Professional Employer Organizations Licensing

North Carolina Professional Employer Organization Act (N.C.G.S. § 58-89A)

The previous North Carolina Professional Employer Organization Act (N.C.G.S. §§ 58-89-1 through 58-89-30) was repealed by Session Laws 2004-162, s.1, effective January 1, 2005. N.C.G.S. § 58-89 was rewritten and recodified as N.C.G.S. § 58-89A.

Senate Bill 685 revised certain parts of N.C.G.S. § 58-89A and was signed into law June 29, 2005 (Session Law 2005-124).

House Bill 737 revised certain parts of N.C.G.S. § 58-89A and was signed into law June 27, 2007 (Sessions Law 2007-127).

House Bill 74 revised certain parts of N.C.G.S. § 58-89A and was signed into law August 23, 2013 (Session Law 2013-413)

Persons Registered under Prior Law

A person registered to engage in and offer professional employer services in North Carolina pursuant to G.S. § 58-89-15 on December 31, 2004 may continue to operate in North Carolina pending approval of the person’s application for a license or approval of the person’s notification of de minimis registration provided that the application or notification was filed with the Commissioner no later than July 1, 2005. If the application for licensure or the notification of de minimis registration is denied, the person must cease offering professional employer services in North Carolina.

Persons Not Registered Under Prior Law

A person not registered to engage in and offer professional employer services in North Carolina pursuant to G.S. § 58-89-15 on December 31, 2004 shall not engage in or offer professional employer services in North Carolina until the person has been issued either a license or has been registered as a de minimis registrant under the Act, except as may be permitted pursuant to Section 6 of Session Law 2005-124.

Section 6 of Session Law 2005-124 states that a person not previously registered pursuant to G.S. § 58-89-15 on December 31, 2004 may engage in or offer professional employer services in North Carolina prior to approval of licensure upon satisfying each of the following conditions:

1. The person submits with its application an audited GAAP financial statement that has been issued no more than 90 days from the date the application is received by the Commissioner, and the statement is accompanied by an unqualified opinion;
2. The person is a licensed or registered professional employer organization in good standing in at least one other state of the United States;
3. The person has a client preexisting December 31, 2004, and that client acquires or adds employees in this State on or before July 1, 2005; and
4. The person has submitted his or her application for licensure in compliance with the provisions of Article 89A of Chapter 58 of the General Statutes on or before July 1, 2005.

The conditional authority to engage in and offer professional employer services pursuant to Section 6 of Session Law 2005-124 must cease upon the earliest of the following: the granting of a license under Article 89A of Chapter 58 of the General Statutes, the denial of a license under Article 89A of Chapter 58 of the General Statutes, or the failure to satisfy any of the conditions upon which the conditional authority exists.

De Minimis Registration

A Professional Employer Organization (PEO) operating with a de minimis registration is subject to the provisions of N.C.G.S. §58-89A-75. Pursuant to these provisions, a PEO operating in North Carolina with a de minimis registration can not actively advertise or market their services to the general public of North Carolina. The PEOs can not actively pursue new clients in the State.

Statutes and Rules

General Statute 58-89A

Questions

If you have any questions please contact Nancy Wise at 919-807-6178 (Nancy.Wise@ncdoi.gov).