STATE LAW ADDENDUM OF CUSTOMER SERVICES AGREEMENT

Last updated July 28, 2023

This State Addendum (“Addendum”) to the Nextep Customer Service Agreement modifies the Customer Service Agreement (“Agreement”) entered into between Nextep and Customer (together “the Parties”) is applicable to Worksite Employees located in the states listed below. In the event of any conflict between the Agreement and this Addendum, this Addendum shall control for Worksite Employees located in the states listed below and all other terms of the Agreement remain in full force and effect. If at any time state law changes establishing requirements different from the terms contained in this Addendum, Customer and Nextep agree that they will apply the terms in effect according to state law. Notwithstanding this Addendum, Customer agrees and understands that it is permitted to have Worksite Employees providing services only in those states approved by Nextep.

 

ALABAMA

As provided by Alabama Statute §25-14-9 of the Alabama Professional Employer Organization Registration Act, Nextep: a) Reserves a right of direction and control over Worksite Employees and will exercise that right in the context of the need to do so according to the terms of the Agreement; provided that Customer retains such sufficient direction and control as is necessary to conduct the Customer’s business, and, without which, Customer would be unable to conduct its business, discharge any fiduciary responsibilities; or comply with any applicable licensure, regulatory, or statutory requirements; b) Along with Customer, both have a right to hire, discipline and terminate Worksite Employees subject to the terms of any applicable collective bargaining agreement, if one exists;  c) Assumes responsibility to pay wages, withhold, collect, report, and remit payroll related and unemployment taxes to the extent Customer has funded the obligations; provided “wages” does not include any obligation between Customer and a Worksite Employee for payments beyond or in addition to the Worksite 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 Nextep has expressly agreed to assume liability for such payments in this Agreement; and d) Assumes responsibility, to the extent Nextep has assumed responsibility in the Agreement, to make payments for employee benefits for Worksite Employees. The responsibility to obtain workers’ compensation coverage for Worksite Employees from a carrier licensed to do business in Alabama shall be the responsibility as defined in the Agreement.; if the responsibility is allocated to Nextep, then Nextep agrees to maintain and provide to Customer at the termination of the Agreement if requested by Customer, records regarding the loss experience related to workers’ compensation insurance provided to Worksite Employees. Nextep will provide employees with a written notice of the general description of the relationship between Nextep and Customer. As a professional employer organization, Nextep is regulated by the Alabama Department of Industrial Relations, PEO Division, 649 Monroe Street, Montgomery, Alabama 36131; (800) 528-5166, and any questions or complaints should be directed to this Department.

 

ARIZONA

Customer warrants that it has not engaged in any practices in violation of the Legal Arizona Workers Act (“LAWA”), has never been found to have violated LAWA, and has maintained properly completed Form I-9s for their employees as required by the Immigration Reform and Control Act of 1986.  For employees hired in Arizona after December 31, 2007, Customer warrants that it has verified the employees’ work authorization with the federal E-Verify program and has kept the E-Verify case resolutions. Furthermore, Customer agrees that during the Term of the Agreement and this Addendum, Customer shall be solely responsible for all legal responsibilities under the LAWA, including but not limited to verifying any new hires’ authorization to work through the E-Verify system. Customer agrees to defend and hold Nextep harmless from any violation of the LAWA or failure to properly verify an employee’s authorization to work through the E-Verify system.  Customer expressly agrees to indemnify, defend and hold Nextep harmless from any and all claims or liabilities which may arise as a result of Customer’s violation of the LAWA.

 

ARKANSAS

As provided by the Arkansas Professional Employer Organization Recognition and Licensing Act, Section 23-92-409 Customer is entitled and obligated to exercise and perform all duties and responsibilities otherwise applicable to an employer in an employment relationship irrespective of the co-employment relationship created by the Agreement.

As provided by Arkansas Professional Employer Organization Recognition and Licensing Act, Section 23-92-409 Nextep: a) Reserves a right of direction and control over Worksite Employees; provided that Customer retains the right to exercise such direction and control over Worksite Employees as is necessary to conduct Customer’s business, discharge any fiduciary responsibility which it may have, or comply with any applicable licensing requirements; b) Pays wages and salaries to Worksite Employees; c) Withholds, collects, reports and remits payroll related employment taxes for Worksite Employees; d) To the extent Nextep has assumed responsibility in the Agreement, makes payments for Nextep sponsored employee benefits; and e) Agrees that Customer retains the authority to hire, terminate and discipline Worksite Employees.

As provided by Arkansas Professional Employer Organization Recognition and Licensing Act, Section 23-92-409(c) (4), Nextep shall be responsible for obtaining workers’ compensation coverage for Worksite Employees from a carrier licensed to do business in Arkansas.  Nextep shall maintain records regarding the premium and loss experience related to workers’ compensation insurance provided to Worksite Employees under the Agreement.  If requested by Customer at or after the termination of this Agreement, Nextep shall provide the records maintained to the Customer.  If Nextep is unable to provide the requested information, the insurance carrier that provided the coverage for the Worksite Employee shall provide it. 

Upon request during the time period that this Agreement is in effect and for a period of ninety (90) days after termination of this Agreement, Customer is entitled to receive records from Nextep regarding payroll, workers’ compensation coverage, losses and claims, and employee benefits provided under this Agreement. Nextep may charge a reasonable fee for the cost of reproducing the information requested by Customer. This disclosure requirement does not require the disclosure of information to a Customer or a former Customer concerning another client or former client of Nextep.  The information shall be provided within 30 days’ of receipt of the request by Customer.

As provided by Arkansas Professional Employer Organization Recognition and Licensing Act, Section 23-92-411(a) (3) Customer shall ensure, with the assistance of a licensed insurance producer, that any subcontractor of Customer has workers’ compensation coverage as required by law. 

Nextep shall provide written notice of the general nature of the Agreement between Nextep and Customer and the co-employment relationship to Worksite Employees.

 

CALIFORNIA

Customer agrees to comply with all California statutes regarding legally required leaves, including but not limited to time off for voting, time off to serve as a witness or juror in a legal proceeding, time off for school visits, and military service. Customer will provide the Company with adequate notice regarding its desire to terminate the employment of any Worksite Employee in order to ensure that the employee is paid all compensation to which he or she is entitled, including wages, vacation or any other accrued compensation, on the last day of the employee’s employment, as required by California law. Pursuant to California Labor Code Section 2810.3(a)(3)(D), Customer assumes all civil legal responsibility and civil liability for payment of wages and workers’ compensation coverage for Worksite Employees in California. Pursuant to federal and state law, Customer’s workplace must continue to comply with all regulatory aspects of doing business which applied to Customer before execution of this Agreement, including without limitation, the obligations to provide at its expense and ensure use of all personal protective equipment, maintain a safe and accessible workplace under OSHA and Cal/OSHA and all related and similar state regulatory requirements. Customer agrees to comply at its expense with all safety and health laws, regulations or rules, whether federal, state or local, including all Cal/OSHA standards under Title 8 of the California Code of Regulations. Customer shall also be solely responsible for ensuring compliance with safe work practices and use of protective equipment and devices imposed by controlling federal, state or local law, and for implementing and maintaining a written effective Injury and Illness Prevention Program and any other safety programs required by Cal/OSHA regulations. Customer agrees to train and be solely responsible for ongoing training of Worksite Employees to allow them to safely perform their duties, including but not limited to hazard recognition, exposure prevention and safe work practices under Cal/OSHA regulations. Customer is also responsible for informing Worksite Employees that if they are assigned work they reasonably believe to be dangerous, they may refuse to do the work. Customer is responsible for recordkeeping requirements under Cal/OSHA regulations related to work-related fatalities, injuries, and illnesses of Worksite Employees. As the result of Customer having full supervisory control over Worksite Employees, Customer is responsible for maintaining injury and illness records as required under Cal/OSHA, Title 8, California Code of Regulations. Customer expressly absolves Nextep of responsibility for control over the day-to-day job duties of the Worksite Employees and over the job site at which, or from which, Worksite Employees perform their services. Customer is responsible for complying with posting and notice requirements under California law, including but not limited to the Wage Theft Protection Act notices, EDD-mandated unemployment and disability insurance notices, expense reimbursement, and new hire workers’ compensation insurance-related notices. Customer is responsible for ensuring compliance with California meal period, rest break, heat-related break, seating, split shift, and minimum reporting time pay requirements.

CCPA and CPRA. This subsection shall apply solely to the extent that (i) Nextep functions as a “service provider,” as that term is defined under the California Consumer Privacy Act of 2018 and California Privacy Rights Act of 2020, as amended (collectively, the “CCPA”), and (ii) the  Agreement requires that Nextep access, create, collect, process, retain, or disclose personal information of consumers, as defined under the CCPA.

