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Virginia Administrative Code
Title 16. Labor and Employment
Agency 30. Virginia Workers' Compensation Commission
Chapter 100. Regulations for Professional Employer Organizations
7/8/2020

16VAC30-100-40. Notification of Changes in Client Company Status and Insurance Coverage.

A. Each PEO shall provide notice to the commission when it enters into an agreement with a client company as required by § 65.2-803.1 B of the Code of Virginia. Such notification shall include the related insurance information required by § 65.2-803.1 B of the Code of Virginia.

B. When a PEO enters into an agreement with a client company, the PEO shall notify the client company, in writing, of the client company's obligation to comply with the insuring requirement of § 65.2-801 of the Code of Virginia with respect to its employees who are not coemployees covered under any master policy.

C. The notice to a client company of a PEO's intent to terminate an agreement, as required by § 65.2-803.1 E of the Code of Virginia, shall include the following:

1. The date on which the agreement shall terminate;

2. The date on which the client companies' coverage under a master workers' compensation insurance policy, if any, issued in the name of the PEO will terminate; and

3. The following statement placed conspicuously:

The Virginia Workers' Compensation Act requires that all employers subject to the Act maintain workers' compensation liability insurance. On _____ [date], coverage of your employees under the workers' compensation insurance policy issued to ______________ [name of PEO] will terminate. Therefore, if you are subject to the Act, you must obtain the required coverage. Your failure to obtain coverage may result in you incurring civil penalties of up to $5,000 and additional criminal penalties.

Each PEO shall file with the commission copies of all notices.

D. Each PEO shall also send to the client company notice complying with subdivisions C 1 through C 3 of this section upon its receipt from a client company of notice of the client company's intent to terminate the agreement for professional employer services. The PEO shall file copies of these notices with the commission.

E. The notice and filing obligations imposed by this section and § 65.2-803.1 E of the Code of Virginia shall apply regardless of whether the termination of the agreement for professional employer services is consistent with the terms of the agreement.

F. The notice and filing obligations imposed by this section and § 65.2-803.1 E of the Code of Virginia shall apply where the agreement is terminated by either the PEO or the client company without prior notice of intent to terminate.

G. Failure by a PEO to provide the notices and filings required in this section shall subject the PEO to the penalties provided in §§ 65.2-803.1 H and 65.2-902 of the Code of Virginia.

Statutory Authority

§§ 65.2-201 and 65.2-803.1 of the Code of Virginia.

Historical Notes

Derived from Volume 19, Issue 07, eff. February 14, 2001.

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