336.234 Limitations on professional employer agreements -- Covered employees
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/ky/336-234A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
deemed employees of clients for tax credits or economic incentives -- Use of
professional employer organization services not to impact company status in
business with state or political subdivisions.
(1)Nothing in any professional employer agreement, or in KRS 336.230 to 336.250,
shall:
(a)Affect, modify, or amend any collective bargaining agreement, or the rights
or obligations of any covered employee, client, or professional employer
organization, covered by the federal Railway Labor Act or the National Labor
Relations Act;
(b)Affect, modify, or amend any contractual relationship or restrictive covenant
between a covered employee and any client in effect at the time a professional
employer agreement becomes effective or any contractual relationship or
restrictive covenant that is entered into subsequently between a client and a
covered employee. A professional employer organization shall have no
responsibility in connection with, or arising out of, any existing or new
contractual relationship or restrictive covenant between the covered employee
and client unless the professional employer organization has specifically
agreed otherwise in writing;
(c)Diminish, abolish, or remove rights of covered employees to a client or
obligations of the client to a covered employee existing prior to the effective
date of the professional employer agreement;
(d)Create any new or additional enforceable right of a covered employee against
a professional employer organization that is not specifically provided by the
professional employer agreement or KRS 336.230 to 336.250;
(e)Affect, modify, or amend any state, local, or federal licensing, registration, or
certification requirement applicable to any client or covered employee. A
covered employee who must be licensed, registered, or certified according to
statute or regulation is deemed solely an employee of the client for purposes
of any such license, registration, or certification requirement. A professional
employer organization shall not be deemed to engage in any occupation, trade,
profession, or other activity that is subject to licensing, registration, or
certification requirements, or is otherwise regulated by a governmental entity,
solely by entering into and maintaining a co-employment relationship with a
covered employee who is subject to the requirements or regulations. A client
shall have the sole right of direction and control of the professional or licensed
activities of a covered employee and of the client's business. Covered
employees and clients shall remain subject to regulation by the regulatory
agency responsible for licensing, registration, or certification of the covered
employees or clients; or
(f)Include language in a professional employer agreement or be construed in
KRS 336.230 to 336.250 to abrogate any constitutional, statutory, or common
law cause of action of persons not a party to the professional employer
agreement.
(2)For purposes of determining tax credits or other economic incentives provided by
the Commonwealth based on employment, covered employees shall be deemed
employees solely of the client. A client shall be entitled to the benefit of any tax
credit, economic incentive, or other benefit arising as the result of the employment
of a covered employee of the client. Notwithstanding that the professional employer
organization is the federal form W-2 wage and tax statement reporting employer,
the client shall continue to qualify for the tax credit, economic incentive, or benefit.
If the grant or amount of any incentive is based on the number of employees, then
each client shall be treated as employing only those covered employees that are co-
employed by each client. Covered employees working for other clients of the
professional employer organization shall not be counted. Each professional
employer organization shall provide, upon request by a client or any state agency
responsible for administration of any tax credit, economic incentive, or benefit,
information reasonably required to support any request, claim, application, or any
other action by a client seeking the tax credit, economic incentive, or benefit,
including wage information, and locations and duties of covered employees.
(3)With respect to a bid, contract, purchase order, or agreement entered into with the
Commonwealth or any political subdivision of the Commonwealth, a client
company's status or certification as a small, minority-owned, disadvantaged, or
woman-owned business enterprise or as a historically underutilized business shall
not be affected because the client company has entered into an agreement with or
uses the services of a professional employer organization.