Chapter 202

202.15 202.15 Charitable sales promotions. If a commercial coventurer conducts a charitable sales promotion on behalf of a charitable organization that is required to be registered under s. 202.12 (1), the commercial coventurer shall disclose in each advertisement for the charitable sales promotion the dollar amount, or percentage of price, per unit of goods or services purchased or used that will benefit the charitable organization or charitable purpose. If the actual dollar amount or percentage cannot reasonably be determined on the date of the advertisement, the commercial coventurer shall disclose an estimated dollar amount or percentage. The estimate shall be based upon all of the relevant facts known to the commercial coventurer and to the charitable organization regarding the charitable sales promotion.

202.15 History History: 1991 a. 278; 2013 a. 20 s. 2212; Stats. 2013 s. 202.15.

202.16 202.16 Prohibited acts.

202.16(1) (1) No charitable organization, fund-raising counsel, or professional fund-raiser may, in the conduct of his, her, or its affairs, including the planning, management, or execution of a solicitation or charitable sales promotion, do any of the following:

202.16(1)(a) (a) Use an unfair or deceptive act or practice.

202.16(1)(b) (b) Imply that a contribution is for or on behalf of a charitable organization or use any emblem, device, or printed matter belonging to or associated with a charitable organization without first being authorized in writing to do so by the charitable organization.

202.16(1)(c) (c) Use a name, symbol, or statement so closely related or similar to that used by another charitable organization that the use of the name, symbol, or statement would tend to confuse or mislead a person being solicited.

202.16(1)(d) (d) Represent or lead anyone in any manner to believe that the person on whose behalf a solicitation or charitable sales promotion is being conducted is a charitable organization or that the proceeds of the solicitation or charitable sales promotion will be used for charitable purposes if that is not the fact.

202.16(1)(e) (e) Lead anyone in any manner to believe that another person sponsors, endorses, or approves a solicitation or charitable sales promotion if the other person has not sponsored, endorsed, or approved the solicitation or charitable sales promotion in writing.

202.16(1)(f) (f) Use the fact of registration to lead any person to believe that the registration constitutes an endorsement or approval by the state.

202.16(1)(g) (g) Represent directly or by implication that a charitable organization will receive a fixed or estimated percentage of the total funds collected greater than that established under s. 202.14 (4).

202.16(1)(h) (h) Represent or cause another to represent that contributions are tax-deductible unless they so qualify under the federal Internal Revenue Code.

202.16(1)(i) (i) Represent or cause another to represent that the person has previously approved or agreed to make a contribution when in fact the person has not given this approval or agreement.

202.16(1)(j) (j) Represent or cause another to represent that the person has previously contributed to the same organization or for the same purpose when in fact the person has not so contributed.

202.16(1)(k) (k) Fail to apply contributions in a manner substantially consistent with the solicitation or the purposes expressed in the solicitation.

202.16(1)(L) (L) Represent in any manner that registration constitutes an endorsement or approval by the department or the department of justice.

202.16(2) (2) In deciding whether an act or practice is unfair or deceptive within the meaning of sub. (1) (a), definitions, standards and interpretations relating to unfair or deceptive acts or practices under chs. 421 to 427 apply.

202.16 History History: 1991 a. 278; 2013 a. 20 s. 2214; Stats. 2013 s. 202.16; 2015 a. 163.

202.17 202.17 Administration and investigations.

202.17(1) (1) Public records. Except as provided in ss. 202.13 (5) and 202.14 (10), applications, reports, contracts, and agreements of charitable organizations, fund-raising counsel, professional fund-raisers, and unpaid solicitors and all other documents and information retained by or filed with the department under this subchapter are available for inspection or copying under s. 19.35 (1).

202.17(2) (2) Fiscal records; inspection; retention. All charitable organizations, fund-raising counsels, professional fund-raisers, and unpaid solicitors shall keep true records concerning activities regulated by this subchapter in a form that will enable them accurately to provide the information required by this subchapter. Upon demand, those records shall be made available to the department for inspection and copying. The records shall be retained by the charitable organization, fund-raising counsel, professional fund-raiser, or unpaid solicitor for at least 3 years after the end of the fiscal year to which they relate.

