South Dakota Administrative Rules
Title 64 - REVENUE
Article 64:06 - Sales tax
Chapter 64:06:02 - Services - Interpretive rules
Section 64:06:02:89 - Professional employer organization - Definition of co-employment relationship
Current through Register Vol. 50, page 114, March 25, 2024
A co-employment relationship results from a contract between a professional employer organization and a client company. In order for a co-employment relationship to exist, the contract must stipulate that:
(1) The professional employer organization assumes the responsibilities listed in this subdivision, including the payment of wages, salaries, payroll taxes, payroll deductions, workers compensation costs, insurance premiums, welfare benefits, and retirement benefits, and preparing and filing necessary tax returns and other documents as required by state or federal law;
(2) The client company must be the employer to any existing employees prior to the contractual relationship with the professional employment organization;
(3) The client company retains primary control over the hiring, firing, wage rates, salary increases, training, and directing the day-to-day activities of the co-employees;
(4) If the contractual relationship between the professional employer organization and the client company is terminated, then the co-employees' employment with the professional employer organization is also terminated;
(5) If a co-employee leaves the employment of the client company, that co-employee's employment is terminated with the professional employer organization; and
(6) The professional employment organization does not manage or direct the operation of the client company's business.
General Authority: SDCL 10-45-47.1(3).
Law Implemented: SDCL 10-45-97.
