†
HR 2 EAS
‘‘(3) agrees that it will satisfy the bond and
independent financial review requirements of sub-
section (c) on an ongoing basis,
‘‘(4) agrees that it will satisfy such reporting ob-
ligations as may be imposed by the Secretary,
‘‘(5) agrees to verify on such periodic basis as the
Secretary may prescribe that it continues to meet the
requirements of this subsection, and
‘‘(6) agrees to notify the Secretary in writing
within such time as the Secretary may prescribe of
any change that materially affects whether it con-
tinues to meet the requirements of this subsection.
‘‘(c) BOND AND INDEPENDENT FINANCIAL REVIEW RE-
QUIREMENTS.—
‘‘(1) IN GENERAL.—An organization meets the
requirements of this paragraph if such organization—
‘‘(A) meets the bond requirements of para-
graph (2), and
‘‘(B) meets the independent financial review
requirements of paragraph (3).
‘‘(2) BOND.—
‘‘(A) IN GENERAL.—A certified professional
employer organization meets the requirements of
this paragraph if the organization has posted a
bond for the payment of taxes under subtitle C
†
HR 2 EAS
(in a form acceptable to the Secretary) in an
amount at least equal to the amount specified in
subparagraph (B).
‘‘(B) AMOUNT
OF
BOND.—For the period
April 1 of any calendar year through March 31
of the following calendar year, the amount of the
bond required is equal to the greater of—
‘‘(i) 5 percent of the organization’s li-
ability under section 3511 for taxes imposed
by subtitle C during the preceding calendar
year (but not to exceed $1,000,000), or
‘‘(ii) $50,000.
‘‘(3) INDEPENDENT FINANCIAL REVIEW REQUIRE-
MENTS.—A certified professional employer organiza-
tion meets the requirements of this paragraph if such
organization—
‘‘(A) has, as of the most recent review date,
caused to be prepared and provided to the Sec-
retary (in such manner as the Secretary may
prescribe) an opinion of an independent certified
public accountant that the certified professional
employer organization’s financial statements are
presented fairly in accordance with generally ac-
cepted accounting principles, and
†
HR 2 EAS
‘‘(B) provides, not later than the last day of
the second month beginning after the end of each
calendar quarter, to the Secretary from an inde-
pendent certified public accountant an assertion
regarding Federal employment tax payments
and an examination level attestation on such as-
sertion.
Such assertion shall state that the organization has
withheld and made deposits of all taxes imposed by
chapters 21, 22, and 24 of the Internal Revenue Code
in accordance with regulations imposed by the Sec-
retary for such calendar quarter and such examina-
tion level attestation shall state that such assertion is
fairly stated, in all material respects.
‘‘(4) CONTROLLED GROUP RULES.—For purposes
of the requirements of paragraphs (2) and (3), all
professional employer organizations that are members
of a controlled group within the meaning of sections
414(b) and (c) shall be treated as a single organiza-
tion.
‘‘(5) FAILURE TO FILE ASSERTION AND ATTESTA-
TION.—If the certified professional employer organi-
zation fails to file the assertion and attestation re-
quired by paragraph (3) with respect to any calendar
quarter, then the requirements of paragraph (3) with
†
HR 2 EAS
respect to such failure shall be treated as not satisfied
for the period beginning on the due date for such at-
testation.
‘‘(6) REVIEW DATE.—For purposes of paragraph
(3)(A), the review date shall be 6 months after the
completion of the organization’s fiscal year.
‘‘(d) SUSPENSION AND REVOCATION AUTHORITY.—The
Secretary may suspend or revoke a certification of any per-
son under subsection (b) for purposes of section 3511 if the
Secretary determines that such person is not satisfying the
representations or requirements of subsections (b) or (c), or
fails to satisfy applicable accounting, reporting, payment,
or deposit requirements.
‘‘(e) WORK SITE EMPLOYEE.—For purposes of this
title—
‘‘(1) IN
GENERAL.—The term ‘work site em-
ployee’ means, with respect to a certified professional
employer organization, an individual who—
‘‘(A) performs services for a customer pur-
suant to a contract which is between such cus-
tomer and the certified professional employer or-
ganization and which meets the requirements of
paragraph (2), and
‘‘(B) performs services at a work site meet-
ing the requirements of paragraph (3).
†
HR 2 EAS
‘‘(2) SERVICE
CONTRACT
REQUIREMENTS.—A
contract meets the requirements of this paragraph
with respect to an individual performing services for
a customer if such contract is in writing and provides
that the certified professional employer organization
shall—
‘‘(A) assume responsibility for payment of
wages to such individual, without regard to the
receipt or adequacy of payment from the cus-
tomer for such services,
‘‘(B) assume responsibility for reporting,
withholding, and paying any applicable taxes
under subtitle C, with respect to such individ-
ual’s wages, without regard to the receipt or ade-
quacy of payment from the customer for such
services,
‘‘(C) assume responsibility for any employee
benefits which the service contract may require
the organization to provide, without regard to
the receipt or adequacy of payment from the cus-
tomer for such services,
‘‘(D) assume responsibility for hiring, fir-
ing, and recruiting workers in addition to the
customer’s responsibility for hiring, firing and
recruiting workers,