S*482 Session 110 (1993-1994)
S*0482(Rat #0186, Act #0169) General Bill, By J.V. Smith, Leatherman, Martin,
McConnell, O'Dell, Passailaigue and Wilson
Similar(H 3689)
A Bill to amend Title 40, Code of Laws of South Carolina, 1976, relating to
professions and occupations by adding Chapter 68 so as to regulate businesses
that offer staff leasing services; and to provide for licensing, fees,
disciplinary action, and penalties.-amended title
03/02/93 Senate Introduced and read first time SJ-4
03/02/93 Senate Referred to Committee on Labor, Commerce and
Industry SJ-4
04/27/93 Senate Committee report: Favorable with amendment Labor,
Commerce and Industry SJ-22
04/28/93 Senate Amended SJ-29
04/28/93 Senate Read second time SJ-29
05/04/93 Senate Read third time and sent to House SJ-12
05/05/93 House Introduced and read first time HJ-11
05/05/93 House Referred to Committee on Labor, Commerce and
Industry HJ-11
05/12/93 House Recalled from Committee on Labor, Commerce and
Industry HJ-27
05/26/93 House Amended HJ-36
05/26/93 House Read second time HJ-51
05/27/93 House Read third time and returned to Senate with
amendments HJ-119
06/01/93 Senate House amendment amended SJ-36
06/01/93 Senate Returned to House with amendments SJ-36
06/01/93 House Concurred in Senate amendment and enrolled HJ-95
06/10/93 Ratified R 186
06/16/93 Signed By Governor
06/16/93 Effective date 06/16/93
06/16/93 See act for exception to or explanation of
effective date
07/21/93 Copies available
(A169, R186, S482)
AN ACT TO AMEND TITLE 40, CODE OF LAWS OF SOUTH
CAROLINA, 1976, RELATING TO PROFESSIONS AND
OCCUPATIONS BY ADDING CHAPTER 68 SO AS TO REGULATE
BUSINESSES THAT OFFER STAFF LEASING SERVICES AND TO
PROVIDE FOR LICENSING, FEES, DISCIPLINARY ACTION, AND
PENALTIES.
Be it enacted by the General Assembly of the State of South Carolina:
Licensing and regulation of staff leasing services; fees, contract
requirements; workers' compensation coverage; violations and
penalties
SECTION 1. Title 40 of the 1976 Code is amended by adding:
"CHAPTER 68
Regulation of Staff Leasing Services
Section 40-68-10. As used in this chapter:
(1) `Applicant' means a business seeking to be licensed under this
chapter or seeking the renewal of a license under this chapter.
(2) `Client company' means a person that contracts with a licensee and
is assigned employees by the licensee under that contract.
(3) `Administrator' means the administrator of the Department of
Consumer Affairs.
(4) `Controlling person' means:
(a) an officer or director of a corporation seeking to offer staff
leasing services, a shareholder holding ten percent or more of the voting
stock of a corporation seeking to offer staff leasing services, or a partner of
a partnership seeking to offer staff leasing services;
(b) an individual who possesses, directly or indirectly, the power to
direct or cause the direction of the management or policies of a company
seeking to offer staff leasing services through the ownership of voting
securities, by contract or otherwise, and who is actively involved in the
day-to-day management of the company; or
(c) an individual employed, appointed, or authorized by a business
seeking to offer staff leasing services to enter into a contractual relationship
with a client company on behalf of the business.
(5) `Department' means the South Carolina Department of Consumer
Affairs.
(6) `Licensee' means a person licensed under this chapter to provide
staff leasing services. The term includes a staff leasing services group
licensed under Section 40-68-80.
(7) `Person' means an individual, association, corporation, partnership,
or other private legal entity.
(8) `Staff leasing services' means an arrangement by which employees
of a licensee are assigned to work at a client company and in which
employment responsibilities are shared by the licensee and the client
company. The employee's assignment is intended to be of a long-term or
continuing nature, rather than temporary or seasonal in nature, and a
majority of the work force at a client company worksite or a specialized
group within that work force consists of assigned employees of the
licensee. This does not include family-related businesses or similar groups
that do not meet the requirements of item (8). Staff leasing services does
not include temporary employees.
(9) `Staff leasing services company' means an individual business
entity that offers staff leasing services.
