SB 55 — Revises provisions governing the licensing and regulation of employee leasing companies. (BDR 53-317)

(h) A financial statement of the applicant setting forth the financial condition of the [employee leasing company.] professional employer5, organization.the financial statement must include, without limitation:ction (1) For an application for issuance of a [certificate of registration,] license, the most recent audited financial statement that includes the applicant, which must have been completed not more than 13 months before the date of application;

Except as otherwise provided in subsection 5, the financial statement must include, without limitation:

(1) For an application for issuance of a [certificate of registration,] license, the most recent audited financial statement - *SB55_R1* – 6 – that includes the applicant, which must have been completed not more than 13 months before the date of application;

(a)- If81st theSession (2021) – 6 – proprietor.he applicant is a sole proprietorship, by the sole proprietor.(b) If the applicant is a partnership, by each partner.

(b) If the applicant is a partnership, by each partner.

If an insurer cancels [an employee leasing company’s] a professional employer organization’s policy, the insurer shall immediately notify the [Administrator] Labor Commissioner ininll writing.

Except as otherwise provided in subsection 6, [an employee leasing company] a professional employer organization that has not had sufficient operating history to have an audited financial statement based upon at least 12 months of operating history must present financial - *SB55_R1* – 7 – statements reviewed by a certified public accountant covering its entire operating history.

or (b) Be accompanied by a bond, irrevocable letter of credit or securities with a minimum market value equaling the maximum - 81st Session (2021) – 7 – deficiency in working capital for the period covered by the financial statements plus $100,000.

The bond, irrevocable letter of credit or securities must be held by a depository institution designated by the [Administrator] Labor Commissioner to secure payment by the applicantby ofthe allapplicant.taxes, taxes, wages, benefits or other entitlements payable by6. the applicant.

6.

The [employee leasing company] professional employer organization shall give written notice of the employment relationship to each leasedleasedve employee assigned to perform services for the client company.

- *SB55_R1* – 8 – 2.

[An employee leasing company] A professional employer organization shall not offer, sponsor or maintain for its leased - 81st Session (2021) – 8 – employees any self-funded insurance program.

[An employee leasing company] A professional employer organization shall not act as a self-insured employer or be a member of an association of self-insured public or private employers pursuant to chapters 616A to 616D,4.6D,If inclusive,[an oremployee chapterleasing 617company] ofa NRSprofessional oremployer titleorganization 57fails ofto: NRS.

4.

If [an employee leasing company] a professional employer organization fails to:

(a) Confirming that the client company has obtained a policy of workers’ compensation insurance directly from an insurer, and maintains that policy, which covers all of the employees of the client company, including, without limitation, the employees leased from the [employee leasing company,] professional employer organization, subject to the same requirements and conditions as if the client company were the sole employer of the leased employees forfor(b) Confirming that the purposeclient ofcompany providingis coveragea formember workers’of compensation;antion;

(b) Confirming that the client company is a member of an association of self-insured employers which is certified by the Commissioner and which has assumed responsibility, and maintains responsibility, for covering all of the employees of the client company, including, without limitation, the employees leased from the [employee leasing company,] professional employer organization, subject to the same requirements and conditions as if the client company were the sole employer of the leased employees for the purpose of providing coverage for workers’ compensation;

- *SB55_R1* – 9 – (c) Confirming that the client company is certified by the Commissioner as a self-insured employer which self-insures all of the employees of the client company, including, without limitation, the employees leased from the [employee leasing company,] professional employer organization, subject to the same requirements and conditions as if the client company were the sole employer- of81st theSession leased(2021) employees– 9 – coverage for workers’ compensation;r the purpose of providing coverage(d) forObtaining a policy of workers’ compensation;compensation insurance directly from an insurer on a multiple coordinated policy basis, and maintaining that policy, which covers all of the employees leased to the client company or all of the employees leased to the client company and other client companies affiliated with the client company such that:

(d) Obtaining a policy of workers’ compensation insurance directly from an insurer on a multiple coordinated policy basis, and maintaining that policy, which covers all of the employees leased to the client company or all of the employees leased to the client company and other client companies affiliated with the client company such that:

and (3) The [employee leasing company] professional employer organization controls payments and communications related to the policy;pol(e) Obtaining a policy of workers’ compensation insurance on a master policy basis directly from an insurer, and maintaining that policy, which:

or (e) Obtaining a policy of workers’ compensation insurance on a master policy basis directly from an insurer, and maintaining that policy, which:

and (b) If the [employee leasing company] professional employer organization is licensed as a producer of insurance pursuant to NRS 683A.261 and is authorized by the insurer, the [employee leasingleasingNRS company] professional employer organization may negotiate coverage, collect premiums on behalf of the insurer and otherwise act as an intermediary with respect to the policy.