1. Definitions. Terms defined in the CCPA, including without limitation personal information and business purposes, carry the same meaning in this subsection. “Contracted Business Purposes” means the Services described in the Agreement, including without limitation Schedule A. “Authorized Persons” means the persons or categories of persons that authorize Customer to provide or permit Nextep to access personal information for processing in accordance with their instructions.
2. Nextep’s CCPA Obligations
   • Nextep will only collect, use, retain, or disclose personal information collected pursuant to the Agreement as reasonably necessary and proportionate to achieve the Contracted Business Purposes for which Customer provides or permits personal information access in accordance with the Customer’s instructions from Authorized Persons, and as permitted under the Agreement or as required by law. For example, and without limitation, Nextep may make internal use of personal information to build or improve the quality of its services, provided such use is not to perform services on behalf of another person. Nextep will not be obligated to follow instructions from any persons at the Customer other than Authorized Persons.
   • Nextep will not collect, use, retain, disclose, or otherwise make personal information collected pursuant to the Agreement available for Nextep’s own commercial purposes, outside of the Contracted Business Purposes, or in a way that does not comply with the CCPA, nor will it sell or share personal information belonging to Customer. If a law requires Nextep to disclose personal information collected pursuant to the Agreement for a purpose unrelated to the Contracted Business Purposes, Nextep must first inform the Customer of the legal requirement and give the Customer a reasonable opportunity to object or challenge the requirement, unless the law prohibits such notice. In the event, Customer fails to respond promptly, and Nextep determines, in its sole discretion, such disclosure is required by law, Nextep may make the disclosure and shall not be liable therefor in any way under the Agreement or this subsection of the Addendum.
   • Nextep may not combine personal information collected pursuant to the Agreement with personal information that it receives from or on behalf of another person or persons or that Nextep may collect from its own interaction with the Customer, except as otherwise permitted under the CCPA.
   • Nextep will promptly comply with any reasonable Customer request or instruction from Authorized Persons requiring Nextep to provide, amend, limit, transfer, or delete the personal information collected pursuant to the Agreement or to stop, mitigate, or remedy any unauthorized processing of personal information collected pursuant to the Agreement, except where otherwise required; provided, however, that the obligations in this paragraph shall (i) extend only to requests made by consumers or those authorized to act on behalf of consumers under the CCPA, and (ii) in the case of deletion of personal information collected pursuant to the Agreement, apply only to the extent the deletion is not impossible or involves disproportionate effort. Nextep reserves the right to charge Customer its then current fees for responding to such requests or instructions. The obligations in this paragraph are subject to the nature of the processing and information available to Nextep.
   • If the Contracted Business Purposes require the collection of personal information directly from consumers on the Customer’s behalf, Nextep will provide a CCPA-compliant notice at collection (described under CCPA Sec. 1798.100) addressing categories of personal information collected and the purpose(s) of their use or collection that the Customer specifically pre-approves in writing. Nextep will not modify or alter the notice in any way without the Customer’s prior written consent.
   • Nextep will maintain reasonable and appropriate technical and organizational measures to protect personal information collected pursuant to the Agreement.
3. Assistance with Customer’s CCPA Obligations
   • To the extent related to the Contracted Business Purposes, Nextep will reasonably cooperate and assist Customer with meeting the Customer’s CCPA compliance obligations and responding to verifiable consumer requests as required under the CCPA with respect to personal information collected pursuant to the Agreement, taking into account the nature of Nextep’s processing and the information available to Nextep. Notwithstanding any provision of the Agreement to the contrary, with respect to personal information collected pursuant to the Agreement, Nextep will not be required to comply with a request submitted directly to Nextep by a consumer but shall promptly inform Customer of the request and reasonably cooperate with Customer as required under this Agreement and the CCPA.
   • To the extent required by the CCPA, Nextep will permit Customer to take reasonable and appropriate steps to ensure Nextep uses personal information collected pursuant to the Agreement in a manner consistent with Customer’s obligations under the applicable provisions of the CCPA.
   • Nextep must notify Customer promptly if it receives any complaint, notice, or communication that directly or indirectly relates to either party’s compliance with the CCPA with respect to personal information collected pursuant to the Agreement or if Nextep determines it cannot meet its obligations under the applicable provisions of the CCPA.
   • Nextep will permit Customer, upon thirty (30) days advance written notice, to take reasonable and appropriate steps to stop and remediate the use of personal information collected pursuant to the Agreement that is unauthorized under the CCPA and this subsection of the Addendum.
4. Subcontracting
   • Nextep may use subcontractors to provide the Contracted Business Services. Any subcontractor used must qualify as a service provider under the CCPA to the extent any such subcontractor would be required to collect, use, maintain, or disclose personal information collected pursuant to the Agreement, and Nextep may not make any disclosures of personal information collected pursuant to the Agreement to the subcontractor that the CCPA would treat as a sale or sharing of personal information.
   • Nextep will notify Customer in the event it engages any other person to assist Nextep in processing personal information collected pursuant to the Agreement for a business purpose on behalf of the Customer, and in such case, the engagement shall be pursuant to a written contract that includes the applicable obligations covered in this subsection of the Addendum, to the extent required by the CCPA.
5.  General
   • Nothing in this subsection of the Addendum, whether expressed or implied, is intended to confer any rights or remedies under or by reason of same on any persons, including consumer, other than the parties to it and their respective successors and permitted assigns, nor shall any provisions give any third parties any right of subrogation or action against any party to the Agreement.
   • Both parties will comply with all applicable requirements of the CCPA when collecting, using, retaining, or disclosing personal information collected pursuant to the Agreement, including providing the same level of privacy protections required thereunder.
   • Nextep understands this subsection of the Addendum and the CCPA’s restrictions and prohibitions on selling or sharing personal information collected pursuant to the Agreement and retaining, using, or disclosing personal information collected pursuant to the Agreement outside of the Parties’ direct business relationship, and it will comply with them.

For avoidance of doubt, this subsection of the Addendum applies only to the extent required under the CCPA and as noted above. For example, and without limitation, this subsection of the Addendum does not apply to personal information that is collected, processed, sold, or disclosed pursuant to the federal Gramm-Leach-Bliley Act (Public Law 106-102) and implementing regulations or the California Financial Information Privacy Act (Division 1.4 (commencing with Section 4050) of the Financial Code). This subsection of the Addendum also does not apply to any protected health information that is collected, processed, sold, or disclosed pursuant to the federal Health Insurance Portability and Accountability Act and implementing regulations.

 

COLORADO

As provided by Colorado Revised Statute Section 8-70-114, Nextep shall have the following rights and responsibilities:

1. To assign Worksite Employees to the Customer’s location;
2. Retain the right to set Worksite Employee’s rate of pay;
3. Retain the right to pay Worksite Employees from its own account;
4. Retain the right to direct and control Worksite Employees which is shared with Customer pursuant to the Agreement; provided that Customer retains the right to exercise such direction and control over Worksite Employees as is necessary to conduct Customer’s business, discharge any fiduciary responsibility which it may have, or comply with any applicable licensing requirements;
5. Discharge, reassign, or hire Worksite Employees to perform services for Customer and Nextep;
6. Retain the responsibility for the payment of Worksite Employee’s wages pursuant to the Agreement and collect, withhold, report, and pay all Worksite Employee payroll-related taxes from its own account and payment of Nextep-sponsored employee benefit plans pursuant to the Agreement;
7. Payment of unemployment compensation insurance premiums for Worksite Employees as required by Colorado law in relation to which Nextep confirms that it has notified the Colorado Division of Unemployment Insurance of Nextep’s election to report and pay unemployment insurance premiums for Worksite Employees under its own unemployment accounts and premium rates;
8. Provide, maintain, and secure all records and documents required under Colorado unemployment insurance laws;
9. Provide workers’ compensation insurance as required by Colorado law;
10. Retain the right to provide for the health, welfare, and benefit of Worksite Employees through such programs as professional guidance, including, but not limited to, employment training, safety, and compliance matters;
11. Nextep may aggregate all employees for purposes of sponsoring and administering workers’ compensation plans and fully insured health plans, employee pension plans and is entitled to sponsor fully insured employer plans and offer employee benefits to the full extent afforded employers by law; and
12. Maintain Worksite Employee records.

Nextep and Customer shall share the responsibility for addressing complaints, claims or requests related to employment, except as otherwise provided pursuant to an existing collective bargaining agreement. Customer shall retain responsibility for the policies and procedures related to the actual conduct of the work that leads to the Customer’s conduct of its business and the production of its goods and services Nextep intends to retain the right to maintain the employment relationship with Worksite Employees on a long-term basis, and not a temporary basis, and shall notify Worksite Employees of the co-employment relationship created by this Agreement and Addendum.

 

CONNECTICUT

As provided in Connecticut General Statute Section 31-221a-h, Nextep: a) Enters into a co-employment relationship with Worksite Employees; b) Pays Worksite Employees’ wages; provided wages do not include obligations between Customer and a Worksite Employee that exceed a Worksite Employee’s salary, bonuses, commissions, severance pay, deferred compensation, profit sharing or vacation, sick or other paid time off pay unless Nextep expressly agrees to assume liability for the additional obligations in the Agreement; c) Withholds, collects, reports and remits payroll-related and unemployment taxes; and d) Makes payments for employee benefits for Worksite Employees, as provided for in the Agreement. Nextep shall provide Worksite Employees written notice of the co-employment relationship and a written summary of the obligations and responsibilities of Nextep and Customer pursuant to the Agreement.

 

FLORIDA

As provided by the Florida Employee Leasing Statute Section 468.525, Nextep: a) Reserves a right of direction and control over Worksite Employees; provided that the Customer retains such sufficient direction and control as is necessary to conduct the Customer’s business, discharge any fiduciary responsibilities; and comply with any applicable licensure, regulatory, or statutory requirements; b) Assumes responsibility for the payment of Worksite Employee wages without regard to payment by Customer; provided “wages” does not include any obligation between Customer and a Worksite Employee for payments beyond or in addition to the Worksite 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 Nextep has expressly agreed to assume liability for such payments in this Agreement; c) Assumes full responsibility for the payment and collection of payroll taxes for Worksite Employees on payroll that is reported to and paid by Nextep; d) Retains the authority to hire, terminate, discipline and reassign Worksite Employees; provided Customer retains the right to accept or cancel the assignment of any Worksite Employees; e) Retains a right of direction and control over the management of safety, risk and hazard control at the work site including responsibility for performing safety inspections of Customer equipment and premises, responsibility for the promulgation and administration of employment and safety policies, and responsibility for providing workers’ compensation coverage and the management of workers’ compensation claims, claims filings, and related procedures. Nextep shall provide written notice of the relationship between Nextep and Customer to Employees.

Pursuant to Florida Regulations Section 61G7-12.001, Customer shall permit Nextep or its assigns to conduct an annual onsite physical examination of the Customer to confirm proper workers’ compensation classification of Worksite Employees and to aid in the determination of payroll amounts paid to Worksite Employees.

Customer shall be responsible for the day-to-day supervision and control of Worksite Employees with respect to products or services offered by Customer and Nextep shall have no responsibility with regard to Worksite Employee’s performance of day-to-day job duties. Customer expressly absolves Nextep of control over the day-to-day job duties of Worksite Employees and over the job site at which, or from which, Worksite Employees perform their services; such control is assigned to Customer pursuant to Title XLV, Chapter  768.098 Florida Statutes (or any successor provision, as they may be amended from time to time). This Agreement in no way alters any responsibilities of Customer which arise from Section 768.096, Florida Statutes and Customer assumes all responsibilities pursuant to Section 768.096 including, without limitation, responsibility to perform any and all work history, reference checks and background checks in respect of the Worksite Employees. Upon becoming known by Customer, Customer shall immediately provide Nextep with written notice of the assertion of any and all claims, complaints, charges, allegations or incidents of tortious misconduct or workplace safety violations.

