Archives > 1976 South Carolina Code of Laws - Previous Versions > 2003 Session > Title 40

This statutory database is current through the 2003 Regular Session of the South Carolina General Assembly. Changes to the statutes enacted by the 2004 General Assembly, which will convene in January 2004, will be incorporated as soon as possible. Some changes enacted by the 2004 General Assembly may take immediate effect. The State of South Carolina and the South Carolina Legislative Council make no warranty as to the accuracy of the data, and users rely on the data entirely at their own risk.




SECTION 40-68-10. Definitions.

As used in this chapter:

(1) "Applicant" means a business seeking to be licensed under this chapter or seeking the renewal of a license under this chapter.

(2) "Client company" means a person that contracts with a licensee and is assigned employees by the licensee under that contract.

(3) "Administrator" means the administrator of the Department of Consumer Affairs.

(4) "Controlling person" means:

(a) an officer or director of a corporation seeking to offer staff leasing services, a shareholder holding ten percent or more of the voting stock of a corporation seeking to offer staff leasing services, or a partner of a partnership seeking to offer staff leasing services;

(b) an individual who possesses, directly or indirectly, the power to direct or cause the direction of the management or policies of a company seeking to offer staff leasing services through the ownership of voting securities, by contract or otherwise, and who is actively involved in the day-to-day management of the company; or

(c) an individual employed, appointed, or authorized by a business seeking to offer staff leasing services to enter into a contractual relationship with a client company on behalf of the business.

(5) "Department" means the South Carolina Department of Consumer Affairs.

(6) "Licensee" means a person licensed under this chapter to provide staff leasing services. The term includes a staff leasing services group licensed under Section 40-68-80.

(7) "Person" means an individual, association, corporation, partnership, or other private legal entity.

(8) "Staff leasing services" means an arrangement by which employees of a licensee are assigned to work at a client company and in which employment responsibilities are shared by the licensee and the client company. The employee's assignment is intended to be of a long-term or continuing nature, rather than temporary or seasonal in nature, and a majority of the work force at a client company worksite or a specialized group within that work force consists of assigned employees of the licensee. This does not include family-related businesses or similar groups that do not meet the requirements of item (8). Staff leasing services does not include temporary employees.

(9) "Staff leasing services company" means an individual business entity that offers staff leasing services.

(10) "Staff leasing services group" means a combination of staff leasing services companies that operates under a group license issued under Section 40-68-80.

(11) "Assigned employee" means a person performing services for a client company as affected by a contract between a licensee and client company in which employment responsibilities are shared.

(12) "Entire work force" means all persons engaged by a client company and are employees as defined in Title 42 including persons considered employees under Sections 42-1-400, 42-1-410, and 42-1-420.

SECTION 40-68-20. Department to adopt regulations; Administrative Procedures Act to govern; licensee governed by chapter and regulations.

The department shall adopt regulations necessary to administer this chapter. Regulations must be adopted in compliance with the Administrative Procedures Act. A licensee is governed and controlled by this chapter and the regulations adopted by the department.

SECTION 40-68-30. License required; application and fee; information required as to each member of group; ineligibility for license for year after denial or revocation of license, with exceptions.

(A) A person may not engage in or offer staff leasing services in this State without holding a license issued under this chapter. A person that desires a staff leasing services company license shall file with the department a written application accompanied by an application fee of one hundred dollars for each controlling person. In addition, the application fee is two hundred dollars for each staff leasing services company, and three hundred dollars for each staff leasing services group.

(B) The department may require an applicant for a license to provide information and certifications to determine whether the applicant meets the licensing requirements of this chapter and also whether individuals affiliated with the applicant are qualified to serve as controlling persons.

(C) An application for a staff leasing services group license under Section 40-68-80 must provide the information required by this chapter for each member of the group. An applicant or licensee is ineligible for a license for one year after the date of final departmental action on the denial or revocation of a license applied for or issued under this chapter. This restriction does not apply to a denial or revocation of a license if the basis of the action was:

(1) an inadvertent error or omission in the application if that error or omission is promptly corrected;

(2) the experience documented to the department was insufficient at the time of the previous application;

(3) the department was unable to complete the criminal background investigation required under Section 40-68-40 because of insufficient information received from a local, state, or federal law enforcement agency; or

(4) that one or more of the controlling persons affiliated with the applicant or licensee was determined by the department to be unsuitable, if that unsuitable controlling person has in fact ceased to be a controlling person of the applicant or license.

SECTION 40-68-40. Qualifications to serve as controlling person; background investigation; fingerprinting; effect of conviction of crime; designating agent for service of process; minimum net worth requirement.

(A) To be qualified to serve as a controlling person of a license under this chapter, a person must be at least eighteen years of age, be of good moral character, and have educational, managerial, or business experience relevant to:

(1) operation of a business entity offering staff leasing services; or

(2) services as a controlling person of a staff leasing services company.

For the purposes of this section, "good moral character" means a personal history of honesty, trustworthiness, fairness, a good reputation for fair dealing, and respect for the rights of others and for the laws of this State and nation.

(B) The department shall conduct a background investigation of each individual applicant and of each controlling person of each applicant and require fingerprinting of each applicant and each controlling person to determine whether the applicant or controlling person is qualified under this chapter. The department may deny an application for the issuance or renewal of a license if it finds that a controlling person is not qualified under this chapter. The investigation shall include:

(1) the submission of fingerprints for processing through appropriate local, state, and federal law enforcement agencies; and

(2) examination by the department, if necessary, of police or other law enforcement records maintained by local, state, or federal law enforcement agencies.

(C) Conviction of a crime does not automatically disqualify a controlling person, require the revocation of a license, or require the denial of an application for a new or renewed license.

(D) A licensee shall maintain a registered agent for the service of process in this State.

(E) An applicant for an original or renewal license must demonstrate a net worth of at least fifty thousand dollars. The applicant shall demonstrate the net worth to the department by providing the department with the applicant's audited financial statement. The net worth requirement also may be satisfied through guarantees, letters of credit, or other security acceptable to the department in a combined total amount of at least fifty thousand dollars. A guaranty is not acceptable to satisfy this subsection unless the applicant submits sufficient evidence to satisfy the department that the guarantor has adequate resources to satisfy the obligations of the guaranty. For applicants operating a staff leasing services company or staff leasing services group on or before January 1, 1991, the net worth requirement will be satisfied by the documentation of a positive net worth.

(F) A document submitted to establish net worth must reflect the net worth as of a date not earlier than six months before the date on which the application is submitted, and must be prepared by a certified public accountant. Information supplied regarding net worth is proprietary and confidential and is exempt from disclosure to third parties.

SECTION 40-68-50. License fees; biennial assessment fee; submission of financial data to ensure compliance.

(A) An applicant for an original or renewal license shall pay to the department on the issuance of the license or license renewal a fee. License fees are assessed as follows:

(1) in the first year of the biennium:

(a) two thousand dollars for a resident staff leasing services company;

(b) four thousand dollars for a resident staff leasing services group;

(c) two thousand dollars for a nonresident staff leasing services company. However, if the state of residency of the nonresident leasing company imposes a greater fee for licensing nonresident applicants, then the greater fee is assessed. The maximum fee to be charged is five thousand dollars for a nonresident staff leasing services company;

(d) four thousand dollars for each nonresident staff leasing services group. However, if the state of residency of the nonresident staff leasing services group imposes a greater fee for licensing nonresident applicants, then the greater fee is assessed. The maximum fee to be charged is ten thousand dollars for each nonresident staff leasing services group;

(2) in the second year of the biennium:

(a) one thousand dollars for each resident staff leasing services company;

(b) three thousand, five hundred dollars for each resident staff leasing services group;

(c) one thousand dollars for a nonresident staff leasing services company. However, if the state of residency of the nonresident leasing company imposes a greater fee for licensing nonresident applicants, then the greater fee is assessed. The maximum fee to be charged is two thousand, five hundred dollars for a nonresident staff leasing services company;

(d) three thousand, five hundred dollars for each nonresident staff leasing services group. However, if the state of residency of the nonresident staff leasing services group imposes a greater fee for licensing nonresident applicants, then the greater fee is assessed. The maximum fee to be charged is five thousand dollars for each nonresident staff leasing services group;

(3) for renewal licenses:

(a) fifteen hundred dollars for a staff leasing services company;

(b) three thousand dollars for a staff leasing services group;

(c) fifteen hundred dollars for a nonresident staff leasing services company. However, if the state of residency of the nonresident leasing company imposes a greater fee for licensing nonresident applicants, then the greater fee is assessed. The maximum fee to be charged is three thousand, seven hundred fifty dollars for a nonresident staff leasing services company;

(d) three thousand dollars for each nonresident staff leasing services group. However, if the state of residency of the nonresident staff leasing services group imposes a greater fee for licensing nonresident applicants, then the greater fee is assessed. The maximum fee to be charged is seven thousand, five hundred dollars for each nonresident staff leasing services group.

(B) In addition to the license fee, the department may levy a biennial assessment for each staff leasing services company and each staff leasing services group sufficient to cover all costs for regulation of the profession pursuant to this chapter and other applicable provisions of law. The biennial assessment fee is:

(1) due and payable upon initial licensure and subsequent renewals and one year before the expiration of any licensure period; and

(2) based on the gross South Carolina payroll, excluding tips and gratuities, of a staff leasing services company's or staff leasing services group's clients during the period beginning nine quarters before and ending one quarter before each assessment;

(3) calculated in accordance with the following table:

Amount of Gross Assessment Fee

South Carolina Payroll Due

less than $500,000 $ 500

$500,001-$1,000,000 $ 750

$1,000,001-$2,500,000 $1,000

$2,500,001-$5,000,000 $1,250

$5,000,001-$10,000,000 $1,750

$10,000,001-$15,000,000 $2,250

$15,000,001-$25,000,000 $3,000

$25,000,001-$50,000,000 $3,750

over $50,000,000 $4,000

(C) In order to ensure compliance with the requirements of subsection (B), each licensee annually shall submit a statement of total gross South Carolina payroll, excluding tips and gratuities, along with copies of all South Carolina Unemployment Compensation tax returns for the preceding calendar year.

(D) The total licensure fee and biennial assessments during a licensure period must not exceed:

(1) eight thousand, seven hundred fifty dollars for a staff leasing services company license; or

(2) ten thousand dollars for a staff leasing services group license issued under Section 40-68-90 of this chapter.

SECTION 40-68-60. Terms of agreement to be established and in writing; notice and delivery of notice to assigned employees; posting of notice by client company; notice or knowledge of injury.

(A) A licensee shall establish the terms of a staff leasing services agreement by a written contract between the licensee and the client company. The licensee shall give written notice of the agreement as it affects assigned employees to each employee assigned to a client company in the manner provided in this section.

(B) A written explanation of the agreement must be provided to each assigned employee by delivering it to the employee personally. The explanation shall state, substantially, the terms of the agreement between the licensee and client company and include the same notice which is required to be posted in the client company's place of business.

(C) The client company shall post in each of its places of business in a conspicuous place that is in clear and unobstructed view of the assigned employees a notice stating, substantially, the following:

"We are operating under and subject to the Workers' Compensation Act of South Carolina. In case of accidental injury or death to an employee, the injured employee, or someone acting on his or her behalf, shall notify immediately (insert name of staff leasing company, address, and telephone number) or (name of client company, address, and telephone number). Failure to give immediate notice may be the cause of serious delay in the payment of compensation to you or your beneficiaries and may result in failure to receive any compensation benefits."

(D) As between the client company, the staff leasing company, and the employee, the notice to or acknowledgment of the occurrence of an injury on the part of the client company or the staff leasing company is notice to or knowledge on the part of the staff leasing company and its workers' compensation insurer or the client company and its workers' compensation insurer, or both.

SECTION 40-68-70. Requirements of contract between licensee and client company; investigation of client company's work force; securing workers' compensation insurance coverage; licensee is employer of assigned employees.

(A) A contract between a licensee and a client company must provide that the licensee:

(1) reserves the right of direction and control over employees assigned to a client company.