(10) `Staff leasing services group' means a combination of staff
leasing services companies that operates under a group license issued under
Section 40-68-80.
(11) `Assigned employee' means a person performing services for a
client company as affected by a contract between a licensee and client
company in which employment responsibilities are shared.
(12) `Entire work force' means all persons engaged by a client
company and are employees as defined in Title 42 including persons
considered employees under Sections 42-1-400, 42-1-410, and
42-1-420.
Section 40-68-20. The department shall adopt regulations necessary to
administer this chapter. Regulations must be adopted in compliance with
the Administrative Procedures Act. A licensee is governed and controlled
by this chapter and the regulations adopted by the department.
Section 40-68-30. (A) A person may not engage in or offer staff leasing
services in this State without holding a license issued under this chapter. A
person that desires a staff leasing services company license shall file with
the department a written application accompanied by an application fee of
one hundred dollars for each controlling person. In addition, the
application fee is two hundred dollars for each staff leasing services
company, and three hundred dollars for each staff leasing services
group.
(B) The department may require an applicant for a license to provide
information and certifications to determine whether the applicant meets the
licensing requirements of this chapter and also whether individuals
affiliated with the applicant are qualified to serve as controlling
persons.
(C) An application for a staff leasing services group license under
Section 40-68-80 must provide the information required by this chapter for
each member of the group. An applicant or licensee is ineligible for a
license for one year after the date of final departmental action on the denial
or revocation of a license applied for or issued under this chapter. This
restriction does not apply to a denial or revocation of a license if the basis
of the action was:
(1) an inadvertent error or omission in the application if that error or
omission is promptly corrected;
(2) the experience documented to the department was insufficient at
the time of the previous application;
(3) the department was unable to complete the criminal background
investigation required under Section 40-68-40 because of insufficient
information received from a local, state, or federal law enforcement agency;
or
(4) that one or more of the controlling persons affiliated with the
applicant or licensee was determined by the department to be unsuitable, if
that unsuitable controlling person has in fact ceased to be a controlling
person of the applicant or license.
Section 40-68-40. (A) To be qualified to serve as a controlling person
of a license under this chapter, a person must be at least eighteen years of
age, be of good moral character, and have educational, managerial, or
business experience relevant to:
(1) operation of a business entity offering staff leasing services; or
(2) services as a controlling person of a staff leasing services
company.
For the purposes of this section, `good moral character' means a personal
history of honesty, trustworthiness, fairness, a good reputation for fair
dealing, and respect for the rights of others and for the laws of this State
and nation.
(B) The department shall conduct a background investigation of each
individual applicant and of each controlling person of each applicant to
determine whether the applicant or controlling person is qualified under
this chapter. The department may deny an application for the issuance or
renewal of a license if it finds that a controlling person is not qualified
under this chapter. The investigation may include:
(1) the submission of fingerprints for processing through appropriate
local, state, and federal law enforcement agencies; and
(2) examination by the department of police or other law enforcement
records maintained by local, state, or federal law enforcement agencies.
(C) Conviction of a crime does not automatically disqualify a
controlling person, require the revocation of a license, or require the denial
of an application for a new or renewed license.
(D) A licensee shall maintain a registered agent for the service of
process in this State.
(E) An applicant for an original or renewal license must demonstrate a
net worth of at least fifty thousand dollars. The applicant shall demonstrate
the net worth to the department by providing the department with the
applicant's audited financial statement. The net worth requirement also may
be satisfied through guarantees, letters of credit, or other security
acceptable to the department in a combined total amount of at least fifty
thousand dollars. A guaranty is not acceptable to satisfy this subsection
unless the applicant submits sufficient evidence to satisfy the department
that the guarantor has adequate resources to satisfy the obligations of the
guaranty. For applicants operating a staff leasing services company or staff
leasing services group on or before January 1, 1991, the net worth
requirement will be satisfied by the documentation of a positive net
worth.
(F) A document submitted to establish net worth must reflect the net
worth as of a date not earlier than six months before the date on which the
application is submitted, and must be prepared by a certified public
accountant. Information supplied regarding net worth is proprietary and
confidential and is exempt from disclosure to third parties.