Customer understands that pursuant to Florida law, it may not enter into an employee leasing relationship with Nextep if Customer owes a current or prior employee leasing company any money pursuant to any service agreement which existed between that current or prior employee leasing company and Customer, or if Customer owes a current or prior insurer any premium for workers’ compensation insurance. Customer hereby represents and warrants to Nextep that it has met any and all prior premium and fee obligations with regard to workers’ compensation premiums and employee leasing payments.

Customer understands and agrees that Customer is primarily responsible for the employment verification obligations pursuant to Florida SB 1718 which includes amendments to Florida Statute sections 448.09 and 448.095, for all current and newly hired Worksite Employees. Customer absolves Nextep of any responsibility for such employment verification obligations and will defend and indemnify Nextep for any violations.

Under penalties of perjury, I declare that I have read the foregoing Addendum and that the facts stated in Section 5 thereof are true. Additionally, the foregoing Agreement is agreed to.

 

IDAHO

As provided by the Idaho Professional Employer Recognition Act Section 44-2401, during the Term of the Agreement, Nextep: a) Reserves a right of direction and control over Worksite Employees; provided that Customer retains such sufficient direction and control as is necessary to conduct the Customer’s business, discharge any fiduciary responsibilities; and comply with any applicable licensing requirements; b) Assumes responsibility for the withholding and remittance of payroll-related taxes from Nextep’s account; c) Assumes responsibility for the payment of Nextep sponsored Worksite Employee benefits from its own accounts; and d) Retains authority to hire, terminate, discipline and reassign Worksite Employees; provided Customer retains the right to accept or cancel the assignment of any Worksite Employees. Nextep shall provide written notice of the relationship between Nextep and Customer to Worksite Employees.

 

ILLINOIS

Nextep has contracted with Customer to supply or assume responsibility for personnel management of one or more workers who perform services for Customer on an ongoing basis rather than under a temporary help arrangement. As provided in Illinois Unemployment Insurance Act, 820 ILCS 405/206.1, Nextep: a) Pays Worksite Employees from Nextep’s accounts; b) Retains the right to direct and control Worksite Employees in the performance of services in conjunction with the Customer; and c) Retains the right to hire and terminate Worksite Employees, in conjunction with Customer.

Notwithstanding the foregoing, Customer shall be considered the reporting entity for state unemployment purposes if: (a) the contribution rate, or, where applicable the amended contribution rate, of the Customer is greater than the sum of the fund building rate established for the year pursuant to Section 1506.3 of the Illinois Unemployment Act plus the greater of 2.7% or 2.7% times the adjusted state experience factor for the year; or (b) the contribution rate, or, where applicable, the amended contribution rate, of Nextep is less than the contribution rate, or, where applicable, the amended contribution rate of Customer by more than 1.5% absolute.

 

INDIANA

As provided by Indiana Statute §27-16-7-2, Nextep: a) Is responsible for payment of wages to Worksite Employees, and withholding, collection, reporting, and remittance of payroll-related and unemployment taxes to the extent Customer has funded the obligations; provided “wages” do not include any obligation between Customer and a Worksite Employee for payments beyond or in addition to the Worksite 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 Nextep has expressly agreed to assume liability for such payments in this Agreement; and b) Is responsible for, to the extent Nextep has assumed responsibility in the Agreement, making payments for employee benefits for Worksite Employees.

Customer retains the exclusive right to direct and control Worksite Employees as necessary to conduct Customer’s business, discharge Customer’s fiduciary responsibilities, and comply with the licensure requirements that apply to Worksite Employees. The responsibility to obtain workers’ compensation coverage for Worksite Employees from a carrier licensed to do business in Indiana shall be the responsibility as defined in the Agreement; if the responsibility is allocated to Nextep, then Nextep agrees to maintain and provide to Customer at the termination of the Agreement if requested by Customer, records regarding the loss experience related to workers’ compensation insurance provided to Worksite Employees. Nextep will provide Worksite Employees with a written notice of the general description of the relationship between Nextep and Customer.

Customer expressly agrees to indemnify, defend and hold Nextep harmless from any and all claims or liabilities which may arise for acts which occurred prior to the inception of this Agreement including but not limited to any claims or liabilities which result due to Nextep being deemed a successor employer under Indiana unemployment insurance law including liability for unpaid unemployment insurance premiums, new or pending claims, blended rate adjustments, negative reserve balances, and accompanying interest and penalties.

 

KANSAS

As provided by the Kansas Professional Employer Organization Registration Act (“Act”),K.S.A. 44-1707, Nextep: a) Shall have responsibility to pay wages to Worksite Employees; provided wages does not include any obligation between Customer and a Worksite Employee for payments beyond or in addition to the Worksite 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 Nextep has expressly agreed to assume liability for such payments in the Agreement; b) Shall have responsibility to withhold, collect, report, and remit payroll-related and unemployment taxes in relation to Worksite Employees; c) Along with Customer, shall have a right to hire, discipline and terminate Worksite Employees to fulfill Nextep’s responsibilities under the Act and the Agreement; and d) To the extent Nextep has assumed responsibility in the Agreement, to make payments for employee benefits for Worksite Employees. Nextep will provide Worksite Employees with a written notice of co-employment and the relationship between Nextep and Customer.

Nextep shall provide, and Customer shall post in a conspicuous place at Customer’s worksite, the following: a) Notice of the general nature of the co-employment relationship between and among Nextep, Customer, and any Worksite Employees; and b) Any notice required by the state of Kansas relating to unemployment compensation and the minimum wage.

 

KENTUCKY

As provided by Kentucky Revised Statute Ann. §336.232, et. seq. of the Kentucky Professional Employer Organization Act, the relationship between Nextep and Customer is intended to be an ongoing relationship rather than a temporary or project-specific relationship wherein the rights, duties, and obligations of an employer that arise out of an employment relationship have been allocated between co-employers pursuant to the Agreement and this Addendum.

Pursuant to the Agreement and this Addendum: a) Nextep is entitled to enforce only those employer rights and is subject to only those obligations specifically allocated to Nextep by the Agreement, this Addendum or Kentucky Revised Statute Sections 336.230 to 336.250; b) Customer is entitled to enforce those rights, and obligated to provide and perform those employer obligations, allocated to the Customer by the Agreement, this Addendum and Kentucky Revised Statute Sections 336.230 to 336.250; and c) Customer is entitled to enforce any right and obligated to perform any obligation of an employer not specifically obligated to Nextep by the Agreement or Kentucky Revised Statute Sections 336.230 to 336.250.

As provided by Kentucky Revised Statute Ann. §336.232, et. seq. of the Kentucky Professional Employer Organization Act, Nextep: a) Shall have responsibility to pay wages to Worksite Employees; provided wages” does not include any obligation between a Customer and Worksite Employee for payments beyond or in addition to the Worksite 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, unless Nextep has expressly agreed to assume liability for payments in the Agreement; b) to withhold, collect, report and remit payroll and unemployment taxes; c) to the extent Nextep has assumed responsibility in the Agreement, to make payments for employee benefits for Worksite Employees as a result of the outsourcing of payroll duty to Nextep by Customer; and d) Shall have a right to hire, discipline, and terminate a Worksite Employee as may be necessary to fulfill Nextep’s responsibilities under Kentucky Revised Statute Sections 336.230 to 336.250 and the Agreement; provided Customer shall have a right to hire, discipline, and terminate Worksite Employees.

The responsibility to obtain workers’ compensation coverage from a carrier licensed to do business in Kentucky is outlined in the Agreement. Nextep will provide Worksite Employees with a written notice of the general description of the relationship between Nextep and Customer.

 

LOUISIANA

As provided by the Louisiana Professional Employer Act, Revised Statute Section 23:1768 and 22:1210.53: a) Customer retains control over its business enterprise and exercises direction and control over the Worksite Employees as to the manner and method of work done in furtherance of Customer’s business, but authority and responsibility as to other employment matters, including but not limited to hiring, firing, discipline and compensation are allocated to and shall be between Nextep and the Customer as provided in the Agreement; b) Nextep has provided a bond for purposes of maintaining an unemployment insurance account for all Worksite Employees and shall maintain unemployment insurance for Worksite Employees during the Term of the Agreement; c) The responsibility for the procurement and maintenance of workers’ compensation insurance shall be allocated and identified in the Agreement; d) The responsibility for the procurement and maintenance of group health insurance shall be allocated and identified in the Agreement; and e) The Agreement is intended to be ongoing rather than temporary.

This Agreement is executed subject to the provisions of Louisiana R.S. sections 23:1761 through 23:1768, and 22:1741 through 22:1751..

 

MAINE

As required by Maine Revised Statute Title 32, Chapter 125 Sections 14051 and 14055(5), Nextep makes the following disclosures: a) Direction and control of Worksite Employees is shared between Nextep and Customer; provided Customer retains the exclusive right of direction and control over Worksite Employees as is necessary to conduct Customer’s business and without which Customer would be unable to conduct its business, to discharge any fiduciary responsibility that Customer may have; or to comply with any applicable licensure, regulatory, or statutory requirements of Customer or any Worksite Employee; b) Customer shall have a right to hire, discipline, and terminate Worksite Employees; c) The services to be rendered, including costs, and the respective rights and obligations of the parties are contained in the Agreement; and d) Customer may report any complaints regarding Nextep to the Maine Bureau of Consumer Credit Protection.

 

MARYLAND

Pursuant to the Maryland Department of Labor, Licensing and Regulation, Division of Unemployment Insurance, Nextep, in order to be considered an employing unit” under Maryland Code Ann. Section 8-101: a) Places Worksite Employees on its payroll and assigns Worksite Employees to Customer’s worksites; b) Pays Worksite Employees from Nextep’s accounts; and c) Retains a right to hire and terminate Worksite Employees after consultation with Customer.

 

MASSACHUSETTS

As provided by Massachusetts General Laws Chapter 149, Sections 193-203 (the “Act”), Nextep: a) Shall have a right to hire and terminate Worksite Employees as may be necessary to fulfill Nextep’s responsibilities under the Act or as actually delegated by Customer; provided that Customer shall have a right to hire, discipline and terminate Worksite Employees; b) Shall provide Customer a notice, which Customer agrees to post in a conspicuous place in Customer’s worksite, either in hard copy or by electronic means containing the following information:

1. the general nature of the co-employment relationship between Nextep, Customer, and Worksite Employees;
2. the name and telephone number of the Massachusetts Department of Labor Standards;
3. Nextep’s name and telephone number;
4. disclosure as to whether benefit plans are self-funded or not fully insured;
5. the name of the workers’ compensation carrier and policy number;
6. whether Nextep or Customer maintain the workers’ compensation policy and performs safety inspection at the workplace;
7. a phone number or contact to report injuries and hazardous worksite conditions; and
8. multilingual tagline on notice provided by the Massachusetts Department of Labor Standards that includes the telephone number of the Department.