(2) assumes responsibility for the payment of wages to the assigned employees without regard to payments by the client to the licensee;

(3) assumes responsibility for the payment of payroll taxes and collection of taxes from payroll on assigned employees;

(4) retains the right to hire, fire, discipline, and reassign the assigned employees;

(5) retains the right of direction and control over the adoption of employment and safety policies and the management of workers' compensation claims, claim filings, and related procedures on joint agreement by the client company and the licensee; and

(6) agrees that:

(a) notice to or acknowledgment of the occurrence of an injury on the part of the client company is notice to or knowledge on the part of the licensee and its workers' compensation insurer;

(b) for the purposes of Title 42, the jurisdiction of the client company is the jurisdiction of the licensee and its workers' compensation insurer;

(c) the licensee and its workers' compensation insurer is bound by and subject to the awards, judgments, or decrees rendered against them under the provisions of Title 42; and

(d) insolvency, bankruptcy, or discharge in bankruptcy of the licensee or client company does not relieve the licensee, client company, their respective workers' compensation insurers from payment of compensation for disability or death sustained by an employee during the life of a workers' compensation insurance policy; and

(7) with a client company, in the contract, shall specify whether the licensee, the client company, or both, are securing workers' compensation liability.

(B) A licensee, who secures workers' compensation insurance for a client company before the execution of the contract and on an annual basis, shall conduct a good faith investigation of the client company's business. The investigation must determine if the client company engages any nonassigned employees, including those considered employees under Title 42 in any part of the client company's trade, business, or occupation. Upon a determination that a client company's entire work force includes nonassigned employees, the contract must require the client company to secure and maintain workers' compensation insurance.

(C) Upon the failure or neglect of a client company to secure and maintain workers' compensation insurance, the licensee and its workers' compensation carrier agree and are liable to pay to a worker employed in the work of the client company compensation under Title 42 which the licensee would have been liable to pay if the worker had been employed by the licensee as provided in Section 40-68-120.

(D) A licensee's workers' compensation insurer providing coverage to a client company's assigned employees must be provided the information derived from the licensee's investigation of the client company's business.

(E) The licensee is the employer of the employees assigned to a client company. The rights and remedies granted by Title 42 to an employee when he and the licensee have accepted the provisions of Title 42 to pay and accept compensation exclude all other rights as provided in Section 42-1-540. This chapter does not affect the rights, duties, or liabilities of licensees, client companies, or employees under federal law.

SECTION 40-68-75. Responsibilities of client company with respect to workers' compensation insurance; penalties and liabilities for violation.

(A) An employer subject to the provisions of Title 42 who contracts with a staff leasing services company or group continues to be subject to the provisions of Title 42 and shall comply with Title 42 with regard to procuring and maintaining workers' compensation insurance for nonassigned employees. For purposes of construction, the term "employees" in Section 42-1-360 includes both assigned and nonassigned employees.

(B) A client company who refuses or neglects to provide workers' compensation insurance coverage to its nonassigned employees must be fined one thousand dollars a day for each nonassigned employee for each day the client company refuses or neglects to provide workers' compensation insurance. In this event, the client company is liable during the continuance of the refusal or neglect to an employee either for compensation under Title 42 or in an action at law instituted by the employee or his personal representative against the client company to recover damages for personal injury or death by accident. In the action at law, the client company may not be permitted to defend upon any of the grounds mentioned in Section 42-1-510 nor shall Section 42-1-540 apply. The fine provided in this section must be assessed by the Workers' Compensation Commission in an open hearing with the right of review and appeal as in other cases.

SECTION 40-68-80. Several companies majority-owned by same entity may constitute staff leasing services group; effect of status as group.

A group of at least two but not more than five staff leasing services companies that are majority-owned by the same entity may be licensed as a staff leasing services group. A staff leasing services group may satisfy the reporting and financial requirements of the chapter on a consolidated basis. As a condition of the issuance of a staff leasing services group license, each person that is a member of the group must guarantee payment of all financial obligations of other members of the group.

SECTION 40-68-90. Nonresident company or group; restricted license; appointment of entity for receipt of legal process.

