23-575. Violations; classification; civil penalties; rules

A. A person who offers to provide or actually provides professional employer services or uses the name professional employer organization, staff leasing, employee leasing or administrative employee or any other title representing a professional employer service without first registering with the secretary of state pursuant to section 23-563 is guilty of a class 1 misdemeanor.

B. A person who knowingly provides false or fraudulent information to the secretary of state under this article is guilty of a class 1 misdemeanor.

C. A person who is a controlling person of a professional employer organization and who collects payments from a client representing wages, taxes, benefit payments or insurance payments and fails to remit the funds to the appropriate government or private entity within a reasonable time is guilty of theft as provided in section 13-1802.

D. A person who is a controlling person of a client of a professional employer organization and who fraudulently or falsely procures or attempts to procure services or benefits from a registered professional employer organization without having monies that are adequate to compensate the professional employer organization is guilty of a class 4 felony.

E. If a person wilfully fails to comply with any requirement of this article, knowingly makes a material misrepresentation to the secretary of state, violates subsection A, B or C of this section or is guilty of an offense relating to the operation of a professional employer organization, the secretary of state:

1. Shall impose a civil penalty not to exceed one thousand dollars against the person for each violation. The secretary of state shall deposit, pursuant to sections 35-146 and 35-147, penalties collected pursuant to this paragraph in the state general fund.

2. May deny an application for registration.

3. May revoke, restrict or refuse to renew a registration.

4. May place a registrant on probation for a period of time determined by rules adopted by the secretary of state.

F. The secretary of state shall adopt rules for hearings and penalties for violations of this article or rules adopted under this article.