§ 52-04-24 — Staffing services - Payment of unemployment insurance taxes

North Dakota § 52-04-24

• Jurisdiction: North Dakota
• Title 52: Social Security
• Ch. 52-04: Contributions

Text

1. If a staffing service exclusively provides temporary staffing services, the staffing
service is considered to be the employee's employer and the staffing service shall pay
unemployment insurance taxes at the staffing service's unemployment insurance tax
rate. If a staffing service provides temporary and long-term employee staffing services,
the staffing service is subject to the reporting and tax requirements associated with the
type of employee provided to the client company.
2. For the purposes of long-term employee staffing services provided by a staffing
service, the staffing service shall:
a. Report quarterly the wages of all employees furnished to each client company
and pay taxes on those wages at the client company's unemployment insurance
tax rate, except as otherwise provided under subsection 3.
b. Maintain complete and separate records of the wages paid to employees
furnished to each of the client companies. Claims for benefits must be separately
identified by the staffing service for each client company.
c. Notify the agency of each client company's name and unemployment insurance
account number and the date the staffing service began providing services to the
client company. The staffing service shall provide the agency with the information
required under this subdivision upon entering an agreement with a client
company, but no later than fifteen days from the effective date of the written
agreement.
d. Supply the agency with a copy of the agreement between the staffing service and
the client company.
e. Notify the agency upon termination of any agreement with a client company, but
no later than fifteen days from the effective date of the termination.
f. Share employer responsibilities with the client company, including retention of the
authority to hire, terminate, discipline, and reassign employees. If the contractual
agreement between the staffing service and a client company is terminated, the
employees become the sole employees of the client company.
3. For the purposes of long-term employee staffing services provided by a staffing
service, upon authorization of the agency, the staffing service may be considered to be
the employee's employer and the staffing service shall pay unemployment insurance
taxes at the staffing service's unemployment insurance tax rate. The agency may not
make an authorization under this subsection unless one of the following requirements
is met:
a. In the case of a client company unemployment insurance tax rate that is higher
than the staffing services tax rate:

(1) The staffing service:
(a) Calculates the difference between the staffing service's tax rate and
the client company's tax rate;
(b) Applies the difference to the wages to be earned by the employees
furnished to the client company in the following completed calendar
quarter; and
(c) Notifies the agency that such application would, if the staffing service's
tax rate were applied to those same wages, cause a reduction in the
tax due on those wages which does not exceed five hundred dollars.
(2) If the reduction under paragraph 1 exceeds five hundred dollars, at the
written request of the staffing service, the agency may make a written
determination that it is appropriate to allow the staffing service to use the
staffing service's unemployment insurance tax rate. The agency shall
respond to a request under this paragraph within fifteen days of receiving all
required information.
b. The staffing service includes in its contract with the client company a requirement
that if the client company's unemployment insurance tax rate is higher than the
staffing service's tax rate, the client will arrange to make payment to the agency,
pursuant to subsection 4 of section 52-04-06, in the amount necessary to cause
the client company's unemployment insurance tax rate should it be recomputed
to be determined by the agency to be equivalent to the staffing service's
unemployment insurance tax rate. Before the agency makes an authorization
under this subdivision, the agency actually must receive payment of the amount
required to cause the determination that the client company has complied with
this subdivision.
c. The staffing service demonstrates to the agency that the staffing service has
entered an agreement with a client company that has an unemployment
insurance tax rate that is, at the time of execution of the contract, equal to or
lower than the staffing service's tax rate.
4. If a staffing service enters a contract with a client company that has an unemployment
insurance tax rate that is lower than the staffing service's tax rate, the agency shall
determine the following year's tax rate for the staffing service by calculating a blended
reserve ratio using the proportion of that client company's total wages paid for up to
the previous six years to the total wages paid for up to the previous six years for all of
that staffing service's client companies whose furnished workers are considered the
staffing service's employees for unemployment insurance tax purposes pursuant to
subsection 3.
5. Both a staffing service and client company are considered employers for the purposes
of this title. Both parties to a contract between a staffing service and a client company
are jointly liable for delinquent unemployment insurance taxes, and the agency may
seek to collect such delinquent taxes, and any penalties and interest due, from either
party. The agency shall send notices of rate determinations annually to the staffing
service. This chapter does not modify or impair any other provisions of the contract
between the staffing service and the client company not relating to the requirements of
this subsection concerning liability for payment of taxes on the wages paid to workers
furnished by the staffing service to the client company, and the means of determining
the tax rate to be applied to those wages. Any report that relates to the Federal
Unemployment Tax Act [68A Stat. 439; 26 U.S.C. 3301 et seq.] which is required to be
submitted to the federal internal revenue service regarding a staffing service must be
submitted with the employer identification number of the staffing service.
6. The agency shall determine whether a person is a staffing service. If the agency
determines a person is a staffing service, the agency may further determine if the
person is a temporary staffing service. The agency's determination must be issued in
writing, and within fifteen days of the date of issuance of that determination, a person
aggrieved by that determination may appeal that determination. The appeal must be
heard in the same manner and with the same possible results as all other

administrative appeals under this title. In making a determination under this
subsection, the agency may consider:
a. The number of client companies with which the staffing service has contracts;
b. The length of time the staffing service has been in existence;
c. The extent to which the staffing service extends services to the general public;
d. The degree to which the client company and the staffing services are separate
and unrelated business entities;
e. The repetition of officers and managers between the client company and staffing
service;
f. The scope of services provided by the staffing service;
g. The relationship between the staffing service and the client company's workers;
h. The written agreement between the staffing service and the client company; and
i. Any other factor determined relevant by the agency.
7. The agency may require information from any staffing service, including a list of
current client company accounts, staffing assignments, and wage information. A client
company shall provide any information requested by the agency regarding any staffing
service.