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STATE OF OKLAHOMA
1st Session of the 58th Legislature (2021)
SENATE BILL 196 By: Rader
AS INTRODUCED
An Act relating to the Oklahoma Professional E mployer
Organization Recognition and Regi stration Act;
amending 40 O.S. 2011, Sections 600.4, as amended by
Section 1, Chapter 238, O.S.L. 2012 and 600.6 (40
O.S. Supp. 2020, Section 600.4), which relate to
registration and tax requirements; authorizing an
attorney to certify certain financial statements and
payment of payroll taxes; and providing an effective
date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 40 O.S. 2011, Section 600.4, as
amended by Section 1, Chapter 238, O.S.L. 2012 (40 O.S. Supp. 2020,
Section 600.4), is amended to read as follows:
Section 600.4. A. Registration required. Except as otherwise
provided in the Oklahoma Professional Employer Organization
Recognition and Registration Act, no person shall, unle ss the person
is registered as a PEO or PEO Group under the Oklahoma Professional
Employer Organization Recognition and Registration Act, provide,
advertise, or otherwise hold itself out as providing professional
employer services in this state.
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B. Registration information.
1. Each PEO or PEO Group required to be registered under the
Oklahoma Professional Employer Organization Recognition and
Registration Act shall provide the Insurance Commissioner with
information required by the Commissioner on forms p rescribed by the
Commissioner. Pursuant to paragraph 2 of this subsection, a PEO or
PEO Group may use a qualified assurance organization as approved by
the Commissioner to provide services related to the registration of
the PEO or PEO Group. A PEO or PEO Group may authorize an assuranc e
organization to act on behalf of the PEO or PEO Group in complyin g
with the registration requirements set forth in the Oklahoma
Professional Employer Organization Recognition and Registration Act,
including, but not limite d to, electronic filings of info rmation and
payment of registration fees. At a minimum, PEOs, PEO Groups or an
approved assurance organization acting on behalf of the PEO or PEO
Group, shall provide the following information:
a. the name or names under wh ich the PEO or PEO Group
conducts business,
b. the address of the principal place of business of th e
PEO or PEO Group and the address of each office it
maintains in this state,
c. the PEO’s or PEO Group’s taxpayer or employer
identification number,
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d. a list by jurisdiction of each name under which the
PEO or PEO Group has operated in the preceding five
(5) years, including any alternative names, names of
predecessors and, if known, successor business
entities,
e. a statement of ownership, which shall inclu de the name
and evidence of the business experience of any person
that, individually or acting in c oncert with one or
more other persons, owns or controls, directly or
indirectly, twenty-five percent (25%) or more of the
equity interests of the PEO or PEO Group,
f. a statement of managem ent, which shall include the
name and evidence of the business expe rience of any
person who serves as president, chief executive
officer, or otherwise has the authority to act as
senior executive officer of the PEO or PEO Gr oup, and
g. a financial statemen t setting forth the financial
condition of the PEO or PEO Group, as of a date not
earlier than one hundred eighty (180) days prior to
the date submitted to the Commissioner, prepared in
accordance with generally accepted acc ounting
principles, and certified by an attorney licensed to
practice in the jurisdiction in which such attorney is
located or audited or reviewed by an independent
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certified public accountant licensed to practice in
the jurisdiction in which such accou ntant is located.
A PEO Group may submit combined or consolidated
audited or reviewed financial st atements to meet the
requirements of this section.
2. The financial statement required by subparagraph g of
paragraph 1 of this subsection may be dated as o f a date that is not
earlier than three hundred sixty -five (365) days before the date on
which the application is submitted in the event the PEO or P EO Group
provides the following:
a. evidence that is acceptable to the Commissioner that
it is licensed or registered in good standing in
another state with equa l or greater requirements than
the requirements of the Oklahoma Professional Employer
Organization Recognition and Registration Act,
b. quarterly financial statements of management for each
calendar quarter as of the most recent audit that
demonstrate continuing financial operations acceptable
to the Commissioner, and
c. the certification of an attorney or an independent
Certified Public Accountant that as of the end of the
most recent calendar quarter, the PEO or PEO Group has
paid all of its state and fed eral payroll taxes,
health and workers’ compensation premiums, and
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contributions to employee retirement plans in a timely
and appropriate manner.
