A.R.S. tit. 23 ch. 3 — Arizona Revised Statutes Title 23 Chapter 3 — Employment Services

23-501. Definitions In this article, unless the context otherwise requires: 1. "Department" means the department of economic security. 2. "Director" means the director of the department. 3. "Division" means the department of economic security. 4. "Maintenance" means money payments not to exceed the estimated cost of subsistence during vocational rehabilitation. 5. "Person with a disability" means any individual who has a physical or mental disability and a substantial disadvantage to employment, which is of such a nature that vocational rehabilitation services may reasonably be expected to render the person fit to engage in a gainful occupation, including a gainful occupation which is more consistent with the person's capacities and abilities, or for whom vocational rehabilitation services are necessary for the purpose of extended evaluation to determine rehabilitation potential. 6. "Physical restoration" means medical, surgical or therapeutic treatment necessary to correct or reduce the employment disadvantage of a person with a disability and includes medical, psychiatric, dental and surgical treatment, nursing service, hospital care not to exceed ninety days, convalescent home care, drugs, medical and surgical supplies and prosthetic appliances and other related services as defined in the vocational rehabilitation act, as amended. 7. "Prosthetic appliance" means an artificial device necessary to support or take the place of a part of the body, or to increase the acuity of a sense organ. 8. "Vocational rehabilitation" or "vocational rehabilitation service" means a service determined by the director to be necessary to enable a person with a disability to engage in a remunerative occupation and includes medical and vocational diagnosis, vocational guidance, counsel and placement, rehabilitation, training, physical restoration, transportation, occupational licenses, customary occupational tools and equipment, maintenance and training books and materials, follow up, evaluation and work adjustment and other related services as defined in the vocational rehabilitation act, as amended. 23-502. Rehabilitation services The department shall provide vocational rehabilitation service to persons with a disability who are eligible as provided by this article. 23-503. Duties and powers The department shall cooperate in carrying out the purposes of federal statutes pertaining to vocational rehabilitation. The division may adopt methods of administration found by the federal government necessary for the proper and efficient operation of agreements relating to vocational rehabilitation, and shall comply with conditions deemed necessary to secure the full benefits of such federal statutes. The division may: 1. Cooperate with other departments, divisions, agencies and institutions in providing for the vocational rehabilitation of persons with a disability and studying the problems involved therein, and in establishing, developing and providing programs, facilities and services deemed necessary or desirable. 2. Enter into reciprocal agreements with other states to provide for vocational rehabilitation of residents of the states concerned. 23-503.01. Coordination of vocational rehabilitation services The department shall coordinate its provision of vocational rehabilitation services to persons with an intellectual disability with its provision of intellectual disability services to such persons, including the areas of evaluation of applicants for either type of services and the development of program and rehabilitation plans for persons with an intellectual disability. 23-504. Merchandising businesses for the blind A. The department of economic security shall make surveys of merchandising business opportunities for and license persons who have no vision or acuity, or have a central visual acuity of 20/200 or less in the better eye, with the best correction by single magnification, or who have a field defect in which the peripheral field has been contracted to such an extent that the widest diameter of visual field subtends an angular distance no greater than 20 degrees, to operate such businesses on state, county or municipal property where such businesses may be properly and satisfactorily operated by blind persons all in accordance with the provisions of the Randolph-Sheppard act, as amended by Public Law 93-516, title 20, United States Code, sections 107 through 107f. For the purposes of this section "merchandising business" shall include but not be limited to food service operations, including cafeterias, snack bars and vending machines for food and beverages and souvenir and gift shops. B. The head or governing body of each department or agency and of each county or municipality or other local government entity having control of state, county or other local government property shall cooperate with the department of economic security in surveys of property under their control to find suitable locations for the operation of merchandising businesses by blind persons, and after it has been determined that there is need for a merchandising business and after the department of economic security has determined that such a business may be properly and satisfactorily operated by a blind person grant space to the department of economic security for the operation of a merchandising business by a licensed blind person and cooperate with the department of economic security in the installation of such merchandising business. C. Notwithstanding the provisions of section 41-792.01, the head or governing body of each department or agency of the state and of each county or city having control of public property shall not charge any rent or other assessment for the use or occupancy of the space granted for the operation of merchandising businesses by licensed blind persons. D. Any person licensed under this section to operate a merchandising business has the right of appeal under section 23-507. E. Preference to the blind is not mandatory for those merchandising businesses operated by public educational institutions where merchandising facilities are provided as an integral part of service to students or as a training program to students, nor for major food services provided by hospitals or residential institutions of the state as a direct service to patients, inmates, trainees or otherwise institutionalized persons. 