MI SB1037

Establishes the Michigan Professional Employer Organization Regulatory Act to license and regulate PEOs providing coemployment services in Michigan, effective July 1, 2011.

Requires PEOs to obtain a license from the Department of Energy, Labor, and Economic Growth by submitting an application with financial statements, ownership and management information, and paying a fee not to exceed $1,500; licenses are valid for 3 years at $1,500 per year.

Mandates PEOs maintain minimum working capital of $100,000 or post a bond, letter of credit, or securities of equal value to secure payment of wages, taxes, and benefits to covered employees.

Establishes that professional employer agreements must specify PEO responsibilities for wage payment, payroll taxes, and employee benefits, while allowing clients to direct and control work and employees and limiting liability when employees act under express direction of either party.

Imposes criminal penalties including imprisonment up to 1 year and fines up to $10,000 for knowingly violating the act, with additional administrative penalties of up to $5,000 and license suspension or revocation available through department enforcement.