3. For purposes of the Oklahoma Professional Employer
Organization Recognition and Regi stration Act, “assurance
organization” means an independent entity approved by the
Commissioner to certify the qualifications of a P EO or PEO Group for
registration under this section and Section 600.6 of this title and
any related requirements and procedu res. To be considered for
approval as an independent and qualified assurance organization, the
assurance organization shall submit a written request for approval
to the Commissioner. The written request shall include, but not be
limited to, the following :
a. evidence that the assurance organization is
independent and has an established national program
for the accreditation and finan cial assurance of PEOs
and PEO Groups based on requirements similar to the
requirements of the Oklahoma Professional Employe r
Organization Recogni tion and Registration Act, and any
rules promulgated for the implementation of the
Oklahoma Professional Emplo yer Organization
Recognition and Registration Act,
b. evidence that the assurance organizati on has
documented qualifications , standards, procedure s, and
financial assurance acceptable to the Commissioner and
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is licensed or otherwise approved by one or more
states to certify the qualifications of PEOs or PEO
Groups,
c. an agreement to provide info rmation, compliance
monitoring services, and a level o f financial
assurance as deemed acceptable by the Commissioner,
d. an agreement to provide the Commissioner wi th an
application that has been executed by each PEO or PEO
Group requesting alternative reg istration under this
section and Section 600.6 of this title and related
requirements and procedure s in a form approved by the
Commissioner. The application shall:
(1) authorize the assurance organization to share
with the Commissioner any application and
compliance reporting informatio n required under
the Oklahoma Professional Employer Organization
Recognition and Registration Act that has been
provided to the assu rance organization by the PEO
or PEO Group,
(2) authorize the Commissioner to accept informa tion
shared by the assurance org anization for
registration or renewal of registration of the
PEO or PEO Group as if the information was
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provided directly to the Com missioner by the PEO
or PEO Group,
(3) provide the certification of the PEO or PEO Group
that the information provided by th e assurance
organization to the Commissioner is true and
complete and that the PEO or PEO Group is in full
and complete compliance w ith all requirements of
the Oklahoma Professional Employer Organization
Recognition and Regi stration Act, and
(4) provide the certification of the assurance
organization that the PEO or PEO G roup is in
compliance with the standards and procedures of
the assurance organization which are similar to
the requirements of the Oklahoma Professional
Employer Organization Recognition an d
Registration Act and is qualified for
registration or renewal of registration under the
Oklahoma Professional Employer Organizatio n
Recognition and Registration Act,
e. an agreement to provide written notice to the
Commissioner within two (2) business da ys of
determination by the assurance organization of the
failure of a PEO or PEO Group to meet the
qualifications for registration u nder the Oklahoma
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Professional Employer Organization Recognition and
Registration Act or det ermination by the assurance
organization of the failur e of the PEO or PEO Group to
meet the qualifications for accreditation or
certification by the assurance organ ization, and
f. an agreement to share with the Commissioner in a
timely manner the informati on and supporting
documentation provided to the assura nce organization
by the PEO or PEO Group simi lar to the information and
documentation required for registratio n or renewal of
registration under the Oklahoma Professional Employer
Organization Recogniti on and Registration Act.
C. Initial registration.
1. Each PEO or PEO Group operating within this state as of
November 1, 2002, shall complete its initial registra tion not later
than one hundred eighty (180) days after the end of the PEO ’s or PEO
Group’s first fiscal year ending after N ovember 1, 2002.
2. Each PEO or PEO Group not operating within thi s state as of
November 1, 2002, shall complete its initial regist ration prior to
commencement of operations within this state. A registration is
valid for a term of one (1) year.
D. Renewal. 1. A registratio n expires one (1) year following
the registration unless it is renewed pursuant to this subsection.
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Before expiration of the registration, a registrant may renew the
registration for an additional one -year term if the registrant:
a. remains in good standi ng and otherwise is entitled to
be registered pursuant to the Oklahoma Professional
Employer Organization Reco gnition and Registration
Act,
b. files with the Commissioner a renewal application on a
form prescribed by the Commissioner, and
c. pays to the Commissioner a renewal fee as provided for
in Section 600.5 of this title.
2. A registration shall be considere d late thirty (30) days
after the renewal date. Any registration received more than thirty
(30) days after the renewal date shall be accompanied by a late
registration fee of Five Hundred Do llars ($500.00).
E. Group registration. Any two or more PEOs he ld under common
control of any other person or persons acting in concert may be
registered as a PEO Group. A PEO Group may satisfy any reporting
and financial requirements of this registrati on law on a
consolidated basis.
F. Electronic filing and complia nce. A PEO, PEO Group or an
approved independent and qualified assurance organization as
provided for in subsection B of th is section may electro nically
submit filings in conformance with Se ctions 15-101 through 15-121 of
Title 12A of the Oklahoma Statute s. Electronically submitted
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filings include, but are not limited to, applications, document s,
reports, and other filings re quired under the Oklah oma Uniform
Electronic Transactions Act.
G. De minimis exemption.
1. A PEO is exempt from the registration r equirements payable
under the Oklahoma Professional Employer Organization Recognition
and Registration Act if such PEO:
a. submits a properly exec uted request for exemption on a
form provided by the Department,
b. is domiciled outside this state and is lic ensed or
registered as a professional employer organization in
another state that has the sa me or greater
requirements as the Oklahoma Professiona l Employer
Organization Recognition and Regis tration Act,
c. does not maintain an office in this state or soli cit
in any manner clients located or domiciled within this
state, and
d. does not have more than twenty-five covered employe es
employed or domiciled in this state.
2. An exemption of a profe ssional employer organization from
the registration requirements under the Oklahoma Professional
Employer Organization Recognition and Registration Act shall be
valid for one (1) year, subj ect to renewal.
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H. List. The Commissioner shall maintain a list o f
professional employer organizations registered or exempted unde r the
Oklahoma Professional Employer Organization Recognition and
Registration Act and a lis t of approved assurance organiza tions.
I. Forms. The Commissioner may prescribe forms necessary t o
promote the efficient administration of this section.
J. The Commissioner is authorized to promulgate reasonable
rules necessary for the administration an d implementation of this
section.
K. The Commissioner may reject an application for registration,
renewal of registration, or for an exemption from registration if
the Commissioner finds that:
1. The application is not fully completed or properly execute d;
2. Documents required to sup plement the applicatio n are not
included in the application packet or are inadequate;
3. The registration fee is not submitted with the application;
4. The applicant or any person named in the application
misrepresents material in the application;
5. The applicant, or any of its officers, is determined by the
Commissioner to lack good moral character, business integrity, or
financial responsibility; or
6. The controlling person has violated a provision of the
Oklahoma Professional Employer Organization Recognition and
Registration Act.
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SECTION 2. AMENDATORY 40 O.S. 2011, Section 600.6, is
amended to read as follows:
Section 600.6. A. Net worth and bonding. Each PEO shall
maintain either:
1. A minimum net worth of Fifty Thousand Dollars ($50,000.00) ,
as reflected in the financial statements submitted to the
Commissioner with the initial registration and each annual renewal;
or
2. A bond or securities with a minimum market value of Fifty
Thousand Dollars ($50,000.00), held by a depository designated by
the Commissioner, securing payment by the PEO of all taxes, wages,
benefits or other entitlement due to or with respect to a covered
employee, if the PEO does not make such payments when due. Any bo nd
or securities deposited under this subsection shall not be included
for the purpose of calculation of the minimum net wort h required by
this subsection.
B. Payroll tax payments. A PEO shall submit to the
Commissioner, within ninety (90) days after the end of each calendar
quarter, a statement by an attorney or an independent certified
public accountant that all applicable state payroll ta xes for
covered employees located in this state have been paid o n a timely
basis for that quarter.
C. Record confidentiality. All records, reports and other
information obtained from a PEO under the Oklahoma Professional
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Employer Organization Recognition and Registration Act, except to
the extent necessary for the pr oper administration of the Oklahoma
Professional Employer Organization Recognition and Registration Act
by the Department, shall be confidential and shall not be published
or open to public in spection other than to public employees in the
performance of their public duties.
SECTION 3. This act shall become effective November 1, 2021.
58-1-861 NP 12/29/2020 3:09:51 PM