- *SB55_R1* – 10 – 3.

- 81st Session (2021) – 10 – (a) Payroll and claims data for each client company in a manner that identifies both the client company and the [employee leasing company;] professional employer organization;

and (b) The status of coverage with respect to each client company incoverage.ance accordance with any applicable requirements regarding proof of coverage.4.

4.

and (b) In the written agreement with the client company to provide services as [an employee leasing company,] a professional employer organization, clearly set forth the responsibility of the client company to provide coverage for workers’ compensation for all of the employees of the client company, including, without limitation, the employees leased from the [employee leasing company.]com5.ny.If [an employee leasing company] a professional employer organization.organization offers to provide coverage for workers’ compensation for the employees that the [employee leasing company] professional employer organization leases to a client company in accordance with paragraph (d) or (e) of subsection 1:

5.

If [an employee leasing company] a professional employer organization offers to provide coverage for workers’ compensation for the employees that the [employee leasing company] professional employer organization leases to a client company in accordance with paragraph (d) or (e) of subsection 1:

- *SB55_R1* – 11 – (1) Explain that coverage for workers’ compensation does not take effect until the effective date designated by the insurer in the policy of workers’ compensation insurance;

- 81st Session (2021) – 11 – (2) Provide that, while the policy of workers’ compensation insurance is in force, the [employee leasing company] professional employer organization will pay all premiums required by the policy, including, without limitation, any adjustments or assessments,assess(3) andSet willforth bethe entitledprocedures toby which the client company or the [employee leasing company] professional employer organization may terminate the agreement and any refundsfees ofor premiums;costs payable upon termination;

(3) Set forth the procedures by which the client company or the [employee leasing company] professional employer organization may terminate the agreement and any fees or costs payable upon termination;

(7) Provide that the policy of workers’ compensation insurance covers only those employees acknowledged in writing by the [employee leasing company] professional employer organization to be employees of the [employee leasing company] professional employer organization who are being leased to the client(8) Explain that the client company;company is responsible at all times for providing coverage for workers’ compensation for any employees of the client company who are not leased from the [employee leasing company;] professional employer organization;

(8) Explain that the client company is responsible at all times for providing coverage for workers’ compensation for any employees of the client company who are not leased from the [employee leasing company;] professional employer organization;

Nothing in this section prohibits the employees of [an employee leasing company] a professional employer organization who are leased to one or more client companies from being considered as a group for the purposes of any eligibility for - *SB55_R1*81st Session (2021) – 12 – dividends, discounts on premiums, rating arrangements or options or obtaining policies with large deductibles.

The exclusive remedy provided by NRS 616A.020 applies to the [employee leasing company,] professional employer organization, the client company and to all employees of the client company, including, without limitation, the employees leased fromfromnt the [employee leasing company,] professional employer organization, whether the [employee leasing company] professional employer organization or the client company provides the coverage for workers’ compensation.

Such an assurance organization must be independent of the [employee leasing company] professional employer organization and approved by the [Administrator.] Labor Commissioner.

or - 81st Session (2021) – 13 – (c) Requires [an employee leasing company] a professional employer organization to authorize an assurance organization to act on its behalf.

- *SB55_R1* – 13 – 3.

As used in this section, “assurance organization” means a person who meets the qualifications set forth by the [Administrator] Labor Commissioner pursuant to regulations adopted pursuant totorator] subsection 1.

In addition to any other remedy or penalty prescribed by law, the Labor Commissioner may impose against the person an administrative penalty of not more than $5,000 for each such failure.faiSec.

Sec.

