KRS § 336.234 — KY Code / Title XXVII / Chapter 336 / Section 336.234
336.234 Limitations on professional employer agreements -- Covered employees 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
Status: in_force

336.234 Limitations on professional employer agreements -- Covered employees

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.