Section 933.301 - Duties and contractual relationship(a) Allocation of rights, duties and obligations.--Except as specifically provided in this act, nothing in this act shall be deemed to affect or alter any provision of Pennsylvania law. Specifically: (1)The client shall be entitled to exercise all rights, and shall be obligated to perform all duties and responsibilities, otherwise applicable to an employer in an employment relationship.(2)The PEO shall be entitled to exercise only those rights, and obligated to perform only those duties and responsibilities, specifically required by this act or set forth in the professional employer agreement. The rights, duties and obligations of the PEO as coemployer with respect to any covered employee shall be limited to those arising pursuant to the professional employer agreement and this act during the term of coemployment by the PEO of the covered employee. (3)Unless otherwise expressly agreed by the PEO and the client in a professional employer agreement, the client retains the exclusive right to direct and control the covered employees as is necessary to conduct the client's business, to discharge any of client's fiduciary responsibilities or to comply with any licensure requirements applicable to the client or to the covered employees. (b)Contractual relationship.--Except as provided by law, the coemployment relationship between the client and the PEO and between each coemployer and each covered employee shall be governed by the professional employer agreement. The PEO shall ensure that each professional employer agreement is reduced to writing and signed by both the client and the PEO, and each professional employer agreement shall provide:(1)The allocation of rights, duties and obligations as described in subsection (a). (2)That the PEO shall have responsibility to pay wages to covered employees; to withhold, collect, report and remit payroll-related taxes and may remit unemployment taxes in accordance with section 304; and, to the extent the PEO has assumed responsibility in the professional employer agreement, to make payments for employee benefits for covered employees. As used in this paragraph, the term "wages" does not include any obligation between a client and a covered employee for payments beyond or in addition to the covered employee's salary, draw or regular rate of pay, such as bonuses, commissions, severance pay, deferred compensation, profit sharing or vacation, sick or other paid time off pay, unless the PEO has expressly agreed to assume liability for these payments in the professional employer agreement. (3)Nothing in this act or in a professional employer agreement shall relieve a client from compliance with the Commonwealth's wage and labor laws, including the act of May 13, 1915 (P.L. 286, No. 177), known as the Child Labor Law, the act of August 15, 1961 (P.L. 987, No. 442), known as the Pennsylvania Prevailing Wage Act, the act of July 14, 1961 (P.L. 637, No. 329), known as the Wage Payment and Collection Law, and the act of January 17, 1968 (P.L. 11, No. 5), known as The Minimum Wage Act of 1968. If the client is a health care facility as defined in section 2 of the act of October 9, 2008 (P.L. 1376, No. 102), known as the Prohibition of Excessive Overtime in Health Care Act, the client shall comply with that act. No professional employer organization shall knowingly engage in or assist in the violation of the statutes referenced in this paragraph. (4)That the PEO shall have a right to hire, discipline and terminate a covered employee as may be necessary to fulfill the PEO's responsibilities under this act and the professional employer agreement. The client shall have a right to hire, discipline and terminate a covered employee. (5)The PEO or the client has the responsibility to provide workers' compensation coverage for covered employees, in compliance with section 303, which responsibility shall be specifically allocated in the professional employer agreement to either the client or the PEO in accordance with section 303(a). (c)Notice to terminate.--With respect to each professional employer agreement entered into by the PEO, the PEO shall provide the procedures by which the client or PEO may terminate the professional employer agreement, including any fees or costs payable upon termination, and except as otherwise expressly provided or required by law, all services provided by the PEO to the client shall cease immediately as of the effective date of the termination. (d)Notice to covered employees and clients.--(1) With respect to each professional employer agreement entered into by a PEO, the PEO shall provide written notice to each covered employee affected by the agreement of the general nature of the coemployment relationship between and among the PEO, the client and the covered employee.(2)) If the PEO is providing benefits to covered employees pursuant to a PEO sponsored welfare benefit plan, the PEO shall provide specific notice to the client as to services provided by the PEO concerning those benefits. These responsibilities include those related to administration, which includes Consolidated Omnibus Budget Reconciliation Act (COBRA) administration, plan administration, enrollment and renewal services pursuant to their professional employer agreement. The notice may be contained in the professional employer agreement or in a separate notice. (e)Specific responsibilities.--Except to the extent otherwise expressly provided by the applicable professional employer agreement: (1)A client shall be solely responsible for the quality, adequacy or safety of the goods or services produced or sold in client's business. (2)A client shall be solely responsible for directing, supervising, training and controlling the work of the covered employees with respect to the business activities of the client and solely responsible for the acts, errors or omissions of the covered employees with regard to these activities. (3)A client shall not be liable for the acts, errors or omissions of a PEO or of any covered employee of the client and a PEO when the covered employee is acting under the express direction and control of the PEO. (4) A PEO shall not be liable for the acts, errors or omissions of a client or of any covered employee of the client when the covered employee is acting under the express direction and control of the client.(5)Nothing in this subsection shall serve to limit any contractual liability or obligation specifically provided in the written professional employer agreement.(6) A covered employee is not, solely as the result of being a covered employee of a PEO, an employee of the PEO for purposes of general liability insurance, fidelity bonds, surety bonds, employer's liability which is not covered by workers' compensation or liquor liability insurance carried by the PEO unless the covered employee is included by specific reference in the professional employer agreement and applicable prearranged employment contract, insurance contract or bond. (f)Professional employer services not insurance.--A PEO under this act is not engaged in the sale of insurance or in acting as a third party administrator by offering, marketing, selling, administering or providing professional employer services which include services and employee benefit plans for covered employees. (g)Taxation.--(1)Covered employees whose services are subject to sales tax shall be deemed the employees of the client for purposes of collecting and levying sales tax on the services performed by the covered employee. Nothing contained in this act shall relieve a client of any sales tax liability with respect to its goods or services. (2)Any tax upon professional employer services or any business license or other fee which is based upon gross receipts shall be limited to the administrative fee of the PEO. (3) Any tax assessed on a per capita or per employee basis shall be assessed against the client for covered employees and against the PEO for its employees who are not covered employees coemployed with a client. (4)In the case of tax imposed or calculated upon the basis of total payroll, the PEO shall be eligible to apply any small business allowance or exemption available to the client for the covered employees for purpose of computing the tax.Added by P.L. 946 2012 No. 102, § 301, eff. 1/1/2013.