Customer retains the exclusive right to direct and control Worksite Employees as necessary to conduct Customer’s business, discharge Customer’s fiduciary responsibilities, and comply with the licensure requirements that apply to Customer or Worksite Employees. Upon termination of the relationship between Nextep and Customer, Nextep shall provide Worksite Employees with a written notice of the termination of the relationship. Customer is solely responsible for workplace safety, risk and hazard control including the responsibility for disclosing information about workplace injuries and illness required by the federal Occupational Safety and Health Act and for performing workplace safety inspections of all premises where Worksite Employees are employed.

 

MICHIGAN

As provided by the Michigan Professional Employer Organization Regulatory Act (“Act”), Michigan Compiled Law Section 338.3737, Nextep shall: a) Pay wages to Worksite Employees; provided wages do not include any obligation between Customer and a Worksite Employee for payments beyond, or in addition to, the Worksite Employee’s salary, draw, or regular rate of pay, including bonuses, commissions, severance pay, deferred compensation, profit sharing, or vacation, sick, or other paid time off pay, unless Nextep has expressly agreed to assume liability for those payments in the Agreement; b) Withhold, collect, report and remit payroll-related and unemployment taxes; c) Make payments for employee benefits for Worksite Employees, to the extent Nextep has assumed responsibility in the Agreement; and d) Retain a right to hire, discipline, and terminate Worksite Employees, as may be necessary to fulfill Nextep’s responsibilities under the Act and the Agreement; provided Customer may also hire, discipline, and terminate a Worksite Employee.

Customer and Nextep each retain responsibility to comply with the workers’ disability compensation act of 1969, 1969 PA 317, MCL 418.101 to 418.941. Worksite Employees whose services are subject to sales tax are considered the employees of Customer for purposes of collecting and levying sales tax on the services performed by the Worksite Employee. The Act does not relieve Customer of any sales tax liability with respect to its goods or services.

As provided by the Michigan Professional Employer Organization Regulatory Act (“Act”), Michigan Compiled Law Section 338.3739: a) Customer is solely responsible for the quality, adequacy, or safety of the goods or services produced or sold in the Customer’s business; b) Customer is solely responsible for directing, supervising, training, and controlling the work of the Worksite Employees with respect to the business activities of Customer and is solely responsible for the acts, errors, or omissions of the Worksite Employees regarding those activities; c) Customer is not liable for the acts, errors, or omissions of Nextep or of any Worksite Employee when the Worksite Employee is acting under the express direction and control of Nextep; and; d) Nextep is not liable for the acts, errors, or omissions Customer or of any Worksite Employee or direct employee of Customer when the Worksite Employee or direct employee is acting under the express direction and control of Customer.

Nextep shall provide written notice to each Worksite Employee affected by the Agreement regarding the general nature of the co-employment relationship between and among Nextep, Customer, and the Worksite Employee.

As provided in Michigan Administrative Code Section 421.190, Customer acknowledges that neither Nextep, nor any individual owner of Nextep, has an ownership interest of more than 20% in Customer, if any, nor does Nextep have direct or indirect control over Customer, including any Customer subsidiaries or affiliates, and Customer does not have more than a 20% ownership interest in Nextep, if any.

 

MISSISSIPPI

As required under Mississippi Employment Security Law, 71-5-1, et. seq., Customer shall maintain unemployment insurance in accordance with Mississippi state law. Specifically, Customer shall maintain its own account number, collect and remit unemployment contributions, retain its own experience rate, and file any and all reports required by state law. Nextep shall provide written notice of the relationship between Nextep and Customer to Worksite Employees.

 

MISSOURI

As provided by the Missouri Professional Employer Organization Act, Sections 285.700 to 285.750 (the “Act”), Nextep shall have responsibility to: a) Pay wages to Worksite Employees; provided wages does not include any obligation between Customer and a Worksite Employee for payments beyond or in addition to the Worksite 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 Nextep has expressly agreed to assume liability for such payments in the Agreement; b) Withhold, collect, report, and remit payroll-related and unemployment taxes; and c) Make payments for employee benefits for Worksite Employees, to the extent Nextep has assumed responsibility in the Agreement. Nextep shall have a right to hire, discipline and terminate Worksite Employees as may be necessary to fulfill Nextep’s responsibilities under the Act or the Agreement; provided that Customer shall have a right to hire, discipline and terminate Worksite Employees as necessary to conduct Customer’s business, discharge Customer’s fiduciary responsibilities, and comply with the licensure requirements that apply to Worksite Employees. Nextep shall provide written notice to Worksite Employees, of the general nature of the co-employment relationship between Nextep, Customer and Worksite Employees; Customer retains the exclusive right to direct and control Worksite Employees as necessary to conduct Customer’s business, discharge Customer’s fiduciary responsibilities, and comply with the licensure requirements that apply to Customer or Worksite Employees.

The responsibility to obtain workers’ compensation coverage, for directly employed workers of Customer and Worksite Employees of Client, shall be either all in the residual market or all in the voluntary market with the same carrier licensed to do business in Missouri, is set forth in the Agreement.

 

MONTANA

As provided by the Montana Professional Employer Organizations and Groups Licensing Act, MCL § 39-8-207, Nextep: a) Reserves a right to direction and control Worksite Employees; provided that Customer retains sufficient direction and control over Worksite Employees as is necessary to conduct Customer’s business, discharge any fiduciary responsibility which it may have, or comply with any applicable licensing requirements; b) Retains authority to hire, reassign, discipline and terminate Worksite Employees; provided Customer retains the right to accept or cancel the assignment of any Worksite Employees; c) Assumes responsibility for the payment of wages, workers’ compensation premiums, payroll-related taxes and employee benefits agreed to be provided to Worksite Employees pursuant to the Agreement out of its own account without regard to payment by Customer; d) Pays unemployment taxes out of its own account for Worksite Employees and maintains Employee records required under the Montana unemployment insurance laws; and e) Provides workers’ compensation coverage and payment of workers compensation premiums for all Worksite Employees and provide, secure and maintain all records and documents required of employers under the Montana workers’ compensation laws.

Customer shares joint and several liability for any wages, workers’ compensation premiums, and payroll-related taxes and for any benefits left unpaid by Nextep, and in the event Nextep’s license is suspended or revoked, this liability is retroactive to the Customer’s entering into a contract with Nextep. Customer is responsible for complying with the Montana Safety Culture Act, Title 39, Chapter  71, Part 15.

 

NEBRASKA

As provided by Nebraska Revised Statute §48-2701, et. seq. of the Nebraska Professional Employer Organization Registration Act (“Act”), Nextep: a) Shall have responsibility to pay wages to Worksite Employees; provided wages does not include any obligation between Customer and a Worksite Employee for payments beyond or in addition to the Worksite 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 Nextep has expressly agreed to assume liability for such payments in the Agreement; b) Shall have responsibility to withhold, collect, report, and remit payroll-related and unemployment taxes; c)Along with Customer, shall have a right to hire, discipline and terminate Worksite Employees to fulfill Nextep’s responsibilities under the Act and the Agreement; and d) Assumes responsibility, to the extent Nextep has assumed responsibility in the Agreement, to make payments for employee benefits for Worksite Employees.

The responsibility to obtain workers’ compensation coverage from a carrier licensed to do business in Nebraska is set forth in the Agreement. Customer shall not be relieved of its obligations under the Nebraska Workers’ Compensation Act to provide workers’ compensation coverage in the event that Nextep fails to obtain workers’ compensation insurance for which it has assumed responsibility. If the responsibility to obtain workers’ compensation coverage is allocated to Nextep, Nextep shall: a) Advise Customer of the provisions regarding election of insurance by corporation executive officers and regarding election of insurance by partners. LLC members and self-employed individuals of section 48-115 (9) and (10) of the Nebraska Workers’ Compensation Act; b) Advise Customer of its obligation to obtain an additional workers’ compensation insurance policy if Nextep’s policy limits coverage to Worksite Employees as specified in the Agreement; and c) Provide Customer with the name of the insurer providing coverage, the policy number, claim notification instructions, and any itemized charges that are to be made for workers’ compensation coverage within ten (10) days after enrollment.

Nextep will provide Worksite Employees with a written notice of co-employment and the relationship between Nextep and Customer. Nextep shall provide, and Customer shall post in a conspicuous place at Customer’s worksite, the following: a) Notice of the general nature of the co-employment relationship between and among Nextep, Customer, and any Worksite Employees; and b) Any notice required by the state of Nebraska relating to unemployment compensation and the minimum wage.

Customer retains the exclusive right to direct and control the Worksite Employees as is necessary to conduct Customer’s business, to discharge any of Customer’s fiduciary responsibilities, or to comply with any licensure requirements applicable to Customer or to Worksite Employees.

If either Nextep or Customer receives notice of a claim or charge of discrimination made by any Worksite Employee, the receiving Party agrees to inform the other Party of the claim or charge of discrimination and transmit a copy of the claim or charge of discrimination to the other Party within ten (10) business days after such receipt.

