Arkansas Administrative Code › Agency 054 - Arkansas Insurance Department › Rule 054.00.93-006 - Rule #54 - Arkansas Workers Compensation Insurance Plan

Current through Register Vol. 49, No. 6, June, 2024
SECTION 1. AUTHORITY
This Rule and Regulation is promulgated and adopted by the
			 Insurance Commissioner for the State of Arkansas ("Commissioner") pursuant to
			 the authority vested in the Commissioner by Section 3 of Act 1143 of 1991,
			 codified as Arkansas Code Annotated §§ 23-92-301, et seq., by Acts
			 652 and 1155 of 1993, by Section 47 of Act 901 of 1993, amending Arkansas Code
			 Annotated §§ 23-63-309, and by Arkansas Code Annotated §§
								23-61-108 and
			 25-15-201, et
			 seq.
SECTION 2. PURPOSE
The purpose of this Rule and Regulation is to establish
			 procedures for licensing of employee leasing firms and employee leasing firm
			 groups and to establish minimum standards which employee leasing firms and
			 employee leasing firm groups must meet in conducting business in this
			 State.
SECTION 3. EFFECTIVE
		  DATE: EMERGENCY
Pursuant to the Comissioner's authority under Ark. Code Ann.
			 §
								23-61-108,
			 §§
								25-15-201, et
			 seq., as amended by Act 1106 of 1993, Act 652 of 1993, Act 901 of 1993, and
			 other applicable laws and rules, the effective date of this Rule and Regulation
			 is December 29, 1993, upon filing with the Arkansas Secretary of State and the
			 "Arkansas State Library.
SECTION
		  4. DEFINITIONS
A. "Commissioner"
		  shall mean the Insurance Commissioner for the State of Arkansas.
B. "Person" shall mean an individual, an
		  association, a company, a firm, a partnership or a corporation.
C. "Client" shall mean a person who obtains
		  all or part of its work force or human labor or services from another person
		  through an employee leasing arrangement.
D. "Employee Leasing Firm" shall mean any
		  person engaged in providing services of employees pursuant to one or more
		  employee leasing arrangements.
E.
		  "Employee Leasing Firm Group" shall mean at least two (2), but no more than
		  five (5) corporate employee leasing firms each of which are majority owned by
		  the same controlling person, or ultimate parent.
F. "Controlling Person" shall mean:
1) An officer or director of a corporation
		  seeking to offer employee leasing services, a shareholder holding ten (10)
		  percent or more of the voting stock of a corporation seeking to offer employee
		  leasing services, or a partner of a partnership seeking to offer employee
		  leasing services; or
2) An
		  individual who possesses, directly or indirectly, the power to direct or cause
		  the direction of the management or policies of a company seeking to offer
		  employee leasing services through the ownership of voting securities, by
		  contract or otherwise.
G. "Employee Leasing Arrangement" shall mean
		  an arrangement or agreement, under written contract or otherwise, whereby:
1) an employee leasing firm assigns or
		  purports to assign human beings, or the labor or services of human beings, to
		  clients, for whom the human beings either do perform or are expected to perform
		  such labor or services;
2) the
		  arrangement is intended to be, or is, on-going rather than temporary in nature;
		  and
3) common law employment rights
		  and responsibilities relative to the "assigned" human being, including the
		  employer's right of direction and control of the "employee" as to the method
		  and manner of doing the work, are shared by the employee leasing firm and the
		  client.
Although it is not always necessarily true, it is generally true
			 that in an "employee leasing arrangement" the initial source of the workforce
			 that is to be leased or assigned to the "client" is the existing workforce of
			 the client.
The term "employee leasing arrangement" is to be liberally
			 construed so as to include any and all of such arrangements meeting the
			 criteria hereinabove set forth, by whatever term known, by which the right to
			 utilize the labor or services of human beings in a productive capacity is
			 assigned or transferred from one person or entity to another. The employer's
			 right of direction and control of the "employee" is deemed to be "shared" by
			 the employee leasing firm and the client whenever:
(i) the arrangement, agreement or contract
		  between the client and the employee leasing firm expressly so states;
		  or
(ii) a substantive analysis of
		  the client's manufacturing, service or business process reveals that, in fact,
		  the client, or someone acting on his behalf and in his interest, exercises some
		  degree of control over the "employees" as to the method and manner of the work
		  performed.
H.
		  "Temporary Employee" shall mean a person employed either through another person
		  or directly by an employer to support or supplement the existing work force in
		  special situations such as employee absences, and temporary skill shortages,
		  seasonal workloads, and special assignments and projects with the expectation
		  that the person's position will be terminated upon the completion of the task
		  or function. Again, although it is not always true, it is_ generally true that
		  the initial source of the workforce leased or assigned to a client to fill a
		  "temporary" position is the temporary leasing agency or company and not the
		  client. A particular relationship between a leasing entity, the worker
		  providing the services, and the client employer will be deemed to be
		  "temporary" when the position or job (not necessarily the worker or series of
		  workers) is genuinely anticipated to exist only so long as the special
		  situation or project continues. The relationship between these entities or
		  persons shall not be considered "temporary" when the position or job is a
		  regular, ongoing part of the employer's regular manufacturing or service
		  process regardless of how many different workers may be supplied by a third
		  party over time to fill that job or position. Contracting for services to be
		  performed by temporary employees shall not be considered the making of employee
		  leasing arrangements. In administering this Rule and Regulation there shall be
		  a rebuttable presumption that when:
(i) the
		  putative temporary employment has continued beyond the "special situation"
		  which served as its genesis or reason for being; or
(ii) the majority of the workers or employees
		  providing services to a particular client during the course of any calendar
		  year at any particular work site or job site are, in fact, provided to the
		  employer by a third party or parties and are not considered or treated as
		  regular full time "employees" by the client, such are not "temporary"
		  employment relationships, but, rather, are "employee leasing
		  arrangements."
I.
		  "Independent Contractor" shall mean a person who, exercising an independent
		  employment or engaging in an independent business enterprise, contracts with
		  another person to do a piece of work according to the person's own methods, and
		  without being subject to the other person's control, except as to the result of
		  the work. Contracting for services to be performed by independent contractors
		  shall not be considered the making of employee leasing arrangements.