202.17(3) (3) Exchange of information. The department may exchange with the appropriate authority of any other state or of the United States information with respect to charitable organizations, fund-raising counsel, professional fund-raisers, unpaid solicitors, and commercial coventurers.

202.17(4) (4) Examination of documents and witnesses.

202.17(4)(a) (a) If the department of justice has reason to believe a person has violated or is violating this subchapter or the rules promulgated under this subchapter, it may conduct an investigation to determine whether the person has violated or is violating those provisions. The department of justice may subpoena persons and require the production of books and other documents to aid in its investigations of alleged violations of this subchapter.

202.17(4)(b) (b) A person upon whom a notice of the taking of testimony or examination of documents is served under this subsection shall comply with the terms of the notice unless otherwise provided by the order of a court of this state.

202.17(4)(c) (c) The department of justice may file in the circuit court for the county in which a person resides or in which the person’s principal place of business is located, or in the circuit court for Dane County if the person is a nonresident or has no principal place of business in this state, and serve upon the person, a petition for an order of the court for the enforcement of this subsection. Disobedience of a final order entered under this paragraph by a court is punishable as a contempt of court under ch. 785.

202.17(5) (5) Substitute service upon department. A charitable organization, fund-raising counsel, professional fund-raiser, or commercial coventurer that has its principal place of business outside of this state or is organized under laws other than the laws of this state and that is subject to this subchapter shall be considered to have irrevocably appointed the department as its agent for the service of process or notice directed to the charitable organization, fund-raising counsel, professional fund-raiser, or commercial coventurer or to any of its partners, principal officers, or directors in an action or proceeding brought under this subchapter. Service of process or notice upon the department shall be made by personally delivering to and leaving with the department a copy of the process or notice. That service shall be sufficient service if the department immediately sends notice of the service and a copy of the process or notice to the charitable organization, fund-raising counsel, professional fund-raiser, commercial coventurer, or other person to whom it is directed by registered mail, with return receipt requested, at the last address known to the department.

202.17 History History: 1991 a. 278; 1995 a. 27; 2013 a. 20 s. 2215; Stats. 2013 s. 202.17; 2015 a. 163.

202.18 202.18 Penalties and enforcement.

202.18(1) (1) 

202.18(1)(a) (a) The department of justice may bring an action to prosecute a violation of this subchapter or the rules promulgated under this subchapter, including an action for temporary or permanent injunction.

202.18(1)(b) (b) Upon finding that a person has violated this subchapter or the applicable rules promulgated under s. 202.07 (4m) or this subchapter, the court may make any necessary order or judgment, including but not limited to injunctions, restitution, and, notwithstanding s. 814.04, award of reasonable attorney fees and costs of investigation and litigation, and, except as provided in par. (c), may impose a forfeiture of not less than $100 nor more than $10,000 for each violation.

202.18(1)(c) (c)

202.18(1)(c)1. 1. A person who violates s. 202.17 (4) (b) may be required to forfeit not more than $5,000, unless the person establishes reasonable cause for the violation.

202.18(1)(c)2. 2. A person who, with intent to avoid, prevent, or interfere with a civil investigation under this subsection, does any of the following may be required to forfeit not more than $5,000:

202.18(1)(c)2.a. a. Alters or by any other means falsifies, removes from any place, conceals, withholds, destroys, or mutilates any documentary material in the possession, custody, or control of a person subject to notice of the taking of testimony or examination of documents under s. 202.17 (4).

202.18(1)(c)2.b. b. Knowingly conceals relevant information.

202.18(1)(d) (d) A charitable organization, fund-raising counsel, professional fund-raiser, commercial coventurer, or any other person who violates the terms of an injunction or other order entered under this subsection may be required to forfeit, in addition to all other remedies, not less than $1,000 nor more than $10,000 for each violation. The department of justice may recover the forfeiture in a civil action. Each separate violation of an order entered under this subsection is a separate offense, except that each day of a violation through continuing failure to obey an order is a separate offense.