23-506. Eligibility for assistance A. Vocational rehabilitation service shall be provided to a person with a disability, resident in the state, whose vocational rehabilitation in the judgment of the director after investigation can satisfactorily be achieved, or to any such person who is eligible for rehabilitation service under the terms of an agreement with the federal government or with another state. Unless otherwise provided by law, the following vocational rehabilitation services shall be provided at public cost only to persons with a disability who are determined to require financial assistance: 1. Physical restoration not including curative treatment for acute or transitory conditions. 2. Transportation not otherwise provided to determine the eligibility of the individual and the nature and extent of the rehabilitation services necessary. 3. Occupational licenses. 4. Customary occupational tools and equipment. 5. Maintenance. 6. Training books and materials. B. The right of a person with a disability to maintenance granted under this section may not be transferred or assigned. 23-507. Hearings A person applying for or receiving vocational rehabilitation service who is aggrieved by an action of the division may appeal to the director, subject to rules and regulations of the department. 23-508. Administrative funds A. The state treasurer shall be the custodian of monies received from the federal government for the purpose of carrying out any federal law relating to vocational rehabilitation, and shall disburse them and any state monies available for vocational rehabilitation purposes in the manner provided by law. B. The legislature shall annually appropriate to the department from the general fund such funds as may be necessary to carry out the purposes of this article. 23-551. Definitions In this article, unless the context otherwise requires: 1. "Day labor" means labor or employment that is under a contract between a day labor service agency and a third party employer, that is occasional or irregular and that is for a limited time period. 2. "Day laborer" means an individual who contracts for day labor employment with a day labor service agency. 3. "Day labor service agency" means an entity that provides day laborers to third party employers and that charges the third party employers for this service. 4. "Third party employer" means a person that contracts with a day labor service agency for the employment of day laborers. 23-552. Exemptions This article does not apply to: 1. Business entities registered as farm labor contractors. 2. Temporary help services engaged in supplying white-collar employees, secretarial employees, clerical employees or skilled laborers. 3. Labor union hiring halls. 4. Labor bureau or employment offices operated by a business entity for the sole purpose of employing an individual for its own use. 23-553. Day labor service agency; third party employer; duties A. A day labor service agency shall compensate day laborers for work performed by providing or making available commonly accepted negotiable instruments that are payable in cash, on demand, at a financial institution. B. At the time of payment of wages, a day labor service agency shall provide each day laborer with an itemized statement showing in detail each deduction made from the wages. C. In no event shall any deductions made by a day labor agency, other than those required by federal or state law, bring the day laborer's pay below federal minimum wage for the hours worked. D. A day labor service agency shall not restrict the right of a day laborer to accept a permanent position with a third party employer to whom the day laborer has been referred to for work or restrict the right of a third party employer to offer employment to a day laborer. 23-561. Definitions In this article, unless the context otherwise requires: 1. "Administrative fee": (a) Means the fee that is charged to a client by a professional employer organization for professional employer services. (b) Does not include any amount of the fee that is applied to wages, salaries, benefits, workers’ compensation, payroll taxes, withholding or other assessments that the professional employer organization pays to or on behalf of covered employees under a professional employer agreement. 2. "Client": (a) Means a person who contracts with a professional employer organization under a professional employer agreement. (b) Does not include a professional employer organization. 3. "Co-employer" means a professional employer organization or a client. 4. "Co-employment relationship" means all of the following: (a) A relationship between co-employers if the rights, duties and obligations of an employer that arise out of an employment relationship are allocated between co-employers subject to a professional employer agreement and this article, and the relationship is intended to be an ongoing relationship and not a temporary or project-specific relationship. (b) A relationship between a professional employer organization and a covered employee that is subject to a professional employer agreement and this article, that allows the professional employer organization to enforce those rights and that requires the professional employer organization to perform those duties and obligations that are allocated to the professional employer organization by the professional employer agreement or this article. (c) A relationship between a client and a covered employee that is subject to a professional employer agreement and this article, that allows the client to enforce those rights and that requires the client to perform those employer obligations that are allocated to the client by the professional employer agreement or this article or that are not otherwise allocated by the professional employer agreement or this article. 