30 CMR 5.07 - 5.13: Employee Leasing

5.07 Purpose

The purpose of 430 CMR 5.07 through 430 CMR 5.13, inclusive is to establish procedures regarding reporting requirements for employee leasing companies and their clients.

5.08 Scope and Applicability

430 CMR 5.07 through 5.13 apply to employee leasing companies and their clients.

5.09 Definitions

The following words and phrases shall have the following meanings, unless otherwise clearly indicated by the context of 430 CMR 5.07 - 5.13: Client Company: an individual, association, partnership, corporation or other business entity that agrees to or is leasing its employees through an employee leasing company on a long-term basis.

Commissioner: Commissioner of the Department of Unemployment Assistance

Division: the Department of Unemployment Assistance

Employee Leasing Company: an employing unit that contracts with a client company to supply workers to perform services for the client company; provided that, the term employee leasing company does not include private employment agencies that provide workers to employers on a temporary help basis or entities such as driver-leasing companies which lease employees to an employing unit to perform a specific service.

Employer: any employing unit subject to M.G.L. c. 151A

Employing Unit: a sole proprietorship, partnership, corporation or other form of business entity which has one or more individuals performing services for wages within the Commonwealth.

5.10 Reporting Requirements

(1) Each employee leasing company doing business in the Commonwealth shall register with the Department in accordance with the instructions printed on the forms issued by the Department.

(2) Each employing unit intending to contract with an employee leasing company for the supply of workers shall notify the Department at least 60 days prior to the next due date for the payment of unemployment insurance contributions. Such notice, signed by such employing unit, may be transmitted to the Division by the employee leasing corporation.

(3) Any employer which terminated a contract with the employee leasing company must notify the Department of such termination within 30 days following the termination of the contract.

(4) Employee leasing companies shall provide theDepartment a list of their client companies annually on or before December 31 of each year. Such list shall include the client's name, address, employer account number and federal identification number (FEIN).

(5) Employee leasing companies shall notify the Department when a client company establishes or terminates a contract with them within 30 days of such event. Such notice shall include the employer's name, address, employer account number and FEIN.

(6) Properly registered employee leasing companies, whose client companies have notified the Department, may file quarterly contribution reports and pay contributions on behalf of their clients, and may also file Health Insurance reports and pay unemployment health insurance contributions on behalf of their clients; provided, that such reports and contributions are paid for all employees of their client companies.

(7) Each employee leasing company shall report and pay contributions under the employer account number and at the experience rate assigned to the client company by the Department. New employers, or those who have not previously registered with the Department, shall establish their own employer account number by filing an Employer Status Report with the Department.

(8) Each employee leasing company shall keep payroll records in such a manner that separate records can be produced for employees of its client companies.

5.11 Benefit Charges

The Department shall charge unemployment insurance benefits against the client company's account in accordance with the provisions of M.G.L. c. 151A. The Department shall mail notice of benefits charged to client accounts to the employee leasing company following the close of the month in which such benefits were paid.

5.12 Experience Rates

The Department shall establish annually experience rates for the client companies based on their individual status as an employer. Employee leasing companies, in compliance with the notice provision of 430 CMR 5.00, may be provided with rate information for properly registered client companies.

5.13 Miscellaneous

(1) Employing units for whom services for wages are performed will be considered the employer of the worker.

(2) Except where inconsistent with 430 CMR 5.00 all other rules and regulations of the Department shall apply to the employee leasing companies and client companies.

(3) Employee leasing companies and client companies shall comply with the procedures prescribed by the Commissioner.

Regulatory Authority

430 CMR 5.01: M.G.L. c. 23, s. 9J; c. 151A, §. 1, 2, 6, 8(b), 13, 14, 14A, 14(f), 14(d)(3), 14(n)(1), 38(a), 38(b) and 45.