202.18(1)(e) (e) No charitable organization may indemnify an officer, employee, or director for any costs, fees, restitution, or forfeitures assessed against that individual by the court under par. (b), (c), or (d) unless the court determines that the individual acted in good faith and reasonably believed the conduct was in or not opposed to the best interests of the charitable organization.

202.18(2) (2) The department or the department of justice may accept a written assurance of discontinuance of any act or practice alleged to be a violation of this subchapter or the rules promulgated under this subchapter from the person who has engaged in the act or practice. The assurance may, among other terms, include a stipulation for the voluntary payment by the person of the costs of investigation, or of an amount to be held in escrow pending the outcome of an action or as restitution to aggrieved persons, or both. The department or department of justice may at any time reopen a matter in which an assurance of discontinuance is accepted for further proceedings if the department or department of justice determines that reopening the matter is in the public interest.

202.18 History History: 1991 a. 278; 2013 a. 20 s. 2217; Stats. 2013 s. 202.18; 2015 a. 163.

subch. III of ch. 202 SUBCHAPTER III

PROFESSIONAL EMPLOYER ORGANIZATIONS

202.21 202.21 Definitions. In this subchapter:

202.21(1) (1) “Applicant” means a professional employer organization or a professional employer group that applies for initial or renewal registration under s. 202.22.

202.21(2) (2) “Client” means any person that enters into a written contract with a professional employer organization or a professional employer group for the provision of the nontemporary, ongoing workforce of the person.

202.21(3) (3) “Controlling person” means any of the following:

202.21(3)(a) (a) A person who, individually or acting in concert with one or more other persons, owns or controls, directly or indirectly, 25 percent or more of the ownership interest of an applicant or registrant.

202.21(3)(b) (b) A person who serves as president or chief executive officer of an applicant or registrant or who otherwise has the authority to act as the senior executive officer of an applicant or registrant.

202.21(3m) (3m) “Department” means the department of financial institutions.

202.21(4) (4) “Professional employer group” means 2 or more professional employer organizations that are controlled by the same person.

202.21(5) (5) “Professional employer organization” means a person that is engaged in the business of entering into written contracts for the provision of the nontemporary, ongoing employee workforce of a client and providing services under those contracts and that under those contracts has the obligation to pay the employees providing services for those clients from its own accounts, regardless of whether the person uses the term “professional employer organization,” “PEO,” “staff leasing company,” “registered staff leasing company,” “employee leasing company,” or “administrative employer,” or uses any other name, as part of the person’s business name or to describe the person’s business. “Professional employer organization” does not mean a temporary help agency, as defined in s. 102.01 (2) (f), or a temporary help company, as defined in s. 108.02 (24m).

202.21(6) (6) “Registrant” means a professional employer organization or a professional employer group that is registered under s. 202.22.

202.21 History History: 2007 a. 189; 2009 a. 174; 2013 a. 20 ss. 1990, 2233; Stats. 2013 s. 202.21; 2015 a. 163.

202.22 202.22 Registration requirements.

202.22(1) (1) Registration required; use of titles.

202.22(1)(a) (a) No person may operate as a professional employer organization or professional employer group, advertise that the person is a professional employer organization or professional employer group, or otherwise hold itself out as a professional employer organization or professional employer group unless the person first registers with the department as provided in this section.

202.22(1)(b) (b) No person may designate as the person’s title, or append to the person’s name the words or letters, “professional employer organization,” “P.E.O.,” “professional employer group,” “P.E.G.,” “staff leasing company,” “registered staff leasing company,” “employee leasing company,” or “administrative employer,” or other similar titles or letters, or use those titles, words, or letters to describe the person’s business or represent that the person or the person’s business is registered or licensed as a “professional employer organization,” “P.E.O.,” “professional employer group,” “P.E.G.,” “staff leasing company,” “registered staff leasing company,” “employee leasing company,” or “administrative employer,” unless the person is registered under this section.

202.22(2) (2) Application for registration. Except as provided in sub. (7) (b), an applicant for registration under this section shall submit to the department an application for registration in a form and manner prescribed by the department. Each application shall be accompanied by any information required by the department, including all of the following:

202.22(2)(am) (am) The registration fee determined by the department under s. 202.041.