 

NEVADA

As provided in Nevada Revised Statute, 616B.692, in relation to workers’ compensation coverage:

• Nextep may satisfy its obligation to provide coverage for workers’ compensation for Worksite Employees working for Customer under the Agreement by any of the following methods listed below:
  • Customer has obtained a policy of workers’ compensation insurance directly from an insurer, and Customer maintains that policy, which covers all of the employees of Customer, including, without limitation, the Worksite Employees working for Customer under the Agreement, subject to the same requirements and conditions as if Customer were the sole employer of the Worksite Employees for the purpose of providing coverage for workers’ compensation. With respect to a policy of workers’ compensation insurance provided pursuant to this subparagraph 2(a)(i) of this Addendum:
    • The policy must name Nextep as an additional insured; and
    • If Nextep is licensed as a producer of insurance pursuant to Nevada Revised Statute 683A.261 and is authorized by the insurer, Nextep may negotiate coverage, collect premiums on behalf of the insurer and otherwise act as an intermediary with respect to the policy; or
  • Customer 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 Customer, including, without limitation, the Worksite Employees working for Customer under the Agreement, subject to the same requirements and conditions as if Customer were the sole employer of the Worksite Employees for the purpose of providing coverage for workers’ compensation; or
  • Customer is certified by the Commissioner as a self-insured employer which self-insures all of the employees of Customer, including, without limitation, the Worksite Employees working for Customer under the Agreement, subject to the same requirements and conditions as if Customer were the sole employer of the Worksite Employees for the purpose of providing coverage for workers’ compensation; or
  • [IF THIS METHOD IS AGREED TO IN THE AGREEMENT, THEN PARAGRAPH 5 BELOW APPLIES] Nextep has obtained a policy of workers’ compensation insurance directly from an insurer on a multiple coordinated policy basis, and will maintain that policy, which covers all of the Worksite Employees working for Customer under the Agreement or all of the Worksite Employees working for Customer under the Agreement and other Customer companies affiliated with the Customer company such that:
    • The policy covers the liability of both Nextep and Customer company or companies for payments required by the Nevada Industrial Insurance Act, or the Nevada Occupational Disease Act;
    • A separate policy is issued to or on behalf of each Customer company or group of affiliated customer companies under the multiple coordinated policy; and
    • Nextep controls payments and communications related to the policy; or
  • [IF THIS METHOD IS AGREED TO IN THE AGREEMENT, THEN PARAGRAPH 5 BELOW APPLIES] Nextep has obtained a policy of workers’ compensation insurance on a master policy basis directly from an insurer, and will maintain that policy, which:
    • Covers some or all of the Worksite Employees of Nextep who are working for one or more customer companies pursuant to a written agreement; and
    • May cover all of the employees of Nextep who work directly for Nextep and are not working for Customer under the Agreement.

If Nextep or Customer maintains a policy of workers’ compensation insurance which provides coverage for Worksite Employees working for Customer under the Agreement, each insurer insuring Worksite Employees shall report to the Advisory Organization, as defined in Nevada Revised Statute 686B.1752:

• Payroll and claims data for Customer in a manner that identifies both Customer and Nextep; and
• The status of coverage with respect to Customer in accordance with any applicable requirements regarding proof of coverage.

Nextep and Customer may agree (in the Agreement) that the services by Nextep to Customer do not include obtaining and maintaining a policy of workers’ compensation insurance for Worksite Employees working for Customer under the Agreement. Therefore, Customer acknowledges and agrees that:

• Customer remains solely responsible for providing coverage for workers’ compensation for all of the employees of Customer, including, without limitation, the Worksite Employees working for Customer under the Agreement; and
• Customer acknowledges that this notice was provided to Customer prior to entering into the Agreement.

If Nextep agrees to provide coverage for workers’ compensation for Worksite Employees working for Customer under the Agreement in accordance with subparagraphs 2(a)(iv) or (v) of this Addendum the following contractual requirements apply:

The coverage for workers’ compensation shall not take effect until Customer executes the Agreement between Nextep and Customer;

• The coverage for workers’ compensation does not take effect until the effective date designated by the insurer in the policy of workers’ compensation insurance;
• While the policy of workers’ compensation insurance is in force, Nextep will pay all premiums required by the policy, including, without limitation, any adjustments or assessments, and will be entitled to any refunds of premiums;
• The procedures for termination of the Agreement and any fees or costs payable upon termination are set forth in the Agreement;
• Except as otherwise provided by law, all services provided by Nextep to Customer will cease immediately on the effective date of any termination of the Agreement;
• The insurer from whom the policy of workers’ compensation insurance is obtained by Nextep has the right to inspect the premises and records of Customer;
• Customer’s loss experience will continue to be reported in Customer’s name to the Commissioner and will be available to subsequent insurers upon request;
• The policy of workers’ compensation insurance covers only those employees acknowledged in writing by Nextep to be Worksite Employees working for Customer under the Agreement;
• Customer is responsible at all times for providing coverage for workers’ compensation for any employees of Customer who are not Worksite Employees working for Customer under the Agreement; and
• Customer must provide satisfactory evidence of the coverage required by subparagraph 5(i) of this Addendum to the insurer from whom the policy of workers’ compensation insurance is obtained by Nextep.

Nextep will provide Worksite Employees with a written notice of the employment relationship between Worksite Employee, Nextep and Customer. By this Agreement and Addendum, Customer and Nextep intend to create an ongoing, long-term relationship, as compared to a temporary or project-specific agreement.

 

NEW HAMPSHIRE

As provided by New Hampshire Revised Statutes § 277-B:9, Nextep will assign individuals, including individuals previously employed by Customer, to perform services for Customer on an on-going basis, and shall be solely responsible for the following: a) Paying wages to Worksite Employees; provided Nextep may rely on initial hiring documentation of wages, ongoing pay change documentation, and reported payroll documentation regarding hours worked or other measured unit of employee compensation received from Customer; b) Preparing and issuing of W-2 forms for Worksite Employees; c) Calculating, collecting, and remitting all payroll taxes, including income tax and social security tax, as required by law with respect to Worksite Employees; d) Complying with state and federal unemployment compensation requirements, including the reporting of wages paid, making required contributions, and processing claims for benefits on a timely basis as required by New Hampshire law; e) Providing for workers’ compensation insurance for Worksite Employees (if agreed to in the Agreement); f) Making payments for health or other benefits for Worksite Employees, to the extent the Agreement calls for Nextep to provide such benefits; g) Complying with all laws, rules, and regulations for employee leasing companies under the Agreement or as required by New Hampshire or the federal government; h) Paying the tax imposed by RSA 77-E and inclusion in its compensation portion of the base tax those wages paid to Worksite Employees; i) Providing to each Worksite Employee an employee manual outlining the terms and conditions of employment with Nextep; and j) Providing an employee grievance system for Worksite Employees.

As provided by New Hampshire Revised Statutes § 277-B:9, Customer shall be solely responsible for the following: a) Directing and controlling Worksite Employees as necessary to conduct Customer’s business, discharge any applicable fiduciary duty, or comply with any licensure or regulatory or statutory requirement; b) The goods and services produced by Customer and its direct and leased Worksite Employees; c) The acts, errors, and omissions of Worksite Employees committed within the scope of Customer’s business or under the direction and control of Customer; d) Providing accurate personnel and payroll information, and a record of hours and wages to Nextep and the Department of Labor when requested, as a co-employer on all Worksite Employees as required of employers under RSA 279:27; e) Complying with all wage and hour laws, including recordkeeping requirements and determinations of exempt and non-exempt status; f) Providing a safe workplace to Worksite Employees free of all hazards in compliance with the Occupational Safety and Health Act of 1970 and regulations or any similar law; g) Complying with all laws prohibiting employment discrimination, harassment, and retaliation on the basis of any protected class or characteristic; h) Paying all expenses arising from unionization, negotiating collective bargaining agreements, and processing grievances and unfair labor practice charges related to Customer or Worksite Employees; i) Complying with all applicable professional license or bonding requirements pertaining to the Customer’s business and maintaining professional liability coverage; j) Assuming and accepting responsibility for all compensation paid to any Worksite Employee that is not paid through Nextep or reported to Nextep; responsibility shall include but shall not be limited to all payroll taxes, federal and state taxes, additional premium for insurances including but not limited to workers’ compensation insurance, and additional matching contributions if any; and k) Assuming and accepting all responsibilities, as defined under New Hampshire law, of an employer when hiring or employing individuals separately and not included in the Agreement with Nextep.

Pursuant to New Hampshire Revised Statutes § 277-B:17, until Nextep has been in business in New Hampshire for a period of 2 years, Customer shall be jointly and severally liable with Nextep for the payment of unemployment contributions as calculated under the provisions of RSA 277-B:9, VI.

Customer retains the statutory obligation of providing workers’ compensation coverage for employees that are not provided, supplied, or assigned by Nextep.

 

NEW JERSEY

As provided by NJS § 34:8-68, Nextep: a) Reserves a right to direct and control Worksite Employees; provided that Customer retains the right to exercise such direction and control over Worksite Employees as is necessary to conduct Customer’s business, discharge any fiduciary responsibility which it may have, or comply with any applicable licensing requirements; b) Retains authority to hire, reassign, discipline and terminate Worksite Employees; provided no Worksite Employee shall be reassigned to another customer without the Worksite Employee’s consent and Customer has the right to accept or cancel the assignment of any Worksite Employee; c) Retains the responsibility for the payment of wages without regard to payment by Customer, except this provision shall not affect the Customer’s obligation with respect to the payment of wages to Worksite Employees; and d) Assumes responsibility for the payment and collection of payroll taxes for Worksite Employees;

Nextep shall hire its initial employee compliment from employees of the Customer at the time of the execution of the Agreement at comparable terms and conditions of employment as are in existence at the Customer at the time of the execution of the Agreement.

If at the time Nextep and Customer enter into an Agreement, and Customer has a collective bargaining agreement in place for Worksite Employees, the following provision applies:

Customer shall continue to honor and abide by the terms of any applicable collective bargaining agreements, and upon expiration thereof, any obligations of Customer to bargain in good faith in connection with such collective bargaining agreements shall not be affected in any manner by the Agreement entered into between Nextep and Customer.

Both Nextep and Customer retain a right of direction and control over management of safety, risk, and hazard control of the work site including responsibility for performing safety inspections of Customer equipment and premises, responsibility for promulgation and administration of employment and safety policies, and responsibility for the management of workers compensation claims and filings.

Pursuant to NJS § 34:8-74, with respect to Worksite Employees employed in the State of New Jersey, Nextep shall calculate the unemployment benefit experience contribution rates and temporary disability contribution rates with respect to such Worksite Employees upon the inception and termination of this Agreement in accordance with the following method.

Calculation of Unemployment Benefit Experience. Upon the effective date of this Agreement, Nextep shall report wages and pay contributions for those employees of Customer whom are co-employed by Nextep and work in the State of New Jersey (“Nextep NJ Worksite Employees”) pursuant to the “Unemployment Compensation Law,” N.J.S.A.43:21-1 et seq., based on the benefit experience assigned to Nextep under N.J.S.A.43:21-7.  With respect to any employee of Customer working in the State of New Jersey who is not co-employed by Nextep (“Customer NJ Employee”), Customer shall continue to report wages and pay contributions for the Customer NJ Employees using Customer’s contribution rate based on the benefit experience assigned to Customer under N.J.S.A.43:21-7. 