(1)- Two81st orSession more(2021) physicians– or14 chiropractors– who are qualified to conduct the examination and who are available pursuant to the terms of the contract, if there are two or more such physicians or chiropractors within 30 miles of the employee’s place of employment;

or - *SB55_R1* – 14 – (2) One or more physicians or chiropractors who are qualified to conduct the examination and who are available pursuant to the terms of the contract, if there are not two or more such physicians or chiropractors within 30 miles of the employee’s place of employment.

(1) Two or more physicians or chiropractors who are qualified to conduct the examination, if there are two or more such physicians or chiropractors within 30 miles of the employee’s place of employment;emp(2) One or more physicians or chiropractors who are qualified to conduct the examination, if there are not two or more such physicians or chiropractors within 30 miles of the employee’s place of employment.

or (2) One or more physicians or chiropractors who are qualified to conduct the examination, if there are not two or more such physicians or chiropractors within 30 miles of the employee’s place of employment.

Further medical attention, except as otherwise provided in NRSNRS5. 616C.265, must be authorized by the insurer.

5.

[An employee leasing company] A professional employer organization must provide to each employee covered under an employee leasing contract instructions on how to notify the [leasing company supervisor and] client company and the employee’s supervisor- at81st theSession professional(2021) employer– organization15 of– an injury in plain, clear language placed in conspicuous type in a specifically labeled area of instructions given to the employee.

Except as otherwise provided in this section, if the Administrator determines that an insurer, organization for managed care, health care provider, third-party administrator, - *SB55_R1* – 15 – employer or [employee leasing company] professional employer organization has:

or (3) Accept less than the compensation found to be due the claimant by a hearing officer, appeals officer, court of competent jurisdiction, written settlement agreement, written stipulation or the Division when carrying out its duties pursuant to chapters 616A to the 617, inclusive, of NRS;

or (3) Later than 10 days after a stay of the decision of a court, hearinghea(d) officer,Refused appealsto officerprocess ora theclaim Divisionfor hascompensation beenpursuant lifted;toed;

(d) Refused to process a claim for compensation pursuant to chapters 616A to 616D, inclusive, or chapter 617 of NRS;

(f)- Failed81st toSession comply(2021) with– the16 Division’s– regulations covering the payment of an assessment relating to the funding of costs ofofring the administration of chapters 616A to 617, inclusive, of NRS;

or - *SB55_R1* – 16 – (i) Intentionally failed to comply with any provision of, or regulation adopted pursuant to, this chapter or chapter 616A, 616B, 616C or 617 of NRS,  the Administrator shall impose an administrative fine of $1,500 for each initial violation, or a fine of $15,000 for a second or subsequent violation.

Except as otherwise provided in chapters 616A to 616D, inclusive, or chapter 617 of NRS, if the Administrator determines that an insurer, organization for managed care, health care provider, third-party administrator, employer or [employee leasing company] professional employer organization has failed to comply with anyany] provision of this chapter or chapter 616A, 616B, 616C or 617 of NRS, or any regulation adopted pursuant thereto, the Administrator may take any of the following actions:

The provisions of this section do not authorize the Administrator to modify or negate in any manner a determination or any portion of a determination made by a hearing officer, appeals officer or court of competent jurisdiction or a provision contained in a written settlement agreement or written stipulation.

- 81st Session (2021) – 17 –  The fine imposed must not be greater than $375 for an initial violation, or more than $3,000 for any second or subsequent violation.

(c) Order a plan of corrective action to be submitted to the Adm3.istIf the Administrator withindetermines 30that daysa afterviolation of any of the dateprovisions of paragraphs (a) to (e), inclusive, (h) or (i) of subsection has occurred, the order.Administrator shall order the insurer, organization for managed care, health care provider, third-party administrator, employer or [employee leasing company] professional employer organization to pay to the claimant a benefit penalty:

3.

