(820 ILCS 405/206.1)

Sec. 206.1. Employment; employee leasing company.

A. For purposes of this Section:

1. "Client" means an individual or entity which has contracted with an employee leasing company to supply it with or assume responsibility for personnel management of one or more workers to perform services on an on-going basis rather than under a temporary help arrangement, as defined in Section 15 of the Employee Leasing Company Act.

2. "Employee leasing company" means an individual or entity which contracts with a client to supply or assume responsibility for personnel management of one or more workers to perform services for the client on an on-going basis rather than under a temporary help arrangement, as defined in Section 15 of the Employee Leasing Company Act.

B. Subject to subsection C, services performed by an individual under a contract between an employee leasing company and client, including but not limited to services performed in the capacity of a corporate officer of the client, are services in "employment" of the employee leasing company and are not services in "employment" of the client if all of the following conditions are met:

1. The employee leasing company pays the individual for the services directly from its own accounts; and

2. The employee leasing company, exclusively or in conjunction with the client, retains the right to direct and control the individual in the performance of the services; and

3. The employee leasing company, exclusively or in conjunction with the client, retains the right to hire and terminate the individual; and

4. The employee leasing company reports each client in the manner the Director prescribes by regulation; and

5. The employee leasing company has provided, and there remains in effect, such irrevocable indemnification, as the Director may require by rule, to create a primary obligation on the part of the provider to the Illinois Department of Employment Security for obligations of the employee leasing company accrued and final under this Act. The rule may prescribe the form the indemnification shall take including, but not limited to, a surety bond or an irrevocable standby letter of credit. The obligation required pursuant to the rule shall not exceed $1,000,000.

C. Notwithstanding subsection B, services performed by an individual under a contract between an employee leasing company and client, including but not limited to services performed in the capacity of a corporate officer of the client, are services in "employment" of the client and are not services in "employment" of the employee leasing company if:

1. The contribution rate, or, where applicable, the amended contribution rate, of the client is greater than the sum of the fund building rate established for the year pursuant to Section 1506.3 of this Act plus the greater of 2.7% or 2.7% times the adjusted state experience factor for the year; and

2. The contribution rate, or, where applicable, the amended contribution rate, of the employee leasing company is less than the contribution rate, or, where applicable, the amended contribution rate of the client by more than 1.5% absolute.

D. Except as provided in this Section and notwithstanding any other provision of this Act to the contrary, services performed by an individual under a contract between an employee leasing company and client, including but not limited to services performed in the capacity of a corporate officer of the client, are services in "employment" of the client and are not services in "employment" of the employee leasing company.

E. Nothing in this Section shall be construed or used to effect the existence of an employment relationship other than for purposes of this Act.

(Source: P.A. 98-1133, eff. 12-23-14.)