Pursuant to N.J.S.A. 34:8-73, upon a termination of this Agreement by Customer or Nextep (“Termination”), if the Nextep NJ Worksite Employees have been co-employed for less than two full calendar years, Nextep shall provide to the New Jersey Department of Labor (“NJDOL”) the data required by the NJDOL to calculate the benefit experience associated with the Nextep NJ Worksite Employees to the extent required by applicable law.  The NJDOL shall combine that benefit experience with Customer’s existing benefit experience to determine Customer’s new rate as of the following July 1st.  Customer shall continue to use Nextep’s contribution rate for the period beginning on the date of the termination of this Agreement and ending the following July 1^st; provided, however, that if Nextep did not co-employ all employees of Customer, Customer must use its own contribution rate for the period beginning on the date of the termination of this Agreement and ending the following July 1^st.

Pursuant to N.J.S.A. 34:8-73, upon a Termination which occurs after the Nextep NJ Worksite Employees have been co-employed for at least two full calendar years, Customer shall be assigned the rate of a new employer under N.J.S.A.43:27-7 until Customer is eligible for a rate based on benefit experience pursuant to that section of the “Unemployment Compensation Law” or enters into another professional employer organization agreement; provided, however, that if Nextep did not co-employ all employees of Customer, the benefit experience associated with that portion of the Customer’s employees that were co-employed by Nextep shall not be transferred to Customer and shall not be used in the calculation of Customer’s future contribution rates.

Pursuant to N.J.S.A. 34:8-73, if Customer enters into a subsequent professional employer organization agreement with another professional employer organization with respect to the Nextep NJ Worksite Employees immediately after a Termination, the payroll relative to Customer shall be reported and paid at the rate assigned the second professional employer organization.

Calculation of Temporary Disability Contribution Rates. For as long as Nextep maintains an approved private plan of disability benefits under the “Temporary Disability Benefits Law,” Customer and Nextep are exempt from the requirement to contribute to the New Jersey State Disability Benefits Fund pursuant to N.J.S.A. 43:21-7 with respect to wages paid to the Nextep NJ Worksite Employees.  Customer shall instead be required to pay the premium amount established by Nextep and its insurance carrier.  Upon a Termination, Nextep shall provide to the NJDOL the data required thereby to calculate the temporary disability rates of the Nextep NJ Worksite Employees to the extent required by applicable law.  Customer remains obligated to contribute to the New Jersey State Disability Fund pursuant to N.J.S.A. 43:21-7 with respect to wages paid to any Customer NJ Employees unless Customer is subject to an exemption in accordance with applicable law.

Customer hereby acknowledges receipt of the information set forth above as required by N.J.S.A. 34:8-74.

Nextep shall provide written notice of the relationship between Nextep and Customer to Worksite Employees.

 

NEW YORK

Nextep agrees to co-employ all or a majority of the employees providing services for Customer and the arrangement is intended to be an ongoing, not temporary, basis.

As provided by §922 of the New York Professional Employer Act, Nextep: a) Reserves a right to direct and control Worksite Employees; provided that Customer retains the right to exercise such direction and control over Worksite Employees as is necessary to conduct Customer’s business, discharge any fiduciary responsibility which it may have, or comply with any applicable licensing requirements; b) Retains authority to hire, discipline and terminate Worksite Employees; c) Assumes responsibility for the payment of wages and the withholding and remittance of payroll related taxes and employee benefits for Worksite Employees from Nextep’s own accounts as long as the Agreement remains in force; and d) Will be considered an employer for the purposes of withholding state income taxes for Worksite Employees.

Nextep agrees to pay unemployment insurance according to law and to obtain required workers’ compensation coverage either in its own name or in the Customer’s name as long as the Agreement remains in force. Nextep will provide Worksite Employees with a general description of the relationship between Nextep and Customer. Customer shall have all newly-hired Worksite Employees provide written confirmation of receipt of the Notice and Acknowledgment of Pay Rate and Payday under Section 195.1 of the New York State Labor Laws, as required by applicable law. The Agreement describes the duties and responsibilities of each party, including the responsibility for hiring, firing, and disciplining of Worksite Employees.

 

NORTH CAROLINA

As provided by the North Carolina Professional Employer Organization Act, §58-89A-100 (the “Act”), Nextep: a) Assumes responsibility for the payment of Worksite Employee wages as agreed to in the Agreement; provided “wages” does not include any obligation between Customer and a Worksite Employee for payments beyond or in addition to the Worksite 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 Nextep has expressly agreed to assume liability for such payments in this Agreement; b) Assumes responsibility for the payment and collection of payroll taxes for Worksite Employees on payroll that is reported to and paid by Nextep; c) Retains a right to hire, terminate, and discipline Worksite Employees as may be necessary to fulfill Nextep’s responsibilities under the Act and the Agreement; and d) Retains a right of direction and control over the adoption of employment policies, responsibility for the management of workers’ compensation claims, claim filings, and related procedure in accordance with applicable federal and North Carolina laws.

The responsibility to obtain workers’ compensation coverage for Worksite Employees, from an entity authorized to do business in North Carolina and otherwise in compliance with all applicable requirements shall be the responsibility as set forth in the Agreement and in accordance with the respective provision below:

If Nextep agrees to maintain worker’s compensation coverage for Customer’s Worksite Employees, and Nextep agrees to maintain and provide to Customer, at the termination of this Agreement if requested by Customer, records regarding the loss experience related to workers’ compensation insurance provided to Worksite Employees; OR

If Customer agrees to maintain workers’ compensation coverage for Customer’s Worksite Employees, then Customer agrees to provide Nextep a copy of the workers’ compensation certificate confirming coverage and naming Nextep as an alternate employer.

Customer shall have a continuing obligation to provide workers’ compensation coverage as required by Chapter 97 of the North Carolina General Statutes, the Workers’ Compensation Act, for any Customer employees who are not Worksite Employees and not otherwise covered under a policy described in this Addendum.

Customer retains the exclusive right of direction and control over Worksite Employees as is necessary to conduct Customer’s business and without which Customer would be unable to conduct its business, to discharge any fiduciary responsibility that Customer may have; or to comply with any applicable licensure, regulatory, or statutory requirements of Customer or any Worksite Employee. Customer shall have a right to hire, discipline, and terminate Worksite Employees.

By entering into the Agreement, Customer certifies and agrees that it does not owe its current or prior workers’ compensation carrier any premium for workers’ compensation insurance, or if Customer owes its current or prior professional employer organization (“PEO”) amounts due under the PEO agreement, those are only for premiums or amounts due that are subject to dispute. Customer further certifies that Customer has met any and all prior premium or fee obligations.

Nextep shall provide written notice of the relationship between Nextep and Customer to Worksite Employees not later than the first payday after the date on which that individual becomes a Worksite Employee. Nextep shall also give each Worksite Employee written notice when the Worksite Employee ceases to be a Worksite Employee covered by the Agreement and this Addendum.

 

 NORTH DAKOTA

As provided by North Dakota Statute §43-55-06 (“Act”), Nextep: a) Shall have responsibility to pay wages to Worksite Employees; provided wages means all remuneration for services to Nextep and Customer, regardless of source, including a commission or bonus and the cash value of any remuneration in a medium other than cash. Any gratuity customarily received by an individual in the course of the individual’s service from any source other than Customer or Nextep must be treated as wages received from the individual’s co-employers; b) Shall have responsibility to withhold, collect, report, and remit payroll-related and unemployment taxes for Worksite Employees; provided Customer shall accurately report all wages of Worksite Employees to Nextep; c) Along with Customer, has a right to hire, discipline, and terminate a Worksite Employee as may be necessary to fulfill Nextep’s responsibilities under the Act and the Agreement; and d) Shall make payments for employee benefits for Worksite Employees to the extent Nextep assumes responsibility in the Agreement.

The responsibility to obtain workers’ compensation coverage from a carrier licensed to do business in North Dakota is the responsibility as set forth in the Agreement. Nextep will provide Worksite Employees with written notice of the general nature of the co-employment and the relationship between Nextep and Customer.

 

OHIO

As provided by O.R.C. §4125.01, et. seq. and OAC 4123-17-15, et. seq., Nextep will perform the following functions: a) Pay wages and related payroll taxes in relation to Worksite Employees; b) Maintain workers’ compensation coverage in accordance with applicable state law, and pay all Customer’s workers’ compensation premiums, maintain a record of workers’ compensation claims, and manage all workers’ compensation claims, filings and related procedures in relation to Worksite Employees in compliance with Ohio law; c) Maintain workers’ compensation coverage under Nextep’s workers’ compensation risk number for all payroll reported under Nextep’s tax identification number for federal tax purposes; d) Maintain complete records separately listing the payroll and workers’ compensation claims for Customer by payroll reporting period; e) Maintain payroll in a manner that clearly identifies manual classifications of Customer and the payroll reported to each manual classification for each payroll reporting period; f) Report Customer’s payroll, claims and classification data under a separate and unique subaccount to the Ohio Bureau of Worker’s Compensation (“BWC”); and g) Maintain adequate and required employment-related records for Worksite Employees, and for reporting such information as may be required by appropriate governmental agencies.

Nextep will assign Worksite Employees to perform services for Customer on an on-going or permanent basis pursuant to the Agreement and this Addendum. “Permanent basis” is used as defined under O.R.C. §5739.01(JJ) to distinguish Nextep’s services from that of a temporary employment service and simply means that there is no definitive amount of time Worksite Employees will be assigned to Customer. The use of the term “permanent basis” should not be construed as a guarantee of employment for any specific length of time and all Worksite Employees are employed on an at-will basis.

This Agreement and Addendum shall commence on the Effective Date and remain in full force and effect for a period of two (2) years thereafter (“Initial Period”) in relation to Ohio Worksite Employees, unless terminated by either Party with sixty (60) days written notice prior to the Initial Period expiration date or as provided otherwise in the Agreement. After the Initial Period, this Agreement shall automatically renew for one (1) year periods in relation to Ohio Worksite Employees until terminated by either Party with sixty (60) days written notice prior to the renewal period expiration date or as provided otherwise in the Agreement.

Customer shall maintain individual active workers’ compensation coverage with BWC for all Worksite Employees and Customer’s regular employees working for Customer during the Term of the Agreement. Within fourteen days after receiving notice from the BWC that a refund or rebate will be applied to workers’ compensation premiums, Nextep shall provide a copy of that notice to Customer if it applies to Customer. Nextep shall provide written notice to Worksite Employees of the relationship between Nextep and Customer and of the responsibilities of Nextep and Customer.

