The following words and phrases when used in this act shall have the meanings given to them in this section unless the context clearly indicates otherwise:

“Administrative fee.” The fee charged to a client by a professional employer organization for professional employer services. The administrative fee shall not be deemed to include any amount of a fee by the professional employer organization that is for wages and salaries, benefits, workers' compensation, payroll taxes, withholding or other assessment paid by the professional employer organization to or on behalf of covered employees under the professional employer agreement.

“Client.” Any person who enters into a professional employer agreement with a professional employer organization.

“Coemployer.” A professional employer organization or client.

“Coemployment relationship.” A relationship which is intended to be an ongoing relationship rather than a temporary or project specific one, wherein the rights, duties and obligations of an employer which arise out of an employment relationship have been allocated between coemployers pursuant to a professional employer agreement and this act.

“Controlling person.” A person that owns, directly or indirectly, 10% or more of the equity interest in a professional employer organization.

“Covered employee.” An individual coemployed by a professional employer organization and a client who meets the following criteria:

“Department.” The Department of Labor and Industry of the Commonwealth.

“Direct hire employee.” An individual who is an employee of either the client or the PEO within the meaning of the act of June 2, 1915 (P.L. 736, No. 338),² known as the Workers' Compensation Act, and who is not a covered employee.

“Insurer.” A legal entity authorized or licensed to transact insurance business in accordance with the laws of this Commonwealth.

“Licensed producer.” An individual or business entity that is licensed as an insurance producer by the Insurance Department in accordance with the provisions of Article VI-A of the act of May 17, 1921 (P. L. 789, No. 285),³ known as The Insurance Department Act of 1921.

“Master policy basis.” An agreement under which a single workers' compensation policy issued to the professional employer organization provides coverage for more than one client and may provide coverage to the professional employer organization with respect to its direct hire employees. Two or more clients that are insured under the same policy solely because they are under common ownership are considered a single client for purposes of this definition.

“Multiple coordinated policy basis.” An agreement under which a separate workers' compensation policy is issued to the professional employer organization on behalf of each client or group of affiliated clients with payment obligations and certain policy communications related to such workers' compensation policy coordinated through the professional employer organization.

“PEO group.” Two or more professional employer organizations that are majority owned or commonly controlled by the same entity, parent or controlling person.

“Person.” Any individual, partnership, corporation, limited liability company, association or any other form of legally recognized entity.

“Professional employer agreement.” A contract by and between a client and a professional employer organization that provides:

“Professional employer organization” or “PEO.” Any person engaged in the business of providing professional employer services.

“Professional employer services.” The business of entering into coemployment relationships under this act.

“Temporary help services.” Services consisting of a person: