Subscribe Now!
Free Daily News, Jobs, Webcasts, Discussions
Display and Distribute
Your Job Openings
COVID-19 News
COVID-19 Webcasts

Featured Jobs

Associate

Actuarial Benefits & Design Company
(Telecommute / VA)

ESOP Administrator -- Sign-on bonus!

Blue Ridge ESOP Associates
(Telecommute)

Blue Ridge ESOP Associates logo

Retirement Plan Administrator

Atlantic Pension Services Inc
(Telecommute / Kennett Square PA)

Atlantic Pension Services Inc logo

Retirement Plan Administrator

Carpenter Morse Group
(Telecommute / Longwood FL)

Carpenter Morse Group logo

Document Specialist

Definiti
(Telecommute / University Place WA / The Woodlands TX / Erie PA / Dallas TX / FL)

Definiti logo

Pensions Plan Administrator

Quantech Pensions LLC
(Anaheim CA)

401(k) Plan Administrator -- Sign-on bonus!

Blue Ridge ESOP Associates
(Telecommute)

Blue Ridge ESOP Associates logo

Client Manager

CMC Pension Professionals
(Telecommute / CA)

CMC Pension Professionals logo

Retirement Plan Consultant

Definiti
(Telecommute / Dallas TX / University Place WA / The Woodlands TX)

Definiti logo

Experienced DC Administrator/ Reviewer

MGKS
(Telecommute / Phoenix AZ)

MGKS logo

Free Daily News and Jobs

“BenefitsLink continues to be the most valuable resource we have at the firm.”

-- An attorney subscriber

Mobile App image LinkedIn icon
Twitter icon
Facebook icon

BenefitsLink > Q&A Columns >

Who's the Employer?

Answers are provided by S. Derrin Watson, JD, APM

Client Organizations and Recipients

(Posted May 27, 2002)

Question 186: What's the difference between a "Client Organization" (CO) under Rev. Proc. 2002-21 and a "recipient" under the leased employee rules of IRC 414(n)?

Answer: There is no difference other than a difference in perspective. But that difference is critical to understanding the relationship between the leased employee rules of IRC 414(n) and the PEO rules of Rev. Proc. 2002-21.

The leased employee rules affect the leased employee and the recipient organization (the organization receiving the individual's services). Those rules say that the recipient must treat the leased employee as its employee for many qualified plan purposes and welfare plan purposes. The leased employee rules do not affect the leasing organization at all. The focus is on the worker, and hence the organization for which the worker provides services is the “recipient” of those services.

By contrast, Rev. Proc. 2002-21 affects the PEO. It only indirectly affects worksite employees or Client Organizations. Because the focus of the Rev. Proc. is the PEO, the organization for which it is providing workers is the "Client Organization".

For more about the leased employee rules, see Chapter 4 of my book "Who's the Employer." For more about Rev. Proc. 2002-21, click here for a detailed analysis.


Important notice:

Answers are provided as general guidance on the subjects covered in the question and are not provided as legal advice to the questioner or to readers. Any legal issues should be reviewed by your legal counsel to apply the law to the particular facts of this and similar situations.

The law in this area changes frequently. Answers are believed to be correct as of the posting dates shown. The completeness or accuracy of a particular answer may be affected by changes in the law (statutes, regulations, rulings, court decisions, etc.) that occur after the date on which a particular Q&A is posted.


Copyright 1999-2017 S. Derrin Watson
Related links:

(restricted access)

(restricted access)

© 2021 BenefitsLink.com, Inc.