202.22(2)(f) (f)

202.22(2)(f)1. 1. Except as provided under subd. 2., a financial statement that sets forth the financial condition of the applicant as of a date that is not more than 13 months preceding the date of the application, that is prepared in accordance with generally accepted accounting principles, and that has been audited by an independent certified public accountant. The financial statement shall be without qualification as to the going concern status of the applicant. A professional employer group may meet the requirements of this subdivision by submitting a combined or consolidated audited financial statement. An applicant that does not have sufficient operating history to have an audited financial statement that is based on at least 12 months of operating history may meet the requirements of this subdivision by submitting financial statements that have been reviewed by an independent certified public accountant.

202.22(2)(f)2. 2. Subdivision 1. does not apply to a professional employer organization or professional employer group applying for registration under sub. (5).

202.22(3) (3) Registration expiration. All professional employer organization and professional employer group registrations expire on July 31 of each year.

202.22(4) (4) Updated financial statement.

202.22(4)(a) (a) Except as provided in par. (b) and sub. (7) (b), a registrant shall submit with each renewal application a financial statement, as specified in sub. (2) (f) 1., updated to reflect the current financial condition of the registrant.

202.22(4)(b) (b) A registrant whose fiscal year end is March 31, April 30, or May 31 may apply to the department for an extension until August 31, September 30, or October 31, respectively, to submit the updated financial statement required under par. (a). This application shall be accompanied by any information or documentation required by the department, and may be denied by the department.

202.22(5) (5) Small operations registration.

202.22(5)(a) (a) Except as provided in sub. (7) (b), a professional employer organization or professional employer group that is domiciled outside this state, that is registered or licensed as a professional employer organization or professional employer group in another state, that does not maintain an office in this state or directly solicit clients that are located or domiciled in this state, and that has no more than 50 employees performing services for clients in this state on any given day may apply for small operations registration under this section by submitting to the department an application for small operations registration in a form and manner prescribed by the department and paying the initial registration fee determined by the department under s. 202.041. An applicant that is seeking small operations registration shall, in addition to the information required under sub. (2), provide the department with information and documentation showing that the applicant meets the qualifications specified in this paragraph for small operations registration.

202.22(5)(d) (d) Except as provided in sub. (7) (b), a professional employer organization or professional employer group registered under this subsection that wishes to renew its small operations registration shall, in addition to complying with sub. (2), provide the department with information and documentation showing that the professional employer organization or professional employer group continues to meet the qualifications specified in par. (a) for small operations registration.

202.22(5)(e) (e) A professional employer organization or professional employer group registered under this subsection is not required to comply with the financial capability requirement under s. 202.23.

202.22(6) (6) Professional employer group registration. Except as provided in sub. (7) (b), 2 or more professional employer organizations that are part of a professional employer group may register under this section or renew a registration by providing the information required under subs. (2) and (4) (a) or sub. (5) on a combined or consolidated basis, paying the initial registration or renewal fee determined by the department under s. 202.041, and guaranteeing each other’s obligations. If a professional employer group provides a combined or consolidated financial statement under sub. (2) (f) 1. that includes the financial condition of entities that are not part of the professional employer group, the controlling person shall guarantee the obligations of the professional employer organizations in the professional employer group.

202.22(7) (7) Alternative registration.

202.22(7)(b) (b) The department may allow the registration of a professional employer organization or professional employer group without compliance with sub. (2), (4), (5), or (6), s. 202.23, or rules promulgated under s. 202.07 (4m) or 202.26 on acceptance by the department of assurance, provided by a bonded, independent, and qualified assurance organization that has been approved by the department, satisfactory to the department that the professional employer organization or professional employer group is qualified to operate as a professional employer organization or a professional employer group in this state.