Section 40-68-50. (A) An applicant for an original or renewal license
shall pay to the department on the issuance of the license or license renewal
a fee. License fees are assessed as follows:
(1) in the first year of the biennium:
(a) two thousand dollars for a resident staff leasing services
company;
(b) four thousand dollars for a resident staff leasing services
group;
(c) two thousand dollars for a nonresident staff leasing services
company. However, if the state of residency of the nonresident leasing
company imposes a greater fee for licensing nonresident applicants, then
the greater fee is assessed. The maximum fee to be charged is five thousand
dollars for a nonresident staff leasing services company;
(d) four thousand dollars for each nonresident staff leasing services
group. However, if the state of residency of the nonresident staff leasing
services group imposes a greater fee for licensing nonresident applicants,
then the greater fee is assessed. The maximum fee to be charged is ten
thousand dollars for each nonresident staff leasing services group;
(2) in the second year of the biennium:
(a) one thousand dollars for each resident staff leasing services
company;
(b) three thousand, five hundred dollars for each resident staff
leasing services group;
(c) one thousand dollars for a nonresident staff leasing services
company. However, if the state of residency of the nonresident leasing
company imposes a greater fee for licensing nonresident applicants, then
the greater fee is assessed. The maximum fee to be charged is two
thousand, five hundred dollars for a nonresident staff leasing services
company;
(d) three thousand, five hundred dollars for each nonresident staff
leasing services group. However, if the state of residency of the
nonresident staff leasing services group imposes a greater fee for licensing
nonresident applicants, then the greater fee is assessed. The maximum fee
to be charged is five thousand dollars for each nonresident staff leasing
services group;
(3) for renewal licenses:
(a) fifteen hundred dollars for a staff leasing services company;
(b) three thousand dollars for a staff leasing services group;
(c) fifteen hundred dollars for a nonresident staff leasing services
company. However, if the state of residency of the nonresident leasing
company imposes a greater fee for licensing nonresident applicants, then
the greater fee is assessed. The maximum fee to be charged is three
thousand, seven hundred fifty dollars for a nonresident staff leasing
services company;
(d) three thousand dollars for each nonresident staff leasing services
group. However, if the state of residency of the nonresident staff leasing
services group imposes a greater fee for licensing nonresident applicants,
then the greater fee is assessed. The maximum fee to be charged is seven
thousand, five hundred dollars for each nonresident staff leasing services
group.
(B) In addition to the license fee, the department may levy a biennial
assessment for each staff leasing services company and each staff leasing
services group sufficient to cover all costs for regulation of the profession
pursuant to this chapter and other applicable provisions of law. The
biennial assessment fee is:
(1) due and payable upon initial licensure and subsequent renewals
and one year before the expiration of any licensure period; and
(2) based on the gross South Carolina payroll, excluding tips and
gratuities, of a staff leasing services company's or staff leasing services
group's clients during the period beginning nine quarters before and ending
one quarter before each assessment;
(3) calculated in accordance with the following table:
Amount of Gross Assessment Fee
South Carolina Payroll Due
less than $500,000 $500
$500,001 - $1,000,000 $750
$1,000,001 - $2,500,000 $1,000
$2,500,001 - $5,000,000 $1,250
$5,000,001 - $10,000,000 $1,750
$10,000,001 - $15,000,000 $2,250
$15,000,001 - $25,000,000 $3,000
$25,000,001 - $50,000,000 $3,750
over $50,000,000 $4,000
(C) In order to ensure compliance with the requirements of subsection
(B), each licensee annually shall submit a statement of total gross South
Carolina payroll, excluding tips and gratuities, along with copies of all
South Carolina Unemployment Compensation tax returns for the preceding
calendar year.
(D) The total licensure fee and biennial assessments during a licensure
period must not exceed:
(1) eight thousand, seven hundred fifty dollars for a staff leasing
services company license; or
(2) ten thousand dollars for a staff leasing services group license
issued under Section 40-68-90 of this chapter.
Section 40-68-60. (A) A licensee shall establish the terms of a staff
leasing services agreement by a written contract between the licensee and
the client company. The licensee shall give written notice of the agreement
as it affects assigned employees to each employee assigned to a client
company in the manner provided in this section.
