professional employer services. See South Carolina Code 40-68-10
- Professional employer services: means an arrangement by which employees of a licensee are assigned to work at a client company and in which employment responsibilities are shared by the licensee and the client company. See South Carolina Code 40-68-10
(1) the conviction of a licensee or a controlling person of a licensee of bribery, fraud, or intentional or material misrepresentation in obtaining, attempting to obtain, or renewing a license;
(2) the conviction of a licensee or a controlling person of a licensee of a crime that relates to the operation of a professional employer organization or the ability of the licensee or a controlling person of a licensee to operate a professional employer organization;
(3) the conviction of a licensee or a controlling person of a licensee of a crime that relates to the classification, misclassification, or under-reporting of employees under the South Carolina Workers’ Compensation Act;
(4) the conviction of a licensee or a controlling person of a licensee of a crime that relates to the establishment or maintenance of a self-insurance program, whether health insurance, workers’ compensation insurance, or other insurance;
(5) the conviction of a licensee or a controlling person of a licensee of a crime that relates to fraud, deceit, or misconduct in the operation of a professional employer organization;
(6) engaging in professional employer services without a license;
(7) transferring or attempting to transfer a license issued pursuant to this chapter;
(8) violating this chapter or an order or regulation issued by the department pursuant to this chapter;
(9) failing to notify the department, in writing, of the civil judgment or felony conviction of a controlling person not later than the thirtieth day after the date on which the judgment or conviction is entered;
(10) failing to cooperate with an investigation, examination, or audit of the licensee’s records conducted by the licensee’s insurance company or its designee, as provided by the insurance contract or as authorized by law by the South Carolina Department of Insurance;
(11) failing to notify the department and the South Carolina Department of Insurance not later than the thirtieth day after the effective date of a change in ownership, principal business address, or the address of accounts and records;
(12) failing to correct a tax filing or payment deficiencies within a reasonable time as determined by the department;
(13) refusing, after reasonable notice, to meet reasonable health and safety requirements within the licensee’s control and made known to the licensee by a federal or state agency;
(14) failing to correct a delinquency in the payment of the licensee’s insurance premiums within a reasonable time;
(15) failing to correct a delinquency in the payment of an employee benefit plan premiums or contributions within a reasonable time;
(16) knowingly or without sufficient inquiry, maintaining, sponsoring, offering, endorsing, or otherwise proffering self-insured, self-funded, or other employee benefit plans that are not licensed by the Department of Insurance;
(17) knowingly making a material misrepresentation to an insurance company, to the department, or other governmental agency;
(18) adverse final action by a state or federal regulatory agency for violations within the scope or control of the licensee;
(19) failure to inform the department in writing within thirty days of an adverse final action by a state or federal regulatory agency; or
(20) in case of a professional employer organization or group that has qualified for licensing pursuant to § 40-68-55, the failure to notify the department within thirty days of any change in the status of its certification with the independent and qualified assurance organization.
(C) Upon finding that a licensee has violated one or more provisions of this section, the department may:
(1) deny an application for a license;
(2) revoke, restrict, suspend, or refuse to renew a license;
(3) impose an administrative penalty in an amount not less than one thousand dollars for each violation, but not more than fifty thousand dollars;
(4) issue a reprimand;
(5) issue a cease and desist order; or
(6) place the licensee on probation for a period and subject to conditions and restrictions that the department specifies.
(D) On revocation, or suspension of a license, the licensee immediately shall return the license to the department and may not:
(1) solicit any new clients; or
(2) enter into or execute any additional contracts for professional employer services.
(E) Disciplinary action, a denial of an application for a new or renewal license, a revocation or suspension of a license, or a determination that a controlling person is unqualified may occur subject to the Administrative Procedures Act, with notice to, and an opportunity for a hearing by, the affected applicant, licensee, or controlling person. All contested hearings pursuant to this section are before the Administrative Law Court.
(F) If a license is revoked or renewal is denied, the affected licensee may request a reinstatement hearing after a minimum of one year. The department may reinstate or renew the license only if the cause of the nonrenewal or revocation has been corrected.
(G) A licensee who is found to be engaged in unlawful conduct may be assessed the reasonable costs necessary to the investigation, disciplinary proceedings, court proceedings, or other actions to enforce the provisions of this chapter.