(1) Except as specifically provided in this chapter, a coemployment relationship between a client and a professional employer organization, and between each coemployer and a covered employee, is governed by a professional employer agreement.
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Terms Used In Utah Code 31A-40-202

  • Client: means a person who enters into a professional employer agreement with a professional employer organization. See Utah Code 31A-40-102
  • Coemployer: means :
         (4)(a) a client; or
         (4)(b) a professional employer organization. See Utah Code 31A-40-102
  • Coemployment relationship: means a relationship:
         (5)(a) that is intended to be ongoing rather than a temporary or project specific relationship; and
         (5)(b) wherein the rights and obligations of an employer that arise out of an employment relationship are allocated between coemployers pursuant to:
              (5)(b)(i) a professional employer agreement; or
              (5)(b)(ii) this chapter. See Utah Code 31A-40-102
  • Contract: A legal written agreement that becomes binding when signed.
  • Covered employee: means an individual who has a coemployment relationship with a client and a professional employer organization if the conditions of Section 31A-40-203 are met. See Utah Code 31A-40-102
  • Employee: means :
         (57)(a) an individual employed by an employer; or
         (57)(b) an individual who meets the requirements of Subsection (55)(b). See Utah Code 31A-1-301
  • Fiduciary: A trustee, executor, or administrator.
  • Insurance: includes :
              (96)(b)(i) a risk distributing arrangement providing for compensation or replacement for damages or loss through the provision of a service or a benefit in kind;
              (96)(b)(ii) a contract of guaranty or suretyship entered into by the guarantor or surety as a business and not as merely incidental to a business transaction; and
              (96)(b)(iii) a plan in which the risk does not rest upon the person who makes an arrangement, but with a class of persons who have agreed to share the risk. See Utah Code 31A-1-301
  • Liability insurance: includes :
              (112)(b)(i) vehicle liability insurance;
              (112)(b)(ii) residential dwelling liability insurance; and
              (112)(b)(iii) making inspection of, and issuing a certificate of inspection upon, an elevator, boiler, machinery, or apparatus of any kind when done in connection with insurance on the elevator, boiler, machinery, or apparatus. See Utah Code 31A-1-301
  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
  • Professional employer agreement: means a written contract by and between a client and a professional employer organization that provides for:
         (15)(a) the coemployment of a covered employee;
         (15)(b) with respect to a covered employee, the allocation of a right or obligation of an employer between:
              (15)(b)(i) the client; and
              (15)(b)(ii) the professional employer organization; and
         (15)(c) the assumption of the obligations imposed by this chapter by:
              (15)(c)(i) the client; or
              (15)(c)(ii) the professional employer organization. See Utah Code 31A-40-102
  • professional employer organization: means a person engaged in the business of providing a professional employer service. See Utah Code 31A-40-102
  • Rate: means :
              (163)(a)(i) the cost of a given unit of insurance; or
              (163)(a)(ii) for property or casualty insurance, that cost of insurance per exposure unit either expressed as:
                   (163)(a)(ii)(A) a single number; or
                   (163)(a)(ii)(B) a pure premium rate, adjusted before the application of individual risk variations based on loss or expense considerations to account for the treatment of:
                        (163)(a)(ii)(B)(I) expenses;
                        (163)(a)(ii)(B)(II) profit; and
                        (163)(a)(ii)(B)(III) individual insurer variation in loss experience. See Utah Code 31A-1-301
(2)

     (2)(a) As used in this Subsection (2), unless a professional employer organization expressly agrees to assume liability for the payment in a professional employer agreement, the term “compensation to a covered employee” does not include an obligation between a client and a covered employee for a payment beyond or in addition to the covered employee’s salary, draw, or regular rate of pay, such as:

          (2)(a)(i) a bonus;
          (2)(a)(ii) a commission;
          (2)(a)(iii) severance pay;
          (2)(a)(iv) deferred compensation;
          (2)(a)(v) profit sharing; or
          (2)(a)(vi) pay for vacation, sick, or other paid time off.
     (2)(b) A professional employer agreement shall include the following:

          (2)(b)(i) the allocation of a right or obligation consistent with Section 31A-40-201;
          (2)(b)(ii) a requirement that the professional employer organization shall:

               (2)(b)(ii)(A) pay compensation to a covered employee; and
               (2)(b)(ii)(B) withhold, collect, report, and remit one or more of the following:

                    (2)(b)(ii)(B)(I) a payroll-related tax; and
                    (2)(b)(ii)(B)(II) an unemployment insurance contribution; and
               (2)(b)(ii)(C) to the extent that the professional employer organization assumes responsibility in the professional employer agreement, make payments for an employee benefit of a covered employee;
          (2)(b)(iii) that the professional employer organization has a right to hire, discipline, or terminate a covered employee to the extent necessary to fulfill the professional employer organization’s obligations under the professional employer agreement and this chapter;
          (2)(b)(iv) that the client has a right to hire, discipline, and terminate a covered employee; and
          (2)(b)(v) the responsibility of the client or professional employer organization related to obtaining workers’ compensation coverage for a covered employee in a manner consistent with Section 31A-40-209.
(3) A professional employer organization shall provide written notice to a covered employee of the general nature of the coemployment relationship between and among the professional employer organization, the client, and the covered employee.
(4)

     (4)(a) Except to the extent otherwise expressly provided by the professional employer agreement:

          (4)(a)(i) a client is solely responsible for the quality, adequacy, or safety of a good or service produced or sold in the client’s business;
          (4)(a)(ii) a client is solely responsible for directing, supervising, training, and controlling the work of a covered employee with respect to:

               (4)(a)(ii)(A) a business activity of the client;
               (4)(a)(ii)(B) the discharge of a fiduciary responsibility of the client; or
               (4)(a)(ii)(C) compliance with a licensure, registration, or certification requirement applicable to the client or to the covered employee;
          (4)(a)(iii) a client is solely responsible for an act, error, or omission of a covered employee with regard to a circumstance described in Subsection (4)(a)(ii);
          (4)(a)(iv) a client is not liable for an act, error, or omission of:

               (4)(a)(iv)(A) a professional employer organization; or
               (4)(a)(iv)(B) a covered employee, if the covered employee is acting under the express direction and control of the professional employer organization; and
          (4)(a)(v) a professional employer organization is not liable for an act, error, or omission of:

               (4)(a)(v)(A) a client; or
               (4)(a)(v)(B) a covered employee, if the covered employee is acting under the express direction and control of the client.
     (4)(b) This Subsection (4) may not be interpreted to limit a contractual liability or obligation specifically provided in a professional employer agreement.
     (4)(c)

          (4)(c)(i) Unless the conditions of Subsection (4)(c)(ii) are met, a covered employee is not, solely as the result of being a covered employee of a professional employer organization, an employee of the professional employer organization for purposes of one or more of the following carried by the professional employer organization:

               (4)(c)(i)(A) general liability insurance;
               (4)(c)(i)(B) a fidelity bond;
               (4)(c)(i)(C) a surety bond;
               (4)(c)(i)(D) an employer liability that is not covered by workers’ compensation; or
               (4)(c)(i)(E) liquor liability insurance.
          (4)(c)(ii) A covered employee is considered an employee of the professional employer organization for a purpose described in Subsection (4)(c)(i) if the covered employee is included by specific reference for that purpose in:

               (4)(c)(ii)(A) the professional employer agreement; and
               (4)(c)(ii)(B) a prearranged employment contract, insurance contract, or bond.
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