(B) A written explanation of the agreement must be provided to each
assigned employee by delivering it to the employee personally. The
explanation shall state, substantially, the terms of the agreement between
the licensee and client company and include the same notice which is
required to be posted in the client company's place of business.
(C) The client company shall post in each of its places of business in a
conspicuous place that is in clear and unobstructed view of the assigned
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
notify immediately (insert name of staff leasing company, address, and
telephone number) or (name of client company, address, and telephone
number). 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.'
(D) As between the client company, the staff leasing company, and the
employee, the notice to or acknowledgment of the occurrence of an injury
on the part of the client company or the staff leasing company is notice to
or knowledge on the part of the staff leasing company and its workers'
compensation insurer or the client company and its workers' compensation
insurer, or both.
Section 40-68-70. (A) A contract between a licensee and a client
company must provide that the licensee:
(1) reserves the right of direction and control over employees assigned
to a client company.
(2) assumes responsibility for the payment of wages to the assigned
employees without regard to payments by the client to the licensee;
(3) assumes responsibility for the payment of payroll taxes and
collection of taxes from payroll on assigned employees;
(4) retains the right to hire, fire, discipline, and reassign the assigned
employees;
(5) retains 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 on joint
agreement by the client company and the licensee; and
(6) agrees that:
(a) notice to or acknowledgment of the occurrence of an injury on
the part of the client company is notice to or knowledge on the part of the
licensee and its workers' compensation insurer;
(b) for the purposes of Title 42, the jurisdiction of the client
company is the jurisdiction of the licensee and its workers' compensation
insurer;
(c) the licensee and its workers' compensation insurer is bound by
and subject to the awards, judgments, or decrees rendered against them
under the provisions of Title 42; and
(d) insolvency, bankruptcy, or discharge in bankruptcy of the
licensee or client company does not relieve the licensee, client company,
their respective workers' compensation insurers from payment of
compensation for disability or death sustained by an employee during the
life of a workers' compensation insurance policy; and
(7) with a client company, in the contract, shall specify whether the
licensee, the client company, or both, are securing workers' compensation
liability.
(B) A licensee, who secures workers' compensation insurance for a
client company before the execution of the contract and on an annual basis,
shall conduct a good faith investigation of the client company's business.
The investigation must determine if the client company engages any
nonassigned employees, including those considered employees under Title
42 in any part of the client company's trade, business, or occupation. Upon
a determination that a client company's entire work force includes
nonassigned employees, the contract must require the client company to
secure and maintain workers' compensation insurance.
(C) Upon the failure or neglect of a client company to secure and
maintain workers' compensation insurance, the licensee and its workers'
compensation carrier agree and are liable to pay to a worker employed in
the work of the client company compensation under Title 42 which the
licensee would have been liable to pay if the worker had been employed by
the licensee as provided in Section 40-68-120.
(D) A licensee's workers' compensation insurer providing coverage to a
client company's assigned employees must be provided the information
derived from the licensee's investigation of the client company's
business.
(E) The licensee is the employer of the employees assigned to a client
company. The rights and remedies granted by Title 42 to an employee
when he and the licensee have accepted the provisions of Title 42 to pay
and accept compensation exclude all other rights as provided in Section
42-1-540. This chapter does not affect the rights, duties, or liabilities of
licensees, client companies, or employees under federal law.
Section 40-68-75. (A) An employer subject to the provisions of Title 42
who contracts with a staff leasing services company or group continues to
be subject to the provisions of Title 42 and shall comply with Title 42 with
regard to procuring and maintaining workers' compensation insurance for
nonassigned employees. For purposes of construction, the term
`employees' in Section 42-1-360 includes both assigned and nonassigned
employees.
(B) A client company who refuses or neglects to provide workers'
compensation insurance coverage to its nonassigned employees must be
fined one thousand dollars a day for each nonassigned employee for each
day the client company refuses or neglects to provide workers'
compensation insurance. In this event, the client company is liable during
the continuance of the refusal or neglect to an employee either for
compensation under Title 42 or in an action at law instituted by the
employee or his personal representative against the client company to
recover damages for personal injury or death by accident. In the action at
law, the client company may not be permitted to defend upon any of the
grounds mentioned in Section 42-1-510 nor shall Section 42-1-540 apply.
The fine provided in this section must be assessed by the Workers'
Compensation Commission in an open hearing with the right of review and
appeal as in other cases.
