Arizona Revised Statutes Title 23. Labor § 23-901.08. Professional employer organizations

A. A person engaged in the business of providing professional employer services is subject to this chapter regardless of whether the person uses the term professional employer organization, PEO, staff leasing company, registered staff leasing company, employee leasing company or any other name.

B. As long as the professional employer organization's professional employer agreement with a client remains in force, the professional employer organization shall be regarded as a co-employer of the employee.

C. The professional employer organization and its client shall be considered the employer for the purpose of coverage under this chapter and both the professional employer organization and its client shall be entitled to protection of the exclusive remedy set forth in § 23-1022 .  Both the professional employer organization and its client shall comply with §§ 23-906 and 23-964 .  

D. When a professional employer organization enters into a professional employer agreement with a client in this state, the professional employer organization shall notify its workers' compensation insurance carrier and the commission.  The notification shall be on a form approved by the commission and shall include the following information:

1. The name and business address of the client employer.

2. Whether all or a majority of the client employer's workforce is covered by the professional employer agreement.

3. Unless all of the client employer's workforce is covered by the professional employer agreement, the name of the client employer's workers' compensation insurance carrier that is insuring the client employer's obligation to secure compensation under § 23-961 for any employees who are not covered by the professional employer agreement.  The professional employer organization shall also notify each client, in writing, of the client's obligation under § 23-961 to secure workers' compensation for any employees who are not covered by the professional employer agreement, even if such employees are hired after the execution of the professional employer agreement.

E. If a professional employer agreement is terminated, the professional employer organization shall immediately notify its workers' compensation insurance carrier and the commission, in writing, of the name of the client and the date of termination of the agreement.


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