5. "Covered employee": (a) Means an individual who has a co-employment relationship with a professional employer organization and a client, if the individual: (i) Has executed a written notice of the co-employment relationship with a professional employer organization. (ii) Is a party to a co-employment relationship with a professional employer organization and a client. (iii) Is subject to a professional employer agreement under this article. (b) Includes an individual who is an officer, director, shareholder, partner or manager of a client if the professional employer agreement includes the individual as a covered employee and the individual acts as a manager or performs services for the client. 6. "Person" means any individual, partnership, corporation, limited liability company or other legally recognized entity. 7. "Professional employer agreement" means a written contract between a professional employer organization and a client that provides for: (a) The co-employment of covered employees. (b) The allocation and sharing between the client and the professional employer organization of employer responsibilities with respect to a covered employee, including hiring, firing and disciplinary responsibilities. (c) Any other responsibility required by this article. 8. "Professional employer organization": (a) Means any person who is engaged in the business of providing professional employer services whether or not the person uses the term professional employer organization, staff leasing company, registered staff leasing company, employee leasing company or any other name. (b) Does not include: (i) Any person whose principal business activity is not entering into professional employer agreements and who does not hold itself out as a professional employer organization. (ii) A person who shares employees with a commonly owned company as defined by sections 414(b) and 414(c) of the internal revenue code. (iii) Arrangements by a person who assumes responsibility for the product that is produced or service that is performed by the person and who retains and exercises the primary discretion and control over the work performed by the person whose services are supplied under the arrangement. (iv) A person who hires temporary help for the purpose of supporting or supplementing a client's employees. 9. "Professional employer services" means the service of entering into a co-employment relationship under this article in which all or a majority of the employees who provide services to a client or to a division or work unit of the client are covered employees. 23-562. Professional employer agreements; rights; notice A. A professional employer agreement shall: 1. Govern the co-employment relationship between the client and the professional employer organization and between each co-employer and each covered employee. 2. Reserve to the client the right to direct and control covered employees to the extent necessary to conduct the client's business and to discharge any fiduciary responsibility or to comply with any licensing requirement that applies to the client or a covered employee. 3. Require the professional employer organization to pay the wages of covered employees, to withhold, collect, report and remit payroll-related and unemployment taxes and to make payment for employee benefits for covered employees. For the purposes of this paragraph, wages do not include obligations between a client and a covered employee that exceed a covered employee's salary, bonuses, commissions, severance pay, deferred compensation, profit sharing or vacation, sick or other paid time off pay unless the professional employer organization expressly agrees to assume liability for the additional obligations in the professional employer agreement. 4. Permit both the professional employer organization and client to have a right to hire, terminate and discipline covered employees. 5. Specify whether the client or the professional employer organization will purchase and maintain the workers' compensation policy for covered employees from a carrier that is licensed to conduct business in this state. If the professional employer organization purchases the workers' compensation policy, the professional employer organization shall maintain and, if requested by the client on termination of the agreement, be able to provide to the client records regarding the loss experience related to the workers' compensation insurance that is provided to the covered employees. B. A professional employer agreement shall not: 1. Affect, modify or amend any collective bargaining agreement or any rights or obligations of any client, professional employer organization or covered employee that are required under the federal national labor relations act, the federal railway labor act or this title. 2. Affect, modify or amend any state, local or federal licensing, registration or certification that is required by any client or covered employee. 3. With respect to a bid, contract, purchase order or agreement entered into with this state or a political subdivision of this state, affect the status of a client's company as a small, minority-owned, disadvantaged or woman-owned business enterprise or as a historically underutilized business because the client entered into a professional employment agreement with a professional employer organization. 4. Diminish, abolish or remove any rights of covered employees to any clients or obligations of clients to any covered employees that existed before the effective date of a professional employer agreement. 5. Terminate an employment relationship that existed before the effective date of a professional employer agreement. 6. Establish new or additional enforceable rights of a covered employee against a professional employer organization that are not specifically allocated to the professional employer organization under the professional employer agreement or this article. C. Unless specifically provided in a professional employer agreement or this article: 1. The client shall perform all responsibilities that otherwise apply to an employer in an employment relationship. 