Section 40-68-80. A group of at least two but not more than five staff
leasing services companies that are majority-owned by the same entity may
be licensed as a staff leasing services group. A staff leasing services group
may satisfy the reporting and financial requirements of the chapter on a
consolidated basis. As a condition of the issuance of a staff leasing services
group license, each person that is a member of the group must guarantee
payment of all financial obligations of other members of the group.
Section 40-68-90. (A) The department may issue a restricted license to
a nonresident staff leasing services company or staff leasing services group
for limited operation within this State under the following conditions if
the:
(1) applicant's state of residence provides for licensing of staff leasing
services companies, the applicant is licensed and in good standing in its
state of residence, and the applicant's state of residence grants a similar
privilege for restricted licensing to staff leasing services companies or staff
leasing services groups that are residents in South Carolina;
(2) applicant does not maintain an office, sales force, or
representatives in this State, and it does not solicit clients that are residents
in this State; and
(3) applicant does not have more than forty leased employees working
in this State.
(B) An applicant for a restricted license is exempt from the
requirements of Section 40-68-40(C) and (F).
(C) An applicant for a nonresident or restricted license shall file on a
form approved by the department an appointment of a recognized and
approved entity as its attorney to receive service of legal process issued
against it in this State.
Section 40-68-100. The department shall issue a license to an applicant
that meets the requirements of this chapter. The license must be issued not
later than the ninetieth day after the date on which the completed
application is filed with the department. A license issued by the department
under this chapter is valid for two years. The department shall renew a
license on receipt of a renewal application approved by the department and
payment of the required renewal fees.
Section 40-68-110. (A) A licensee shall disclose to the department,
each client company, and its assigned employees, information relating to
any insurance or benefit plan provided for the benefit of its assigned
employees. The information must include:
(1) the type of coverage;
(2) the identity of each insurer for each type of coverage;
(3) the amount of benefits provided for each type of coverage and to
whom or on whose behalf benefits are to be paid;
(4) the policy limits on each insurance policy; and
(5) whether the coverage is fully insured, partially insured, or fully
self-funded.
(B) The administrator by regulation may require the filing by licensees
of other reports necessary to the implementation of this chapter.
Section 40-68-120. (A) A licensee may elect to obtain workers'
compensation insurance coverage in the same manner as any other
employer as provided below:
(1) An insurer issuing the policy must be licensed in this State to write
such policies.
(2) An insurer issuing a policy of workers' compensation insurance to
a licensee may not plead as a defense:
(a) that the client company is not subject to Title 42. The insurer is
estopped to deny coverage;
(b) lack of an employment relationship between a person engaged in
an employment as defined in Title 42 and the client company;
(c) breach of contract by the licensee or client company. The insurer
is not entitled to plead as a defense to an employee's claim for benefits any
defects in the performance of a contract between the licensee and client
company.
(3) No policy of insurance against liability arising under Title 42 may
be issued to a licensee unless it contains the agreement of the insurer that it
will promptly pay to the persons entitled to them all benefits conferred by
Title 42 and all installments of the compensation that may be awarded or
agreed upon and that the obligation is not affected by default of the licensee
or client company or by default in giving notice required by the policy or
otherwise.
(4) A policy of insurance issued to a licensee is, and must be
construed as, a direct promise by the insurer to the person entitled to
compensation enforceable in his name.
(5) The insurer agrees that:
(a) notice to or acknowledgment of the occurrence of an injury on
the part of the client company is notice to or knowledge on the part of the
licensee and its workers' compensation insurer;
(b) for purposes of Title 42, the jurisdiction of the client company is
the jurisdiction of the licensee and its workers' compensation insurer;
(c) the licensee and its workers' compensation insurer, in all things,
are bound by and subject to the awards, judgments, or decrees rendered
against them under the provisions of Title 42; and
(d) insolvency, bankruptcy, or discharge bankruptcy of the licensee
or client company does not relieve the workers' compensation insurer from
the payment of compensation for disability or death sustained by an
employee during the life of a workers' compensation insurance policy
issued to the licensee.
