WASHINGTON — The IRS today made temporary and proposed regulations available that would establish a new voluntary certification program for professional employer organizations (PEOs). The regulations published in the Federal Register, carry out legislation enacted in late 2014 requiring the IRS to establish a voluntary certification program for these organizations and are available in the Federal Register. To be certified under the new program, PEOs must meet tax status, background, business location, financial reporting, experience, and bonding requirements.   The application process will open on July 1, 2016.  A revenue procedure further detailing the application process will be released in coming weeks. Subsequently, as required by law, the IRS will publish lists of certified PEOs (CPEOs) and those whose certification has been revoked or suspended.

South Carolina regulates professional employ services under South Carolina Code § 40-68-10 ET. SEQ. (2015), as Amended.  The South Carolina Department of Consumer Affairs is in charge of registration and enforcement for the state. According to the statute, “Professional employer services” means an arrangement by which employees of a licensee are assigned to work at a client company and in which employment responsibilities are shared by the licensee and the client company. The employee’s assignment is intended to be of a long-term or continuing nature, rather than temporary or seasonal in nature, and a majority of the work force at a client company worksite or a specialized group within that work force consists of assigned employees of the licensee. Professional employer services does not include temporary employees.

The IRS invites public comment on the regulations, the details for doing so are found in the Federal Register. The deadline for submissions is Aug. 4, 2016.