N.J. Admin. Code § 12:16-24.4

Current through Register Vol. 56, No. 21, November 4, 2024

Section 12:16-24.4 - Financial security requirements

(a) An employee leasing company or professional employer organization shall submit a financial statement to the Commissioner or his or her designee with the initial registration on or before the dates detailed in 12:16-24.3(a)3 and, following initial registration, shall submit a financial statement to the Commissioner or his or her designee on an annual basis in the manner set forth within (a)2, 3, 4, and 5 below.

1. Every initial registration shall be accompanied by a financial statement prepared within 13 months of the application, which statement shall show a positive working capital, computed as current assets minus current liabilities.

2. Following initial registration, an employee leasing company shall file with the Commissioner or his or her designee on an annual basis, within 180 days of the end of the employee leasing company's fiscal year, a current financial statement, which statement shall show a positive working capital, computed as current assets minus current liabilities.

3. The financial statement filed under either (a)1 or 2 above shall be without qualification as to the going concern status of the employee leasing company.

4. Regarding the filing requirement under (a)2 above, an employee leasing company may request that the Commissioner or his or her designee grant an extension of the filing deadline, which request shall be accompanied by a letter from the employee leasing company's independent certified public accountant stating the reasons for the request and the anticipated date of the completion of the financial statement.

5. The Commissioner or his or her designee may for good cause shown grant a request for extension filed under (a)4 above.

(b) An employee leasing company or professional employer organization that, upon initial registration or, as required under (a)2 above, on an annual basis, fails to establish that it has a positive working capital, shall provide to the Commissioner or his or her designee a bond, irrevocable letter of credit, or securities with a minimum market value equaling the amount necessary to achieve a positive working capital plus up to $ 100,000, such additional amount to be determined by the Commissioner or his or her designee on a case-by-case basis.

1. The Commissioner or his or her designee may make a periodic review of the adequacy of the security furnished by the employee leasing company or professional employer organization to determine if any adjustment may be necessary.

2. The Commissioner or his or her designee may sell the securities so deposited to the extent necessary to satisfy any unpaid unemployment and/or disability taxes, interest, penalties and/or assessments or any wages, benefits or other entitlement due a covered employee. The employee leasing company or professional employer organization will be notified of the sale of such securities and the amount used.

3. The Commissioner or his or her designee may also require the bond, irrevocable letter of credit, or securities described in (b) above if he or she finds that the employee leasing company or professional employer organization has had its license or registration suspended, denied, or limited in any other jurisdiction; or that there have been instances in which the employee leasing company has not paid covered employees' wages or benefits when due, or failed to make timely payment of any Federal or State payroll taxes or unemployment and/or disability contributions when due, or for other good cause.

4. An employee leasing company or professional employer organization that has had its security reduced to satisfy any unemployment and/or disability taxes, interest, penalties, and/or assessments or any wages, benefits, or other entitlement due a covered employee, and has not had its registration rescinded, shall file with the Commissioner or his or her designee an additional bond, irrevocable letter of credit, or securities, which when combined with any unused portion of the prior bond, irrevocable letter of credit, or securities will have a current market value equaling the amount necessary to achieve a positive working capital plus up to $ 100,000, such additional amount to be determined by the Commissioner or his or her designee. Such additional bond, irrevocable letter of credit, or securities must be received no later than 60 days after the notification of sale of such securities as set forth in (b)2 above.

5. The Commissioner or his or her designee may extend for good cause the date for complying with the security requirement for a period of up to 30 days beyond the original due date.

N.J. Admin. Code § 12:16-24.4

Amended by R.2013 d.101, effective 8/19/2013.
See: 44 N.J.R. 1951(a), 45 N.J.R. 1960(c).
Rewrote the section.