(6) No agreement by an employee to pay a portion of a premium paid
by the licensee or client company to an insurer or to contribute to a benefit
fund or department maintained by a licensee or client company for the
purpose of providing insurance under Title 42 is valid, and any licensee or
client company who makes a deduction for the purpose from the pay of an
employee entitled to benefits under Title 42 is guilty of a misdemeanor and,
upon conviction, must be fined not more than one thousand dollars plus
reimbursement to the employee of the deductions.
(7) When a person referred to as a licensee undertakes to provide
assigned employees to a client company, the licensee is liable to pay a
worker employed by the client company compensation under Title 42
which the licensee would have been liable to pay if the worker had been
immediately employed by the licensee. When the licensee is liable to pay
compensation under this section, it is entitled to indemnity from a client
company who would have been liable to pay compensation to the worker
independently of this section and have a cause of action therefor. This
section must be construed to require that licensee's workers' compensation
carrier is liable to pay compensation to the client company's entire work
force with the licensee and carrier's right to indemnity from the client
company.
(B) If workers' compensation coverage is obtained, that insurance must
comply with the applicable provisions of the insurance laws of this
State.
(C) A licensee is entitled to the same rights to obtain all types of
insurance coverage, including endorsements obtained by other business
entities doing business in this State.
(D) For companies who have obtained workers' compensation insurance
coverage in the residual (assigned risk) market, the first three years that a
client company has a contract with a licensee, the licensee shall pay
workers' compensation insurance premiums based on the experience
modification rate of the client company. The South Carolina Department of
Insurance shall adopt regulations to implement this subsection. This
subsection applies only to the residual (assigned risk) market.
(E) The licensee must categorize leased employees according to their
classification within a client company.
(F) A licensee may sponsor and maintain employee benefit plans for the
benefits of assigned employees. The employee benefit plans must comply
with the applicable provisions of the insurance laws of this State. A client
company may include assigned employees in a benefit plan sponsored by
the client company. However, no licensee may sponsor and maintain a plan
of self-insurance for health benefits or workers' compensation benefits after
January 1, 1994.
(G) A staff leasing services company or staff leasing services group is
responsible for the payment of unemployment taxes pursuant to law.
(H) Licensees, within thirty days, shall notify the South Carolina
Employment Security Commission of the start and termination of the
licensee's relationship with a client company.
Section 40-68-130. (A) The department by regulation shall determine
the form and content of:
(1) the licenses issued under this chapter; and
(2) notices required to be posted under this section.
(B) The license issued under this chapter must be posted in a
conspicuous place in the principal place of business in this State of the
licensee. The licensee shall display, in a place that is in clear and
unobstructed public view, a notice stating that the business operated at the
location is licensed and regulated by the department and that any questions
or complaints should be directed to the department.
Section 40-68-140. (A) A licensee may not conduct business under a
name other than that specified in the license. A license issued under this
chapter is not assignable. A licensee may not conduct business under any
fictitious or assumed name without prior written authorization from the
department. The department may not authorize the use of a name that is so
similar to that of a public office or agency or to that of another licensee that
the public may be confused or misled by its use. A licensee may not
conduct business under more than one name unless it has obtained a
separate license for each name.
(B) A licensee may change its licensed name at any time by notifying
the department and paying a fee for each change of name. The department
by regulation shall set the fee for each name change in an amount not to
exceed fifty dollars. A licensee may change its name on renewal of the
license without the payment of the name change fee.
(C) A licensee must notify the department in writing of:
(1) a change in the location of its primary business office;
(2) the addition of more business offices; or
(3) a change in the location of business records maintained by the
licensee.
Section 40-68-150. (A) A person may not:
(1) engage in staff leasing services without holding a license under
this chapter as a staff leasing services company or a staff leasing services
group;
(2) use the name or title `staff leasing services company', `licensed
staff leasing services company', `licensed staff leasing services group', or
`staff leasing services group', or otherwise represent that it is licensed under
this chapter, unless the entity holds a license issued under this chapter;
(3) represent as the person's own the license of another person or
represent that a person is licensed if the person does not hold a license;
(4) give false or forged evidence to the department in connection with
obtaining or renewing a license or in connection with disciplinary
proceeding under this chapter; or
(5) use or attempt to use a license which has expired or been
revoked.
(B) A person who wilfully and voluntarily violates the provisions of this
section is guilty of a misdemeanor and, upon conviction, must be
imprisoned not more than one year or fined not more than fifty thousand
dollars, or both.
