These CPEO Terms and Conditions (“CPEO Terms”) modify the services agreement (“Agreement”) entered into between You and TriNet, and as required pursuant to applicable rules and regulations governing service contracts with the Internal Revenue Service (“IRS”) certified professional employer organizations (“CPEOs”). The additional terms below are hereby incorporated into the Agreement. In the event of any conflict, this Addendum will control and any change in federal law will control if the change in law differs from the terms contained in these CPEO Terms. Any references to the Agreement or these CPEO Terms or words of similar import will refer to the Agreement as modified by these CPEO Terms. Capitalized terms used but not defined herein shall have the meanings set forth in Your executed services agreement. Without limiting any other obligation under Your executed services agreement, the parties agree as follows:
1. Legal Identity of the TriNet CPEO.
The reporting, withholding and tax payment services We provide under Your Agreement are being provided by TriNet HR III-B, Inc., a Delaware corporation with FEIN 65-0516080.
2. Section 3511 Contract.
Your Agreement is covered by Internal Revenue Code (“Code”) Section 3511. We will provide written notice to You if this Agreement ceases to be covered by Code Section 3511.
3. Responsibility for Performance of Services.
We will perform the wage payment services, tax reporting, withholding and payment services and employee benefit services in accordance with the Agreement, without regard to the receipt or adequacy of payment of fees for such services.
4. Responsibility for Recruiting, Firing and Hiring.
Subject to Your discretion and control over Your WSEs, including Your responsibility to recruit, hire and fire employees, we will perform recruiting, hiring and firing services in conjunction with You that are consistent with the Agreement.
We will maintain employee records in accordance with the Agreement and as required by the Code.
6. Required CPEO Notifications.
We will provide any written notices required under Code Regulations, Section 301.7705, or any related or successor guidance thereto. You will promptly respond to Our requests set forth in such written notices.
7. Information for Certain Tax Credits.
We will provide You with the information required to complete IRS forms necessary to claim any credits specified in IRC Section 3511(d)(2) and any other information We are required to make available to You under applicable law as part of the CPEO program.
8. Covered Employee Threshold.
You represent and warrant that 85% of the workers performing services for You at any worksite (as defined under the Code) where such individuals are assigned (including newly-hired or part-time employees within the meaning of Code Section 414(q)(5)) are covered by the Agreement. You will notify Us within ten (10) business days in the event that You fail to meet this 85% threshold at any such worksite. Within thirty (30) days following the end of any calendar quarter where we are notified that such 85% threshold is not satisfied, You may also be liable for federal employment taxes imposed on compensation paid to such WSEs.
9. Self-Employed Persons.
You agree and acknowledge that compensation that You pay to self-employed persons is not covered by Code Section 3511. You represent and warrant that any salaries and wages reported by you for us to pay to WSEs who may be considered self-employed for purposes of that WSE’s relationship to your business do not exceed reasonable compensation for the services performed by that WSE.
10. IRS Approval.
You agree and acknowledge that Our status as a Certified PEO under the Code is at all times subject to ongoing approval by the IRS and changes in applicable laws and regulations.
11. Payroll Tax Credits.
Our agreement to process any Tax Credits is conditioned on You first providing Us with all the information We request and require with respect to such Tax Credits, including without limitation timely, complete, and accurate taxpayer information and IRS tax forms (Your “Tax Credit Documentation”). You are responsible for notifying Us at least one (1) month before You claim any Tax Credits on Your entity income tax return or otherwise, and for providing all the information We request to process Your Tax Credits, including without limitation Your complete, accurate, and executed Tax Credit Documentation, by the deadlines We set. You agree that We can rely on the information You provide and Your Tax Credit Documentation to process Your Tax Credits and that We will have no obligation to process Your Tax Credits if you fail to provide the notices, information and Tax Credit Documentation to Us by the deadlines that We set. We cannot and do not guarantee that any of the Tax Credits You claim will be accepted by the IRS or any other government entity or agency. We are not responsible for any delay or failure to process any Tax Credits or for Your failure to receive any related payroll tax reduction.
As of the time You notify Us regarding any Tax Credits, provide Us any Tax Credit Documentation, and as of the time We process any Tax Credits for You, You represent and warrant that (i) You are eligible under all applicable laws to claim such Tax Credits and to receive the full amount of the payroll tax reductions claimed thereby, (ii) You have complied in full, and will continue to comply in full, with each of Your obligations and requirements set forth in this Agreement, including these CPEO Terms, and (ii) any and all information submitted to Us by You with respect to such Tax Credits, including without limitation all of Your Tax Credit Documentation, is upon submission, and will remain at all times thereafter, true, complete, and accurate in all respects.
Once the IRS accepts and processes Your Tax Credits, We will promptly provide You with the payroll tax refund or credit amount related to Your Tax Credits that the IRS pays or otherwise provides to Us or permits us to extend to You without liability, as applicable. However, We retain the right to control the process by which Your Tax Credits are submitted to the IRS and the manner in which You receive any refund or credit provided by the IRS. For the avoidance of doubt, We have no obligation whatsoever to provide You any Tax Credit refund or credit amount in excess of the amount accepted and processed by the IRS and for which the IRS has paid or otherwise provided to Us or permitted us to extend to You without liability. We may reject or return any Tax Credit Document(s) submitted to Us and refuse to process any Tax Credits if We have reason to believe that any of Your Tax Credit Documents contain an error or that You are otherwise ineligible for the claimed payroll tax credit. We may change at any time the procedures by which We process Tax Credits, any of the deadlines we set, any of the information and Tax Credit Documentation We require from You, and the manner by which We provide, refund or credit payroll tax credits to You once accepted and processed by the IRS.
You are responsible for ensuring that You are eligible to receive the full amount of the payroll Tax Credits that You claim and request that we process. In the event that Your Tax Credits are rejected (all or in part) for any reason, You will immediately reimburse Us in cash and indemnify Us, and our officers, employees and agents, for the full amount of any payment, refund, or other disbursement or credit that You receive from Us based on such Tax Credits, and You will also immediately reimburse and indemnify Us, and our officers, employees and agents, for any related penalties assessed against Us, or any of our officers, employees and agents, and for any damages We, or they, otherwise incur, including reasonable attorney and advisor fees, as a result of such rejection.
All the duties, responsibilities, representations, warranties, and obligations in this section not explicitly allocated to Us remain Your duties, responsibilities, representations, warranties, and obligations, and You agree that You will indemnify Us, and our officers, employees and agents, in accordance with Your Agreement in the event that You breach any of Your duties, responsibilities, representations, warranties, and obligations in these CPEO Terms.
12. Purpose of Schedule.
The provisions set forth herein are intended solely for the purpose of complying with the requirements of the Small Business Efficiency Act (SBEA). Except for the express purposes set forth in the SBEA, nothing set forth herein, or in the Agreement, shall create any inference with respect to the determination of who is an employee or employer for any purpose.