2. The professional employer organization shall perform only the responsibilities that are specifically required under this article or a professional employer agreement. The rights, duties and obligations of a professional employer organization as a co-employer with respect to any covered employee are limited to the responsibilities that are contained in the professional employer agreement and that arise during the term of co-employment by the professional employer organization for the covered employees. D. Every professional employer organization that enters into a professional employer agreement shall provide notice to each covered employee who is affected by the agreement. The notice may be included in the form of the employment documents that a covered employee completes for the professional employer organization. 23-569. Financial capability; bonding Every professional employer organization that is located in this state shall maintain either of the following: 1. A minimum net worth of at least $100,000. 2. A bond, an irrevocable letter of credit or securities that have a minimum market value of $100,000. The bond shall be held by an insured depository institution in order to secure the payment of all taxes, wages, benefits or other entitlements, including amounts expended by the industrial commission's special fund under section 23-907 that are due to be paid by the professional employer organization with respect to covered employees if the professional employer organization fails to make the required payments. Any bond, irrevocable letter of credit or securities that are deposited under this section shall not be included for the purposes of calculating the minimum net worth of the professional employer organization under this section. 23-570. Liability A. Unless otherwise expressly provided by a professional employer agreement or otherwise required by law, a client: 1. Shall be solely responsible for: (a) The quality, adequacy and safety of the goods or services produced or sold in the client's business. (b) Directing, supervising, training and controlling the work of covered employees with respect to the business activities of the client. (c) The acts, errors or omissions of covered employees when directing, supervising, training and controlling the covered employees' work. 2. Shall not be liable for the acts, errors or omissions of a professional employer organization or any covered employee of the client and the professional employer organization if the covered employee is acting under the express direction and control of the professional employer organization. B. This section does not limit any contractual liability or obligation required under a professional employer agreement or limit the liabilities and obligations of any professional employer organization or client required by this article. C. For the purposes of general liability insurance, fidelity bonds, surety bonds, employer's liability that is not covered under workers' compensation and liquor liability insurance that is carried by the professional employer organization, a covered employee is not an employee of the professional employer organization unless the covered employee is specifically included by reference in the professional employer agreement and applicable prearranged employment contract, insurance contract or bond. 23-571. Tax obligations and incentives A. This article does not relieve a client from paying any tax liability that is due under title 42 or 43. B. Any tax on professional employer services shall be limited to the administrative fees. C. For the purposes of tax credits and any other economic incentives provided by this state that are based on employment, covered employees shall be deemed employees of either the client or the professional employer organization. Either the client or the professional employer organization, but not both, shall be entitled to the benefit of any tax credit, economic incentive or any other benefit resulting from the employment of covered employees of the client. If the amount of any credit or incentive is based on the number of employees, only the covered employees who actually work for the client shall be considered employed and the covered employees who work for other clients of the professional employer organization shall not be considered. 23-572. Services not insurance A professional employer organization under this article is not engaged in the sale of insurance by offering, marketing, selling, administering or providing professional employer organization services or employee benefit plans for covered employees. 23-573. Rights; duties A. Covered employees may enforce those rights against a professional employer organization that are allocated to the professional employer organization or that are shared between the professional employer organization and the client under a professional employer agreement or this article. B. Any other rights, duties or obligations that are enforceable by an employee under the laws of this state shall remain enforceable against the client. 23-574. Covered employees; licensing A. A covered employee who is required to be licensed, registered or certified under the laws of this state shall be deemed an employee of the client for purposes of the license, registration or certification requirement. B. A professional employer organization shall not be deemed to be engaged in any occupation, trade, profession or other activity that is subject to licensing, registration or certification requirements under the laws of this state solely on the basis of entering into and maintaining a co-employment relationship with a covered employee who is required to be regulated or certified. C. Unless otherwise expressly agreed to by a client in a professional employment agreement, a client shall maintain the right to direct and control the professional or licensed activities of the covered employees and the client's business.