(A) The department may issue a restricted license to a nonresident staff leasing services company or staff leasing services group for limited operation within this State under the following conditions if the:

(1) applicant's state of residence provides for licensing of staff leasing services companies, the applicant is licensed and in good standing in its state of residence, and the applicant's state of residence grants a similar privilege for restricted licensing to staff leasing services companies or staff leasing services groups that are residents in South Carolina;

(2) applicant does not maintain an office, sales force, or representatives in this State, and it does not solicit clients that are residents in this State; and

(3) applicant does not have more than forty leased employees working in this State.

(B) An applicant for a restricted license is exempt from the requirements of Section 40-68-40(C) and (F).

(C) An applicant for a nonresident or restricted license shall file on a form approved by the department an appointment of a recognized and approved entity as its attorney to receive service of legal process issued against it in this State.

SECTION 40-68-100. Duty to issue license to qualified applicants; issuance within prescribed time; time license is valid; renewal.

The department shall issue a license to an applicant that meets the requirements of this chapter. The license must be issued not later than the ninetieth day after the date on which the completed application is filed with the department. A license issued by the department under this chapter is valid for two years. The department shall renew a license on receipt of a renewal application approved by the department and payment of the required renewal fees.

SECTION 40-68-110. Disclosure by licensee of information as to insurance or benefit plans for benefit of assigned employees; other reports may be required by regulation.

(A) A licensee shall disclose to the department, each client company, and its assigned employees, information relating to any insurance or benefit plan provided for the benefit of its assigned employees. The information must include:

(1) the type of coverage;

(2) the identity of each insurer for each type of coverage;

(3) the amount of benefits provided for each type of coverage and to whom or on whose behalf benefits are to be paid;

(4) the policy limits on each insurance policy; and

(5) whether the coverage is fully insured, partially insured, or fully self-funded.

(B) The administrator by regulation may require the filing by licensees of other reports necessary to the implementation of this chapter.

SECTION 40-68-120. Licensee's obtaining of workers' compensation coverage; licensee-sponsored and client-sponsored benefit plans for assigned employees; unemployment taxes; notification of start and end of relationship with client company.

(A) A licensee may elect to obtain workers' compensation insurance coverage in the same manner as any other employer as provided below:

(1) An insurer issuing the policy must be licensed in this State to write such policies.

(2) An insurer issuing a policy of workers' compensation insurance to a licensee may not plead as a defense:

(a) that the client company is not subject to Title 42. The insurer is estopped to deny coverage;

(b) lack of an employment relationship between a person engaged in an employment as defined in Title 42 and the client company;

(c) breach of contract by the licensee or client company. The insurer is not entitled to plead as a defense to an employee's claim for benefits any defects in the performance of a contract between the licensee and client company.

(3) No policy of insurance against liability arising under Title 42 may be issued to a licensee unless it contains the agreement of the insurer that it will promptly pay to the persons entitled to them all benefits conferred by Title 42 and all installments of the compensation that may be awarded or agreed upon and that the obligation is not affected by default of the licensee or client company or by default in giving notice required by the policy or otherwise.

(4) A policy of insurance issued to a licensee is, and must be construed as, a direct promise by the insurer to the person entitled to compensation enforceable in his name.

(5) The insurer agrees that:

(a) notice to or acknowledgment of the occurrence of an injury on the part of the client company is notice to or knowledge on the part of the licensee and its workers' compensation insurer;

(b) for purposes of Title 42, the jurisdiction of the client company is the jurisdiction of the licensee and its workers' compensation insurer;

(c) the licensee and its workers' compensation insurer, in all things, are bound by and subject to the awards, judgments, or decrees rendered against them under the provisions of Title 42; and

(d) insolvency, bankruptcy, or discharge bankruptcy of the licensee or client company does not relieve the workers' compensation insurer from the payment of compensation for disability or death sustained by an employee during the life of a workers' compensation insurance policy issued to the licensee.

(6) No agreement by an employee to pay a portion of a premium paid by the licensee or client company to an insurer or to contribute to a benefit fund or department maintained by a licensee or client company for the purpose of providing insurance under Title 42 is valid, and any licensee or client company who makes a deduction for the purpose from the pay of an employee entitled to benefits under Title 42 is guilty of a misdemeanor and, upon conviction, must be fined not more than one thousand dollars plus reimbursement to the employee of the deductions.

