§ 58-89A-5. Definitions. - North Carolina Statutes

§ 58‑89A‑5. Definitions.

In this Article:

(1)        "Applicant"means a person applying for a license or a group license under this Article.

(2)        "Assignedemployee" means an employee who is performing services for a clientcompany under a contract between a licensee and a client company in whichemployment responsibilities are shared or allocated. "Assignedemployee" does not include a temporary employee. Individuals who aredirectors, shareholders, partners, and managers of a client company are assignedemployees to the extent the licensee and the client have agreed that thoseindividuals are assigned employees and provided that those individuals meet thecriteria of this subdivision and act as operational managers or perform reviewsfor the client company.

(3)        "Audited GAAPfinancial statement" means a financial statement that is audited by anindependent certified public accountant and presented in accordance withgenerally accepted accounting principles.

(4)        "Clientcompany" or "client" means a person that contracts with alicensee and is assigned employees by the licensee under that contract.

(5)        "Control",including the terms "controlling", "controlled by", and"under common control with" means the direct or indirect possessionof the power to direct or cause the direction of the management and policies ofa person, whether through the ownership of voting securities, by contract otherthan a commercial contract for goods or nonmanagement services, or otherwise.Control is presumed to exist if any natural person directly or indirectly owns,controls, holds with the power to vote, or holds proxies representing tenpercent (10%) or more of the voting securities of any other person. Thispresumption may be rebutted by a showing made in the manner provided by rule ofthe Commissioner. The Commissioner may determine, after furnishing all personsin interest notice and opportunity to be heard and making specific findings offact to support such determination, that control exists in fact,notwithstanding the absence of a presumption to that effect.

(6)        "Financialresponsibility" means the current and expected future condition offinancial solvency sufficient to support a reasonable expectation that anapplicant or licensee can successfully conduct its business without jeopardizingthe interests of its assigned employees, client companies, or the public.

(7)        "Good moralcharacter" means a personal history of honesty, trustworthiness, fairness,a good reputation for fair dealings, and respect for the rights of others andfor state and federal laws.

(8)        "Hazardousfinancial condition" has the same meaning as in G.S. 58‑47‑60(9).

(9)        "Licensee"means a person licensed under this Article to provide professional employerservices. The term includes a professional employer organization group licensedunder G.S. 58‑89A‑35(b). Unless specifically stated otherwise inthis Article, "licensee" includes persons who are licensed under thisArticle pursuant to alternative licensing procedures as set forth in G.S. 58‑89A‑76.

(10)      "Managed services"means services provided by an organization that is the sole employer ofemployees whom it supplies to staff and manage a specific portion of acompany's workforce or a specific facility within a company on an ongoingbasis. The managed services organization has responsibility for ensuring thecapabilities and skills of the employees it supplies or provides, for allemployer functions, for supervisory responsibility over the employees, and formanagement accountability of the facility or function.

(11)      "PEOagreement" means a written contract by and between a client company and aprofessional employer organization that provides:

a.         For the allocationand sharing between the client company and the licensee of the responsibilitiesof employers with respect to the assigned employees, including hiring, firing,and disciplining of employees; and

b.         That the licenseeand the client company assume the responsibilities required by this Article.

(12)      "Person"has the same meaning as in G.S. 58‑1‑5(9).

(13)      "Personnelplacement service" means a job placement service offered through anorganization that assists persons seeking employment to find a job withcompanies that are seeking employees. Companies that hire persons through apersonnel placement service are the sole employers of the persons hired, andthe personnel placement service does not have any responsibility as anemployer.

(14)      "Professionalemployer organization" or "PEO" means a person that offersprofessional employer services and includes "staff leasing servicescompanies", "employee leasing companies", "staff leasingcompanies", and "administrative employers" who offer or proposeto offer professional employer services in this State.

(15)      "Professionalemployer organization group" or "PEO group" means a combinationof professional employer organizations that operates under a group licenseissued under this Article or is otherwise subject to group licensurerequirements under G.S. 58‑89A‑35(b).

(16)      "Professionalemployer services" means an arrangement by which employees of a licenseeare assigned to work at a client company and in which employmentresponsibilities are in fact shared by the licensee and the client company inaccordance with G.S. 58‑89A‑100, the employee's assignment isintended to be of a long‑term or continuing nature, rather than temporaryor seasonal in nature. "Professional employer services" does notinclude services that provide temporary employees or independent contractors, apersonnel placement service, managed services, payroll services that do notinvolve employee staffing or leasing, the sharing of employees by commonlyowned companies within the meaning of section 414(b) and (c) of the InternalRevenue Code of 1986, as amended, or similar groups that do not meet the requirementsof this subdivision.

(17)      "Temporaryemployees" means persons employed under an arrangement by which anorganization hires its own employees and assigns them to a client company tosupport or supplement the client's workforce in a special work situation,including:

a.         An employee absence;

b.         A temporary skillshortage;

c.         A seasonal workload;or

d.         A special assignmentor project. (2002‑168,s. 8; 2004‑162, s. 1; 2007‑127, s. 12.)