PA HB1795

Payroll processors must annually provide proof of fidelity insurance, employee dishonesty bond, third-party fidelity coverage, or liability insurance with crime coverage in an amount equal to two times their highest weekly payroll processed, capped at $5,000,000.

Payroll processors must maintain a surety bond equal to total Federal, State, and local tax payments and unemployment premiums processed during their three highest-volume consecutive months, with a minimum of $50,000 and maximum of $500,000.

Surety bonds must designate the Secretary of Revenue as payee and run continuously until canceled, with surety companies required to provide at least 30 days' notice before cancellation takes effect.

Violations for insufficient bonding carry fines of $1,000 for the first offense and $5,000 for each subsequent offense, with proceeds deposited into the General Fund.

The act takes effect 60 days after enactment and will be known as the Payroll Bond Act.