§ 62-43-112 — Violations - Grounds for action

(a) No person shall: (1) Submit false information to the department; (2) Make a materially false entry in the records of a professional employer organization; or (3) Violate this chapter. (b) The following constitute grounds for which the department may take action under subsection (c) against a person subject to this chapter: (1) Being convicted of an offence or disciplined as described in § 62-43-106(b)(7) ; (2) Committing a prohibited act under subsection (a); (3) Making, issuing, circulating or causing to be made, issued or circulated, any estimate, illustration, circular, statement, advertisement, sales presentation, omission or comparison that misrepresents the benefits, advantages, conditions or terms of any professional employer services or is otherwise untrue, deceptive or misleading; (4) Entering into any agreement to commit or, by any concerted action, committing any act of boycott, coercion or intimidation resulting in or tending to result in unreasonable restraint of or monopoly in the business of employee leasing; or (5) Permitting to be used or using, permitting to be filed or filing, any name, trade name, fictitious name or business identity which is the same as, similar to or may be confused with the name, trade name, fictitious name or business identity of an existing licensee, any governmental agency or any nonprofit organization. (c) For violating subsection (a) or when grounds exist under subsection (b), the department may: (1) Issue an order: (A) To comply with the chapter; or (B) To cease and desist; (2) Impose an administrative penalty not to exceed one thousand dollars ($1,000) for each set of facts constituting a separate violation; (3) Restrict or suspend a registration; (4) Place the registrant on probation for a period of time not to exceed the next full term of registration where the registrant is subject to the terms and conditions determined by the department; (5) Deny an application or revoke a registration; or (6) Enjoin or restrain by bringing an action in the chancery court of Davidson County. (d) If the department finds that a violation has occurred or that grounds exist to take an action under subsection (c), the department shall consider the following when determining what action to take: (1) Whether the person committing the act or failing to act did so: (A) Knowingly; (B) Recklessly; (C) Repeatedly; or (D) Relying on information of another person or was subject to an illegal act; (2) The materiality and severity of the violation; and (3) The person's actions to cure the violation. (e) If the action under subdivision (c)(5) is taken by the department: (1) The department shall notify: (A) The department of labor and workforce development; and (B) Each client of which the department has knowledge of the department's action; and (2) The person with a revoked registration shall: (A) Immediately cease soliciting clients for professional employer services; (B) Not execute additional professional employer agreements or enter into any arrangement wherein it agrees to provide professional employer services; (C) Wind down the operations of the professional employer organization so that the professional employer organization will no longer be in operation sixty (60) days after the effective date of the revocation; and (D) Return the registration that was revoked to the department. (f) (1) The department may make or cause to be made investigations, audits or reviews within or without this state as the department deems necessary: (A) To determine whether a person has violated or is in danger of violating this chapter, including any regulation or rule promulgated under this chapter; or (B) To aid in the enforcement of this chapter. (2) All material compiled by the department in any investigation, audit or review under this section shall be confidential and exempt from public disclosure pursuant to title 10, chapter 7 and as amended, until ten (10) days after a finding of probable cause resulting from the investigation, audit or review; however, financial information, including, but not limited to, client lists, obtained by the department in connection with investigations, audits or reviews shall be kept confidential and exempt from the public disclosure requirements of title 10, chapter 7. (3) The department may impose upon the person found to have violated this chapter the cost of investigation and prosecution, including reasonable attorney fees. (g) The Uniform Administrative Procedures Act, compiled in title 4, chapter 5 and as amended, governs all matters and procedures regarding the hearing and judicial review of any contested case arising under this chapter.

Legislative History

Acts 2012, ch. 1081, § 1.