 

OKLAHOMA

As provided by §40-600.7(C) of the Oklahoma Professional Employer Organization Recognition and Registration Act, Nextep: (a) reserves a right to direct and control  Worksite Employees; provided that Customer retains the right to exercise such direction and control over Worksite Employees as is necessary to conduct Customer’s business, discharge any fiduciary responsibility which it may have, or comply with any applicable licensing requirements; (b) together with Customer, retains authority to hire, discipline and terminate Worksite Employees; (c) retains the responsibility to pay wages and salaries to Worksite Employees, and to withhold, collect, report, and remit payroll-related unemployment taxes; (d) to the extent  Nextep has assumed responsibility in the Agreement, to make payments for Worksite Employee benefits. Further, in accordance with 40 O.S. Section 600.8, Nextep is the co-employer for purposes of unemployment contributions, and Nextep reports all such contributions under its own unemployment account and contribution rate. The responsibility to obtain workers’ compensation coverage from a carrier licensed to do business in Oklahoma and otherwise in compliance with all applicable requirements is the responsibility of Nextep or Customer. If the responsibility to obtain workers’ compensation coverage is allocated to Nextep, Nextep will maintain and provide to Customer, at the termination of the Agreement, if requested by Customer, records regarding the premium and loss experience related to workers’ compensation insurance provided to Worksite Employees. Nextep will provide each  Worksite Employee with a written notice of the general nature of the co-employment relationship between and among Nextep, Customer, and the Worksite Employee.

 

OREGON

As provided by the Oregon Administrative Rules, 436-180-0140(3)(I), et. seq. governing worker-leasing companies, Nextep is responsible for ensuring that Customer provides adequate training, supervision, and instruction for Worksite Employees to meet the requirements of the Oregon Safe Employment Act, Oregon Revised Statute Chapter 654. Customer agrees to cooperate in providing such training, supervision, and instruction.

Customer agrees that it is the “host employer” as defined in the Oregon Occupational Safety and Health Division Department of Consumer and Business Services Program Directive A-246. As the host employer, Customer directs and controls Worksite Employee’s work and therefore retains sole responsibility for hazard control, site-specific training of all Worksite Employees including hazard communication programs, and the provision of personal protective equipment including use and maintenance, safety meetings, accident reporting and investigation, and recordkeeping under the Oregon Administrative Rules.

The responsibility to obtain workers’ compensation coverage for Worksite Employees from a carrier licensed to do business in Oregon shall be the responsibility as defined in the Agreement. If the responsibility is allocated to Nextep, then Nextep will provide sufficient copies of Form 1188, “Notice of Compliance,” to be posted at the Customer’s premises in a conspicuous manner about the place of business and in a sufficient number of places to inform Worksite Employees about the coverage.

 

PENNSYLVANIA

As required under Title 43 Pennsylvania Statute 751 et seq., (Pennsylvania Unemployment Compensation Law) Section 4(j)(2.1) Customer is the employer of Worksite Employees for unemployment compensation purposes. Worksite Employees’ wages must be reported on the Customer’s unemployment compensation tax account and contributions on those wages must be paid at the Customer’s tax rate. Specifically, Customer shall maintain its own account number, collect and remit unemployment contributions, retain its own experience rate, and file any and all reports required by state law.

Customer authorizes Nextep to file employer reports pursuant to Section 304 of the Pennsylvania Unemployment Compensation Law and pay unemployment contributions, interest, and penalties on Customer’s behalf. Nextep shall file quarterly PEO reports as required by state law if required.

As provided by Section 304 of the Pennsylvania Employer Organization Act, 43 PA. CONS. STAT. 933.101, et. seq. (the “Act”), Nextep shall: a) have responsibility to pay wages to Worksite Employees; provided the term “wages” does not include any obligation between Customer and a Worksite Employee for payments beyond or in addition to the Worksite 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 Nextep has expressly agreed to assume liability for these payments in the Agreement; b) have responsibility to withhold, collect, report and remit payroll-related taxes and may remit unemployment taxes in accordance with section 304; and, to the extent Nextep has assumed responsibility in the Agreement, to make payments for employee benefits for Worksite Employees; and c) have a right to hire, discipline and terminate Worksite Employees as may be necessary to fulfill Nextep’s responsibilities under the Act and the Agreement; provided Customer shall have the right to hire, discipline and terminate Worksite Employees as is necessary to carry out its responsibilities as employer.

The responsibility to obtain workers’ compensation coverage for Worksite Employees from a carrier licensed to do business in Pennsylvania shall be the responsibility as defined in the Agreement. Workers’ compensation coverage shall be provided in accordance with Section 303 of the Act.

Customer retains the exclusive right to direct and control Worksite Employees as is necessary to conduct Customer’s business, to discharge any of Customer’s fiduciary responsibilities or to comply with any licensure requirements applicable to Customer or to Worksite Employees.

Nothing in the Act or in the Agreement, or this Addendum shall relieve Customer from compliance with Pennsylvania’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 Customer 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 Customer shall comply with that act.

Nextep will provide Worksite Employees with written notice of the general nature of the co-employment relationship between Nextep, Customer and Worksite Employees.

 

RHODE ISLAND

As provided by Rhode Island Statute §5-75-7 of the Rhode Island Professional Employer Organizations Act, Nextep: a) Reserves a right of direction and control over Worksite Employees and will exercise that right in the context of the need to do so according to the terms of the Agreement; provided that Customer retains such sufficient direction and control as is necessary to conduct Customer’s business, and, without which, Customer would be unable to conduct its business, discharge any fiduciary responsibilities; or comply with any applicable licensure, regulatory, or statutory requirements; b) Along with Customer, both have a right to hire, discipline and terminate Worksite Employees subject to the terms of any applicable collective bargaining agreement, if one exists;  c) Assumes responsibility to pay wages, withhold, collect, report, and remit payroll related and unemployment taxes to the extent Customer has funded the obligations; provided “wages” shall be defined in accordance with Rhode Island statute §28-42-3 (28) for purposes of the Rhode Island Temporary Disability Insurance Act and the Rhode Island Employment Security Act; and d) Assumes responsibility, to the extent Nextep has assumed responsibility in the Agreement, to make payments for employee benefits for Worksite Employees.

The responsibility to obtain workers’ compensation coverage from a carrier licensed to do business in Rhode Island is the responsibility as set forth in the Agreement; if the responsibility is allocated to Nextep, then Nextep agrees to maintain and provide to Customer at the termination of the Agreement, if requested by Customer, records regarding the loss experience related to workers’ compensation insurance provided to Worksite Employees.

If applicable, Customer agrees and is solely responsible for offering leave to Worksite Employees in accordance with the Rhode Island Health and Safe Families and Workplace Act. Nextep will provide Worksite Employees with a written notice of the general description of the relationship between Nextep and Customer including the fact that Customer’s and Nextep’s contractual obligations and liabilities are not limited by the statute.

 

SOUTH CAROLINA

As provided by the South Carolina Code Section, §40-68-70, Nextep: a) Reserves a right of direction and control over Worksite Employees; provided that the Customer retains such sufficient direction and control as is necessary to conduct the Customer’s business, discharge any fiduciary responsibilities; and comply with any applicable licensure, regulatory, or statutory requirements; b) Assumes responsibility for the payment of Worksite Employee wages without regard to payment by Customer; c) Assumes responsibility for the payment and collection of payroll taxes for Worksite Employees on payroll that is reported to and paid by Nextep; and d) Retains a right to hire, terminate, discipline and reassign Worksite Employees; and retains a right of direction and control over the adoption of employment and safety policies, and responsibility for the management of workers’ compensation claims, claims filings, and related procedures.

Customer agrees to cooperate with Nextep and shall deliver a written explanation of the relationship and Agreement between Nextep and Customer personally to Worksite Employees within ten (10) days after execution of the Agreement. The explanation shall substantially state the terms of the Agreement and include the same notice as is required to be posted in Customer’s place of business as stated below.

As provided by the provisions of South Carolina Codes §40-68-60(B) and (C) and §28-1000 (J)(2), Customer shall post in each of its places of business in a conspicuous place that is in clear and unobstructed view of the Worksite Employees a notice stating, substantially, the following:

“We are operating under and subject to the Workers’ Compensation Act of South Carolina. In case of accidental injury or death to an employee, the injured employee, or someone acting on his or her behalf, shall immediately notify Nextep, Inc.’s Risk Department, 1800 N. Interstate Drive, Norman, OK 73072.  Phone number: 888-811-5150.  Failure to give immediate notice may be the cause of serious delay in the payment of compensation to you or your beneficiaries and may result in failure to receive any compensation benefits.”

Customer agrees to display, in each of its places of business, in a conspicuous place that is in clear and unobstructed public view, the following notice:

The business operated at this location is in a co-employment relationship with Nextep, Inc. (“Nextep”), a professional employer organization licensed and regulated by the South Carolina Department of Consumer Affairs. Any questions or complaints regarding Nextep should be directed to the South Carolina Department of Consumer Affairs, P.O. Box 5757, Columbia, South Carolina 29250-5757, or visit www.scconsumer.gov or call (803) 734-4200.

Nextep shall secure workers’ compensation insurance for Customer. Before the execution of the Agreement and on an annual basis, Customer agrees to allow Nextep to conduct a good faith investigation of Customer’s business to determine if Customer engages any non-assigned employees, including those considered employees under Title 42, South Carolina Workers’ Compensation statute, in any part of the Customer’s trade, business, or occupation. Upon a determination that Customer’s entire workforce includes non-assigned employees, Customer shall secure and maintain workers’ compensation insurance. In the State of South Carolina, Nextep is the employer of record for workers’ compensation purposes; however, it is also the intent of the Parties that, where allowed by law, damages based upon injuries which are covered under such workers’ compensation statute be the sole and exclusive remedy for an assigned Worksite Employee whose injury is compensable pursuant to South Carolina Workers’ Compensation law. Customer continues to be subject to the provisions of Title 42, South Carolina Workers’ Compensation statute and shall comply with Title 42 with regard to procuring and maintaining workers’ compensation insurance for non-assigned employees.