If the Administrator determines that a violation of any of the provisions of paragraphs (a) to (e), inclusive, (h) or (i) of subsection 1 has occurred, the Administrator shall order the insurer, organization for managed care, health care provider, third-party administrator, employer or [employee leasing company] - *SB55_R1* – 17 – professional employer organization to pay to the claimant a benefit penalty:

To determine the amount of the benefit penalty, the Administrator shall consider the degree of physical harm suffered by the injured employee or the dependents of the injured employee as a result of the violation of paragraph (a), (b), (c), (d), (e), (h) or (i) of subsection 1, the amount of compensation found to be due the claimant and the number of fines and benefit penalties, other than a benefit penalty described in paragraph (b) of subsection 3, previously imposed against the insurer, organization for managed care, health care provider, third-party administrator, employer or [employee leasing company] professional employer organization pursuantdegree toof thiseconomic section.harm suffered by the injured employee or the the dependents of the injured employee as a result of the violation of paragraph (a), (b), (c), (d), (e), (h) or (i) of subsection 1.

The Administrator shall also consider the degree of economic harm suffered by the injured employee or the dependents of the injured employee as a result of the violation of paragraph (a), (b), (c), (d), (e), (h) or (i) of subsection 1.

Any compensation to which the claimant may otherwise be entitled pursuant to chapters 616A to 616D, inclusive, or chapter 617 of NRS must not be reduced by the amount of any benefit penalty received pursuant to this- subsection.81st Session (2021) – 18 – cases of multiple violations occurring within a certain period ofn time, the Administrator shall adopt regulations which take into consideration:

To determine the amount of the benefit penalty in cases of multiple violations occurring within a certain period of time, the Administrator shall adopt regulations which take into consideration:

- *SB55_R1* – 18 – 5.

In addition to any fine or benefit penalty imposed pursuant to this section, the Administrator may assess against an insurer who violates any regulation concerning the reporting of claims expenditures or premiums received that are used to calculate an assessment an administrative penalty of up to twice the amount of anyany6.ndeIf:id underpaid assessment.

6.

If:

(b) A certificate to act as an association of self-insured public or privatepri(c) employers.A certificate of registration as a third-party administrator.

(c) A certificate of registration as a third-party administrator.

- 81st Session (2021) – 19 – 9.

If the Administrator determines that a vocational rehabilitation counselor has violated the provisions of NRS 616C.543, the Administrator may impose an administrative fine on the vocational rehabilitation counselor of not more than $250 for a first violation, $500 for a second violation and $1,000 for a third or subsequent violation.

for a second violation and $1,000 for a third or 10.

In computing the commerce tax owed by a business entity pursuant to this chapter, the business entity is entitled to deduct from its gross revenue the following amounts, to - *SB55_R1* – 19 – the extent such amounts are included in gross revenue of the business entity:

(d) If the business entity is required to pay a tax on the net proceeds from mineral extraction and royalties subject to the excise tax pursuant to the provisions of NRS 362.100 to 362.240, inclusive, the amount of the gross proceeds used to determine the amount of that tax.

and (3)- Gross81st premiumsSession upon(2021) policies– on20 risks– located in this State received by a factory mutual and amounts deducted from such gross premiums to determine the amount of the tax imposed by NRS 680B.027 upon the factory mutual pursuant to NRS 680B.033.

and - *SB55_R1* – 20 – (3) For the actual cost to the health care provider for any uncompensated care provided by the health care provider, exceptexceptny that if the health care provider later receives payment for all or part of that care, the health care provider must include the amount of the payment in his or her gross receipts for the calendar quarter in which the payment is received.

(l)entity.The The amount of any pass-through revenue of the business entity.(m) The tax basis of securities and loans sold by the business entity, as determined for the purposes of federal income taxation.

(m) The tax basis of securities and loans sold by the business entity, as determined for the purposes of federal income taxation.

(o)- Interest81st incomeSession other(2021) than– interest21 on– credit(p) sales.Dividendsincomandthedistributionsstfromcredcorporations, and distributive or proportionate shares of receipts and income from a pass-through entity.

(p) Dividends and distributions from corporations, and distributive or proportionate shares of receipts and income from a pass-through entity.

(r) Receipts from a hedging transaction, as defined in section 1221 of the Internal Revenue Code, 26 U.S.C.

133 of the Financial Accounting Standards Board, Accounting for Derivative Instruments and Hedging Activities, to the extent the transaction is entered into primarily to protect a financial position, including, without limitation, managing the risk of exposure to foreign currency fluctuations that affect assets, liabilities, profits, losses, equity or investments in foreign operations, to interest rate fluctuationsthis paragraph, receipts from the actual transfer of title of real or tangible personal property to commodityanother pricebusiness fluctuations.entity are not receipts from a hedging transaction or a transaction accorded hedge accounting treatment.

