LESSOR EMPLOYING UNIT/PROFESSIONAL EMPLOYER ORGANIZATION WAGE AND TAX REPORTING INFORMATION

In order to relieve their clients from joint and several liability and separate reporting requirements, a lessor employing unit must post and maintain a surety bond in the amount of one hundred thousand dollars ($100,000). If, after having the bond posted for three (3) years all contributions have been paid in a timely manner, the bond may, upon request, be reduced to thirty-five thousand dollars ($35,000) and shall remain at $35,000 as long as the lessor employing unit continues to report and pay all contributions in a timely manner.

For any client obtained during the period January 1, 1998, through June 30, 2005, a bonded lessor employing unit shall report such clients’ wages on the lessor employing unit’s quarterly contribution and wage report using the lessor employing unit’s contribution rate, account number and FEIN.

For any client obtained on or after July 1, 2005, a bonded lessor employing unit shall report such client’s wages using the client’s account number and contribution rate for three (3) consecutive years. For certification purposes, the lessor employing unit’s FEIN will be used. After reporting such client’s wages for three (3) consecutive years, a bonded lessor employing unit shall report such client wages on the lessor employing unit’s quarterly contribution and wage report using the lessor employing unit’s contribution rate, account number and FEIN.

Clients of a lessor employing unit must continue to report wages paid to their employees and pay the contributions due on them until the lessor employing unit has complied with the surety bond requirements as stated above. A lessor employing unit that has not posted a surety bond, must submit separate quarterly contribution and wage reports for each of its clients.

When an employer enters into a contract with a lessor employing unit that has not posted a $100,000 surety bond, a new Department of Workforce Services’ account number will be issued. If the client has an existing account with DWS, it will be terminated and a new DWS account number will be issued as a successor, using the lessor employing unit’s FEIN for certification purposes.

If a client chooses to retain a portion of its employees, a multiple account will be established with the parent account unit belonging to the client and the secondary account unit belonging to the lessor employing unit. Both the client and lessor employing unit will have joint and several liability.

The Arkansas Professional Employer Organization Recognition and Licensing Act ACA § 23-92-401 states in part that lessor employing units will not engage in any activity of employee leasing unless and until the requirements of the Insurance Commissioner of the State of Arkansas have been met. These requirements are in addition to the requirements of the Arkansas Employment Security Law.

In order for lessor employing unit accounts to be accurately maintained, the Arkansas Insurance Commissioner requires the lessor employing unit to provide it with a list monthly of clients added and deleted. A copy of this list must also be sent to DWS. A Power of Attorney signed by the client’s representative must also be submitted to DWS for each client.

No lessor employing unit will be acknowledged by DWS until the license required by the Insurance Commissioner’s Office has been obtained. Inquiries regarding the Arkansas Professional Employer Organization Recognition and Licensing Act should be mailed to the Arkansas Insurance Department at 1200 West Third Street, Little Rock, AR 72201-1904, or you may call (501) 371-2808.

The lessor employing unit contact for DWS may be reached by calling (501) 682-3325. All lessor employing unit documents should be directed to the attention of the DWS Lessor Employing Unit, Post Office Box 8007, Little Rock, AR 72203-8007 or by facsimile to (501) 682-3269.

**********