(7) When a person referred to as a licensee undertakes to provide assigned employees to a client company, the licensee is liable to pay a worker employed by the client company compensation under Title 42 which the licensee would have been liable to pay if the worker had been immediately employed by the licensee. When the licensee is liable to pay compensation under this section, it is entitled to indemnity from a client company who would have been liable to pay compensation to the worker independently of this section and have a cause of action therefor. This section must be construed to require that licensee's workers' compensation carrier is liable to pay compensation to the client company's entire work force with the licensee and carrier's right to indemnity from the client company.

(B) If workers' compensation coverage is obtained, that insurance must comply with the applicable provisions of the insurance laws of this State.

(C) A licensee is entitled to the same rights to obtain all types of insurance coverage, including endorsements obtained by other business entities doing business in this State.

(D) For companies who have obtained workers' compensation insurance coverage in the residual (assigned risk) market, the first three years that a client company has a contract with a licensee, the licensee shall pay workers' compensation insurance premiums based on the experience modification rate of the client company. The South Carolina Department of Insurance shall adopt regulations to implement this subsection. This subsection applies only to the residual (assigned risk) market.

(E) The licensee must categorize leased employees according to their classification within a client company.

(F) A licensee may sponsor and maintain employee benefit plans for the benefits of assigned employees. The employee benefit plans must comply with the applicable provisions of the insurance laws of this State. A client company may include assigned employees in a benefit plan sponsored by the client company. However, no licensee may sponsor and maintain a plan of self-insurance for health benefits or workers' compensation benefits after January 1, 1994.

(G) A staff leasing services company or staff leasing services group is responsible for the payment of unemployment taxes pursuant to law.

(H) Licensees, within thirty days, shall notify the South Carolina Employment Security Commission of the start and termination of the licensee's relationship with a client company.

SECTION 40-68-130. Form and content of licenses and notices; display.

(A) The department by regulation shall determine the form and content of:

(1) the licenses issued under this chapter; and

(2) notices required to be posted under this section.

(B) The license issued under this chapter must be posted in a conspicuous place in the principal place of business in this State of the licensee. The licensee shall display, in a place that is in clear and unobstructed public view, a notice stating that the business operated at the location is licensed and regulated by the department and that any questions or complaints should be directed to the department.

SECTION 40-68-140. Name under which business may be conducted; change of name or of location of primary office or records; addition of business offices; license not assignable.

(A) A licensee may not conduct business under a name other than that specified in the license. A license issued under this chapter is not assignable. A licensee may not conduct business under any fictitious or assumed name without prior written authorization from the department. The department may not authorize the use of a name that is so similar to that of a public office or agency or to that of another licensee that the public may be confused or misled by its use. A licensee may not conduct business under more than one name unless it has obtained a separate license for each name.

(B) A licensee may change its licensed name at any time by notifying the department and paying a fee for each change of name. The department by regulation shall set the fee for each name change in an amount not to exceed fifty dollars. A licensee may change its name on renewal of the license without the payment of the name change fee.

(C) A licensee must notify the department in writing of:

(1) a change in the location of its primary business office;

(2) the addition of more business offices; or

(3) a change in the location of business records maintained by the licensee.

SECTION 40-68-150. Prohibited acts; operation without license; wrongful use of title or representation of being licensed; use of forged or false information to obtain license or in disciplinary proceeding; use of expired or revoked license; penalties.

(A) A person may not:

(1) engage in staff leasing services without holding a license under this chapter as a staff leasing services company or a staff leasing services group;

(2) use the name or title "staff leasing services company", "licensed staff leasing services company", "licensed staff leasing services group", or "staff leasing services group", or otherwise represent that it is licensed under this chapter, unless the entity holds a license issued under this chapter;

(3) represent as the person's own the license of another person or represent that a person is licensed if the person does not hold a license;

(4) give false or forged evidence to the department in connection with obtaining or renewing a license or in connection with disciplinary proceeding under this chapter; or

(5) use or attempt to use a license which has expired or been revoked.