202.22(7)(c) (c) This subsection does not limit the authority of the department to require a professional employer organization or professional employer group to register as provided in sub. (2), (4), (5), or (6), to maintain proof of financial capability as required under s. 202.23, or to comply with this chapter and the rules promulgated under s. 202.07 (4m) or 202.26; to investigate an applicant or registrant and deny registration or renewal registration under s. 202.021, or to investigate an applicant, registrant, or controlling person and take disciplinary action under s. 202.06.

202.22(9) (9) List of registrants; confidentiality.

202.22(9)(am) (am) The department shall maintain and periodically update a list of all professional employer organizations and professional employer groups registered under this section, and shall make the list available upon request. The list shall include the address of each registrant.

202.22(9)(bm) (bm) Except as provided in par. (am), all records maintained by the department that contain any information obtained from an applicant or registrant are confidential and not open to public inspection or copying under s. 19.35 (1) unless one of the following applies:

202.22(9)(bm)1. 1. Disclosure of the record is necessary for the administration of this section.

202.22(9)(bm)2. 2. A court of competent jurisdiction in this state orders the department to release the record.

202.22(9)(bm)3. 3. The requester is the department of children and families or a county child support agency under s. 59.53 (5), the request is made under s. 49.22 (2m), and the request is limited to the name, home address, and business address of the applicant, registrant, or controlling person who is the subject of the request and any financial information about the applicant, registrant, or controlling person contained in the record.

202.22(9)(bm)4. 4. The department of revenue requests the record for the purpose of locating a person, or the assets of a person, who has failed to file tax returns, who has underreported taxable income, or who is a delinquent taxpayer; identifying fraudulent tax returns; or providing information for tax-related prosecutions.

202.22 History History: 2007 a. 189; 2009 a. 29, 174, 180; 2013 a. 20 ss. 2234 to 2236, 2238 to 2240, 2243 to 2248; Stats. 2013 s. 202.22; 2015 a. 163; 2021 a. 238 s. 45.

202.23 202.23 Financial capability. Except as provided in s. 202.22 (5) (e) or (7) (b), a professional employer organization or professional employer group shall maintain one of the following:

202.23(1) (1) Working capital requirement. Working capital, as defined by generally accepted accounting principles, of not less than $100,000, as shown in the financial statement submitted to the department under s. 202.22 (2) (f) 1., (4) (a), or (6).

202.23(2) (2) Alternative commitment. A bond in an amount that is not less than $100,000 or, if the financial statement submitted to the department under s. 202.22 (2) (f) 1., (4), or (6) indicates negative working capital, a bond in an amount that is not less than $100,000 plus an amount that is sufficient to cover that negative amount. The bond shall be in a form approved by the department and shall secure the payment by the professional employer organization or professional employer group of any wages, salaries, employee benefits, worker’s compensation insurance premiums, payroll taxes, unemployment insurance contributions, or other amounts that are payable to or with respect to an employee performing services for a client if the professional employer organization or professional employer group does not make those payments when due. The bond shall be established in favor of the department, for the benefit of the state and any employee to whom or with respect to whom the professional employer organization or professional employer group does not make a payment described in this subsection when due. The professional employer organization or professional employer group shall file with the department any agreement, instrument, or other document that is necessary to enforce the commitment against the professional employer organization or professional employer group, or against any relevant 3rd party, or both.

202.23 History History: 2007 a. 189; 2009 a. 174; 2013 a. 20 s. 2249; Stats. 2013 s. 202.23; 2013 a. 168 s. 21; 2015 a. 163.

202.24 202.24 Rights, duties, and obligations unaffected.

202.24(1) (1) Professional employer organization and professional employer group not insurance. A professional employer organization or professional employer group that offers, markets, sells, administers, or provides services that include the provision of employee benefit plans for the employees of the professional employer organization or professional employer group performing services for a client is not engaged in the business or sale of insurance or in the business of an employee benefit plan administrator under ch. 633. This subsection shall be liberally construed to permit professional employer organizations and professional employer groups to provide employee benefit plans as provided in this subsection without being considered to be engaged in the business or sale of insurance or in the business of an employee benefit plan administrator under ch. 633. If a professional employer organization or professional employer group provides life insurance, health care, or disability income benefits for its employees performing services for a client, all of the following apply: