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PEO COMPLIANCE UNDERSTANDINGS

Licensed Company Terms GL, EL, CO… What do they all mean?

What does the term “EL” mean?

An “employee leasing company” is a business entity that assigns its employees to a client and shares the control and direction of those employees with the client. This can be a sole proprietorship, partnership, corporation, or another form of entity.

This term does not include the following:

  • Temporary help arrangements used to provide additional support to the client’s workforce during special work situations, such as employee absences, temporary skill shortages, and seasonal workloads.
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  • This type of arrangement involves an organization employing only one category of employees and assigning them to perform a function that is inherent to that category. The function must be separate and divisible from the client’s primary business.
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  • A facilities staffing arrangement involves assigning an organization’s employees to staff a specific client function on an ongoing basis. The number of individuals assigned cannot exceed 50% of the workforce at the client’s worksite, and no more than 20% of the individuals assigned to a particular client function can have been employed by the client before the arrangement started.
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  • This type of arrangement involves an organization assigning its employees exclusively to a commonly controlled company or group of companies, as defined in s. 414 of the Internal Revenue Code. The organization cannot hold itself out to the public as an employee leasing company.
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  • A home health agency or healthcare services pool is not considered an employee leasing company unless it is engaged in such a business.
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What does the term “CO” mean?

  • A “controlling person” is someone who has the power to direct or influence the management or policies of an employee leasing company.

This term does not include the following:

  • Direct or indirect control of over 50% of the voting securities of the employee leasing company.
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  • General power to endorse any negotiable instrument payable to or on behalf of the employee leasing company or to influence its management or policies.
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  • Been employed, appointed, or authorized by the employee leasing company to enter into a contract with a client company on behalf of the employee leasing company.

What does the term “DM” mean?

  • A “de minimus employee leasing company” is an out-of-state company licensed as an employee leasing company in its state of domicile or residence, which does not provide leased employees to a client in Florida or have an office or solicit clients in the state. Additionally, it does not have more than 50 leased employees working in Florida and is registered but not licensed to do business within the state.
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