KRS 336.232: Definitions for KRS 336.230 to 336.250.

As used in KRS 336.230 to 336.250, unless the context requires otherwise:

(1) "Client" means any person who enters into a professional employer agreement with

a professional employer organization;

(2) "Co-employer" means either a professional employer organization or a client;

(3) "Co-employment relationship" means a relationship which is intended to be an

ongoing relationship rather than a temporary or project -specific relationship

wherein the rights, duties, and obligations of an employer that arise out o f an

employment relationship have been allocated between co -employers pursuant to a

professional employer agreement under KRS 336.230 to 336.250, under which:

(a) The professional employer organization is entitled to enforce only those

employer rights and is subject to only those obligations specifically allocated

to the professional employer organization by the professional employer

agreement or KRS 336.230 to 336.250;

(b) The client is entitled to enforce those rights, and obligated to provide and

perform those employer obligations, allocated to the client by the professional

employer agreement and KRS 336.230 to 336.250; and

(c) The client is entitled to enforce any right and obligated to perform any

obligation of an employer not specifically obligated to the professional

employer organization by the professional employer agreement or KRS

336.230 to 336.250;

(4) "Covered employee" means an individual having a co-employment relationship with

a professional employer organization and a client who meets the following criteria:

(a) The individual has received written notice of co -employment with the

professional employer organization; and

(b) The individual's co -employment relationship is pursuant to a professional

employer agreement under KRS 336.230 to 336.250.

Individuals who are officers, directors, shareholders, partners, and managers of the

client will be covered employees, except to the extent the professional employer

organization and the client have expressly agreed in the professional employer

agreement that those individuals would not be covered employees, provided the

individuals meet the criteria of this subsection and act as operational managers or

perform day-to-day operational services for the client. A covered employee shall not

be considered a party to the professional employer agreement;

(5) "Insurer" includes every person engaged as principal and as indemnitor, surety, or

contractor in the business of entering into contracts of insurance as defined in KRS

304.1-040;

(6) "Person" means any indiv idual, partnership, corporation, limited liability company,

association, or any other form of legally recognized entity;

(7) "Professional employer agreement" means a written contract by and between a

client and a professional employer organization that provides for the:

(a) Co-employment of covered employees;

(b) Allocation of employer rights and obligations between the client and the

professional employer organization with respect to the covered employees;

and

(c) Assumption of responsibilities required under KRS 336.230 to 336.250 by the

client and the professional employer organization;

(8) (a) "Professional employer organiza tion" means any person engaged in the

business of providing professional employer services or conducting business

as a staff leasing company, registered staff leasing company, employee leasing

company, administrative employer, or other similar name.

(b) The following shall not be considered to be a "professional employer

organization":

1. Persons providing temporary help services;

2. Independent contractor arrangements by which a person assumes

responsibility for the product produced or service performed by the

person or the person's agents and retains and exercises primary direction

and control over the work performed by the individuals whose services

are supplied under the arrangements; and

3. Arrangements wherein a person, whose principal business activit y is not

entering into professional employer arrangements and which does not

hold itself out as a professional employer organization, shares

employees with a commonly owned company within the meaning of

Section 414(b) and (c) of the Internal Revenue Code o f 1986, as

amended;

(9) "Professional employer organization group" means two (2) or more professional

employer organizations that are majority owned or commonly controlled by the

same entity, parent, or controlling person or persons;

(10) "Professional em ployer services" means the service of entering into a co -

employment relationship under KRS 336.230 to 336.250 in which all or a majority

of the employees providing services to a client or to a division or work unit of a

client are covered employees;

(11) "Registrant" means a professional employer organization registered under KRS

336.230 to 336.250; and

(12) "Temporary help service" means services consisting of a person:

(a) Recruiting and hiring its own employees;

(b) Finding other organizations that need the services of those employees;

(c) Assigning those employees to perform work at or services for the other

organizations to support or supplement the other organizations' workforce, or

to provide assistance in special work situations, including but not li mited to

employee absences, skill shortages, seasonal workloads, or performing special

assignments or projects; and

(d) Customarily attempting to reassign the employees to other organizations when

they finish each assignment.