(B) A person who wilfully and voluntarily violates the provisions of this section is guilty of a misdemeanor and, upon conviction, must be imprisoned not more than one year or fined not more than fifty thousand dollars, or both.

SECTION 40-68-160. Disciplinary action; grounds; sanctions; notice, hearing, and other provisions of Administrative Procedures Act applicable; reinstatement.

(A) For the purposes of this section, "conviction" includes a plea of guilty or nolo contendere or a finding of guilt.

Disciplinary action may be taken against a licensee by the department on any of the following grounds:

(1) the conviction of a licensee or a controlling person of a licensee of bribery, fraud, or intentional or material misrepresentation in obtaining, attempting to obtain, or renewing a license;

(2) the conviction of a licensee or a controlling person of a licensee of a crime that relates to the operation of a staff leasing service or the ability of the licensee or a controlling person of a licensee to operate a staff leasing service;

(3) the conviction of a licensee or a controlling person of a licensee of a crime that relates to the classification, misclassification, or under-reporting of employees under the South Carolina Workers' Compensation Act;

(4) the conviction of a licensee or a controlling person of a licensee of a crime that relates to the establishment or maintenance of a self-insurance program, whether health insurance, workers' compensation insurance, or other insurance;

(5) the conviction of a licensee or a controlling person of a licensee of a crime that relates to fraud, deceit, or misconduct in the operation of a staff leasing service;

(6) engaging in staff leasing services without a license;

(7) transferring or attempting to transfer a license issued under this chapter;

(8) violating this chapter or any order or regulation issued by the department under this chapter;

(9) failing to notify the department, in writing, of the felony conviction of a controlling person not later than the thirtieth day after the date on which that conviction is entered;

(10) failing to cooperate with an investigation, examination, or audit of the licensee's records conducted by the licensee's insurance company or its designee, as provided by the insurance contract or as authorized by law by the South Carolina Department of Insurance;

(11) failing to notify the department and the South Carolina Department of Insurance not later than the thirtieth day after the effective date of a change in ownership, principal business address, or the address of accounts and records;

(12) failing to correct a tax filing or payment deficiencies within a reasonable time as determined by the department;

(13) refusing, after reasonable notice, to meet reasonable health and safety requirements within the licensee's control and made known to the licensee by a federal or state agency;

(14) failing to correct a delinquency in the payment of the licensee's insurance premiums within a reasonable time;

(15) failing to correct a delinquency in the payment of an employee benefit plan premiums or contributions within a reasonable time; or

(16) knowingly making a material misrepresentation to an insurance company, to the department, or other governmental agency.

(B) Upon finding that a licensee has violated one or more provisions of this section, the department may:

(1) deny an application for a license;

(2) revoke, restrict, or refuse to renew a license;

(3) may impose an administrative penalty in an amount not less than one thousand dollars for each violation, but not more than fifty thousand dollars;

(4) issue a reprimand; or

(5) place the licensee on probation for the period and subject to conditions that the department specifies.

(C) On revocation of a license, the licensee immediately shall return the revoked license to the department.

(D) Disciplinary action, a denial of an application for a new or renewal license or a revocation of a license, or a determination that a controlling person is unqualified may occur subject to the Administrative Procedures Act, with notice to, and an opportunity for a hearing by, the affected applicant, licensee, or controlling person.

(E) If a license is revoked or renewal is denied, the affected licensee may request a reinstatement hearing after a minimum of one year. The department may reinstate or renew the license only if the cause of the nonrenewal or revocation has been corrected.

SECTION 40-68-170. Fees to be used to implement provisions of chapter.

All fees collected by the department under this chapter must be used to implement its provisions.

SECTION 40-68-180. Other applicable license requirements still apply; when licensed, registered, or certified employee is considered employee of client company or of licensee; Employment Security Law unaffected.

This chapter does not exempt a client of a licensee or an assigned employee from any other license requirements imposed under local, state, or federal law. An employee who is licensed, registered, or certified under law and who is assigned to a client company is an employee of the client company for the purpose of that license, registration, or certification, but otherwise remains the employee of the licensee as provided in this chapter. Nothing in this chapter affects the South Carolina Employment Security Law (Sections 41-27-10 through 41-41-50).