For the purposes of this paragraph, receipts from the actual transfer of title of real or - *SB55_R1* – 21 – tangible personal property to another business entity are not receipts from a hedging transaction or a transaction accorded hedge accounting treatment.

(v) Proceeds received on account of payments from insurance policies, except those proceeds received for the loss of business revenue.rev(w) Damages received as a result of litigation in excess of amounts that, if received without litigation, would not have been included in the gross receipts of the business entity pursuant to this section.

(w) Damages received as a result of litigation in excess of amounts that, if received without litigation, would not have been included in the gross receipts of the business entity pursuant to this section.

(z)- Amounts81st realizedSession from(2021) the– sale22 of– an account receivable to the extent the receipts from the underlying transaction were included in the gross receipts of the business entity.

(1)(2) A medicalpharmacy facility as defined in NRS 449.0151;639.012.449.0151;

and (2)[(e)] A(d) pharmacy“Health ascare definedprovider” means a business that receives any payments listed in NRSparagraph 639.012.(i) of subsection 1 as a provider of health care services, including, without limitation, mental health care services.

[(e)][(f)] (d)(e) “Health“Medicaid” care provider” means athe businessprogram thatestablished receivespursuant anyto paymentsTitle listedXIX in paragraph (i) of subsectionthe 1Social asSecurity aAct, provider42 ofU.S.C. health care services, including, without limitation, mental health care services.

- *SB55_R1* – 22 – [(f)] (e) “Medicaid” means the program established pursuant to Title XIX of the Social Security Act, 42 U.S.C.

Chapter 689C of NRS is hereby amended by adding theretothe“Professional aemployer neworganization” sectionhas the meaning ascribed to readit asin follows:NRS 616B.670.

“Professional employer organization” has the meaning ascribed to it in NRS 616B.670.

689C.015 Except as otherwise provided in this chapter, as used in this chapter, unless the context otherwise requires, the words and terms defined in NRS 689C.017 to 689C.106, inclusive, and section 11 of this act have the meanings ascribed to them in those sections.

- 81st Session (2021) – 23 – Sec.

The term includes a sole proprietor, a partner of a partnership or an employee of [an employee leasing company,] a professional employer organization, if the sole proprietor, partner or employee of the [employee leasing company] professional employer organization is included as an employee under a health benefit plan of a small employer.

Is the holder of a valid certificate of registration issued pursuant to NRS 616B.673, and who is otherwise qualified to hold such a certificate of registration on that date, shall be deemed to -hold *SB55_R1*a –license 23issued –pursuant holdto that section, as amended by section o2.thHas submitted an application for a licensecertificate issuedof registration pursuant to NRS 616B.676 shall be deemed to have submitted an application for a license pursuant to that section, as amended by section 23 of this act.

2.

Has submitted an application for a certificate of registration pursuant to NRS 616B.676 shall be deemed to have submitted an application for a license pursuant to that section, as amended by section 3 of this act.

Any contracts or other agreements entered into by an officer or agency whose name has been changed or whose responsibilities have been transferred pursuant to the provisions of this act to another officer or agency are binding upon the officer or agency to which the responsibility for the administration of the provisions of - 81st Session (2021) – 24 – the contract or other agreement has been transferred.

1.Revised Statutes:ing the reprint and supplements to the Nevada (a) Appropriately change any references to an officer, agency or other entity whose name is changed or whose responsibilities are transferred pursuant to the provisions of this act to refer to the appropriate officer, agency or other entity.

In preparing the reprint and supplements to the Nevada Revised Statutes:

(a) Appropriately change any references to an officer, agency or other entity whose name is changed or whose responsibilities are transferred pursuant to the provisions of this act to refer to the appropriate officer, agency or other entity.

- *SB55_R1* – 24 – (b) Substitute appropriately the term “professional employer organization” for the term “employee leasing company” in the regulations described in section 17 of this act.

TEXT~~~~~ OF21 REPEALED- SECTION81st “EmployeeSession leasing(2021) company” has the meaning ascribed to it inned.

NRS 616B.670.

H - *SB55_R1*