Section 40-68-160. (A) For the purposes of this section, `conviction'
includes a plea of guilty or nolo contendere or a finding of guilt.
Disciplinary action may be taken against a licensee by the department on
any of the following grounds:
(1) the conviction of a licensee or a controlling person of a licensee of
bribery, fraud, or intentional or material misrepresentation in obtaining,
attempting to obtain, or renewing a license;
(2) the conviction of a licensee or a controlling person of a licensee of
a crime that relates to the operation of a staff leasing service or the ability
of the licensee or a controlling person of a licensee to operate a staff leasing
service;
(3) the conviction of a licensee or a controlling person of a licensee of
a crime that relates to the classification, misclassification, or
under-reporting of employees under the South Carolina Workers'
Compensation Act;
(4) the conviction of a licensee or a controlling person of a licensee of
a crime that relates to the establishment or maintenance of a self-insurance
program, whether health insurance, workers' compensation insurance, or
other insurance;
(5) the conviction of a licensee or a controlling person of a licensee of
a crime that relates to fraud, deceit, or misconduct in the operation of a staff
leasing service;
(6) engaging in staff leasing services without a license;
(7) transferring or attempting to transfer a license issued under this
chapter;
(8) violating this chapter or any order or regulation issued by the
department under this chapter;
(9) failing to notify the department, in writing, of the felony
conviction of a controlling person not later than the thirtieth day after the
date on which that conviction is entered;
(10) failing to cooperate with an investigation, examination, or audit of
the licensee's records conducted by the licensee's insurance company or its
designee, as provided by the insurance contract or as authorized by law by
the South Carolina Department of Insurance;
(11) failing to notify the department and the South Carolina
Department of Insurance not later than the thirtieth day after the effective
date of a change in ownership, principal business address, or the address of
accounts and records;
(12) failing to correct a tax filing or payment deficiencies within a
reasonable time as determined by the department;
(13) refusing, after reasonable notice, to meet reasonable health and
safety requirements within the licensee's control and made known to the
licensee by a federal or state agency;
(14) failing to correct a delinquency in the payment of the licensee's
insurance premiums within a reasonable time;
(15) failing to correct a delinquency in the payment of an employee
benefit plan premiums or contributions within a reasonable time; or
(16) knowingly making a material misrepresentation to an insurance
company, to the department, or other governmental agency.
(B) Upon finding that a licensee has violated one or more provisions of
this section, the department may:
(1) deny an application for a license;
(2) revoke, restrict, or refuse to renew a license;
(3) may impose an administrative penalty in an amount not less than
one thousand dollars for each violation, but not more than fifty thousand
dollars;
(4) issue a reprimand; or
(5) place the licensee on probation for the period and subject to
conditions that the department specifies.
(C) On revocation of a license, the licensee immediately shall return the
revoked license to the department.
(D) Disciplinary action, a denial of an application for a new or renewal
license or a revocation of a license, or a determination that a controlling
person is unqualified may occur subject to the Administrative Procedures
Act, with notice to, and an opportunity for a hearing by, the affected
applicant, licensee, or controlling person.
(E) If a license is revoked or renewal is denied, the affected licensee
may request a reinstatement hearing after a minimum of one year. The
department may reinstate or renew the license only if the cause of the
nonrenewal or revocation has been corrected.
Section 40-68-170. All fees collected by the department under this
chapter must be used to implement its provisions.
Section 40-68-180. This chapter does not exempt a client of a licensee
or an assigned employee from any other license requirements imposed
under local, state, or federal law. An employee who is licensed, registered,
or certified under law and who is assigned to a client company is an
employee of the client company for the purpose of that license, registration,
or certification, but otherwise remains the employee of the licensee as
provided in this chapter. Nothing in this chapter affects the South Carolina
Employment Security Law (Sections 41-27-10 through
41-41-50)."
Time effective
SECTION 2. This act takes effect upon approval by the Governor.
However, a person is not required to hold a license under this act to provide
staff leasing services until September 30, 1993. The first licensing period
under this act runs from September 30, 1993, until September 30, 1995, and
thereafter each biennium shall end on September 30 of every odd-numbered
year.
Approved the 16th day of June, 1993. |