Nextep and Customer agree that (I) notice to or acknowledgment of the occurrence of an injury on the part of Customer is notice to or knowledge on the part of Nextep and its workers’ compensation insurer; (2) for the purposes of Title 42, the jurisdiction of the Customer is jurisdiction of Nextep and its workers’ compensation insurer; (3) Nextep and its workers’ compensation insurer is bound by and subject to awards, judgment, or decrees rendered against them under South Carolina’s workers’ compensation statutes, and (4) Nextep’s or Customer’s insolvency, bankruptcy or discharge in bankruptcy does not relieve Nextep, Customer, or their respective workers’ compensation insurers from payment of compensation for disability or death sustained by a Worksite Employee during the life of a workers’ compensation policy.

Nextep  is regulated by the South Carolina Department of Consumer Affairs. P.O. Box 5757, Columbia, South Carolina 29250-5757, (803) 734-4200, www.scconsumer.gov.

 

SOUTH DAKOTA

Pursuant to the Agreement, a co-employment relationship is created between Nextep, Customer and Worksite Employees. As provided in South Dakota Administrative Rule Section 64:06:02:89, Nextep assumes the responsibilities listed in Administrative Rule Section 64:06:02:89, including the payment of wages, salaries, payroll taxes, payroll deductions, workers compensation costs, insurance premiums, welfare benefits, and retirement benefits, and preparing and filing necessary tax returns and other documents as required by state or federal law in relation to same; provided Nextep does not manage or direct the operation of Customer’s business. Customer is the employer to any existing employees prior to the commencement of the Agreement with Nextep. Customer retains primary control over the hiring, firing, wage rates, salary increases, training, and directing the day-to-day activities of the Worksite Employees. If the Agreement is terminated, then the Worksite Employees’ employment with Nextep is also terminated. If a Worksite Employee leaves the employment of Customer, that Worksite Employee’s employment is terminated with Nextep.

 

TENNESSEE

As provided by the Tennessee Professional Employer Organization Act, §62-43-108, Nextep: a) Reserves a right of direction and control over Worksite Employees assigned to Customer; provided that Customer retains such sufficient direction and control as is necessary to conduct the Customer’s business, discharge any fiduciary responsibilities; and comply with any applicable licensure, regulatory, or statutory requirements; b) Assumes responsibility for the payment of Worksite Employee wages from its own accounts without regard to payment by Customer; provided “wages” does not include any obligation between Customer and a Worksite Employee for payments beyond or in addition to the Worksite 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 Nextep has expressly agreed to assume liability for such payments in this Agreement; c) Assumes responsibility for the payment and collection of payroll taxes for Worksite Employees on payroll that is reported to and paid by Nextep from its own accounts, without regard to payment by Customer; d) Assumes responsibility for the payment of Worksite Employee benefits agreed to be provided to Worksite Employees under the Agreement from its own accounts, without regard to payment by Customer; and e) Retains authority to hire, terminate, discipline and reassign Worksite Employees; provided Customer retains the right to accept or cancel the assignment of any Worksite Employees.

Nextep agrees to provide written notice of the general nature of the relationship between Nextep and Customer to each Worksite Employee assigned to perform services at the Customer’s worksite.

 

TEXAS

As provided by the Texas Professional Employer Organization Act, §91.032, Nextep will notify all Worksite Employees that: a)shares with Customer the right of direction  and control  over the employees assigned to Customer work sites; b) assumes responsibility for the payment of covered Worksite Employee wages as defined in §91.001(17) without regard to payment by Customer; provided Customer is solely obligated to pay any wages for which the obligation to pay is created by an agreement, contract, plan, or policy between the Customer and the Worksite Employee, and for which Nextep has not contracted to pay; c) assumes responsibility for the payment and collection of payroll taxes for covered Worksite Employees on payroll that is reported to and paid by Nextep; and d) shares with Customer the right to hire, fire, discipline and reassign the Worksite Employees; and shares with Customer the right of direction  and control  over the adoption of employment and safety policies and the management of workers’ compensation claims, claim filings and related procedures.

Notwithstanding the above, Customer retains sole responsibility for: a) the direction and control of covered Worksite Employees as is necessary to conduct the Customer’s business, discharge any applicable fiduciary responsibilities, and comply with any applicable licensure, regulatory, or statutory requirements; b) the goods and services produced by Customer; and c) the acts, errors, and omissions of covered Employees committed within the scope of the Customer’s business.

Nextep and Customer have elected to obtain workers’ compensation insurance coverage for covered Worksite Employees. The responsibility to obtain and maintain workers’ compensation coverage from a carrier licensed to do business in Texas and otherwise in compliance with all applicable state law requirements is the responsibility as set forth in the Agreement.  If Customer is responsible for maintaining workers’ compensation insurance coverage, Customer shall pay workers’ compensation insurance premiums for covered Worksite Employees based on the experience rating of Customer. Customer agrees to maintain workers’ compensation coverage for any Customer employee who is not a covered Worksite Employee under this Agreement.  Customer agrees that if an independent contractor does not provide evidence of workers’ compensation coverage, Customer will require the independent contractor to enter an agreement assuming responsibility as an independent contractor in accordance with the Texas Labor Code. Customer understands that the Staff Leasing Services Act, Chapter  91 of the Texas Labor Code, provides that, if this Agreement is terminated more than two years after its effective date, and Customer either obtains a new workers’ compensation policy or adds the former assigned employees to an existing policy, the premium for Customer’s workers’ compensation insurance policy will be based on the lower of: (a) Customer’s experience modifier prior to entering into this Agreement; or (b) Nextep’s experience modifier at the time this Agreement is terminated, even if Customer’s loss experience is better than Nextep’s during the term of this Agreement.

NEXTEP IS SUBJECT TO REGULATION  BY THE TEXAS DEPARTMENT OF LICENSING AND REGULATION (“DLR”). ANY UNRESOLVED COMPLAINTS CONCERNING A LICENSEE OR QUESTIONS CONCERNING THE REGULATION OF STAFF LEASING SERVICES MAY BE ADDRESSED TO THE DLR AT P.O. BOX 12157, AUSTIN, TX 78711OR CLIENT MAY CALL THE DLR AT (512) 463-5522. All references in this Agreement to “leased” or Worksite Employees shall be deemed to mean “assigned” employees. All references in this Agreement to “Nextep” shall be deemed to mean one of Nextep’s entities that is licensed by the DLR.

PURSUANT TO §91.032 OF THE TEXAS CODE, CUSTOMER IS SOLELY OBLIGATED TO PAY WAGES FOR WHICH: (l) THE OBLIGATION TO PAY IS CREATED BY AN AGREEMENT, CONTRACT, PLAN, OR POLICY BETWEEN CUSTOMER AND THE WORKSITE EMPLOYEES; AND (2) NEXTEP HAS NOT CONTRACTED TO PAY.

Nextep and Customer certify that this Agreement meets the requirements and conditions set forth in Texas Tax Code §151.057 and 34 Texas Administrative Rule 3.364 in that Texas sales tax is not due on the staff leasing services provided under this Agreement since a) at least 75% of the covered Worksite Employees providing services under this Agreement were previously employees of Customer for a period of at least three (3) months immediately prior to commencement of the Agreement; b) none of the covered Worksite Employees were employed previously by Nextep (unless the previous employment was through a shared employment relationship) or by an entity that previously provided or currently provides taxable services to Customer; and c) a shared employment relationship exists between Nextep and Customer as to Worksite Employees.

 

UTAH

As provided by §31A-40-202 of the Utah Professional Employer Organization Licensing Act (“Act”), Nextep: a) Together with Customer, retains a right to hire, discipline or terminate Worksite Employees, as defined in §31A-40-203 of the Act, to the extent necessary to fulfill Nextep’s obligations under the Agreement and the Act; b) Shall pay compensation to Worksite Employees, as defined in §31A-40-203 of the Act, and withhold, collect, report, and remit payroll and related unemployment taxes; provided “compensation” does not include any obligation between Customer and a Worksite Employee for payments beyond or in addition to the Worksite 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 Nextep has expressly agreed to assume liability for such payments in this Agreement; and c) Retains responsibility to make payments for Worksite Employee benefits as agreed to in the Agreement.

Nextep shall obtain or assist Customer in obtaining workers’ compensation coverage for Worksite Employees consistent with §31A-40-209 of the Act and in accordance with §34A-2-201(1) or (2) of the Act and the rules of the Labor Commission. Nextep shall provide written notice to Worksite Employees, as defined in §31A-40-203 of the Act, of the general nature of the co-employment relationship between and among Nextep, Customer, and the Worksite Employee.

Customer is solely responsible for directing, supervising, training, and controlling the work of a Worksite Employee regarding all business activities of the Customer. Customer expressly absolves Nextep of control over the day-to-day job duties of the Worksite Employees and over their respective job sites. Nextep shall also not be responsible for any act or omission of the Customer and shall have no control over the job site at which, or from which, Worksite Employees perform their services.

 

VIRGINIA

As provided by Virginia Administrative Code §16VAC30-100-40(B), Customer acknowledges that it is obligated to comply with the insuring requirement of §65.2-801 of the Code of Virginia with respect to employees who are not co-employees covered under the master workers’ compensation policy. Customer agrees to obtain workers’ compensation coverage for those employees in accordance with Virginia law. Nextep shall provide written notice of the relationship between Nextep and Customer to Worksite Employees, including information concerning filing for workers’ compensation and unemployment benefits.

 

WISCONSIN

As provided by Wisconsin’s Statutes §108.02(21e), Nextep shall have the following rights and responsibilities: a) Retain a right to set Worksite Employee’s rate of pay, whether or not through negotiations; b) Retain a right to pay Worksite Employees from its own account; c) Retain a general right of direction and control over Worksite Employees; provided that Customer retains the right to exercise such direction and control over Worksite Employees as is necessary to conduct Customer’s business, discharge any fiduciary responsibility which it may have, or comply with any applicable licensing requirements; d) Hire, reassign or terminate Worksite Employees to perform services for Customer; e) Assume responsibility for the unemployment insurance coverage of Worksite Employees, file all required reports, pay all required contributions or reimbursements due on the wages of Worksite Employees, and otherwise comply with all the provisions of the Wisconsin unemployment insurance statute; and f) Have the obligation to establish, fund and administer employee benefit plans for Worksite Employees, as agreed to in the Agreement.

Nextep sets wage rates with each Worksite Employee by written Rate Confirmation and Customer may not change the rate of any Worksite Employees’ pay without the prior consent of Nextep. Nextep shall provide written notice of the relationship between Nextep and Customer to Worksite Employees.

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