Written Testimony - Senate Bill 201, Greater Cleveland Partnership (November 19, 2020)

Summary

Written testimony on Senate Bill 201 (SB 201), Alternate Employer Organizations, from Sante Ghetti, Vice President, Government Advocacy of the Greater Cleveland Partnership, to the Ohio House Commerce and Labor Committee, dated November 19, 2020. The testimony states support for the bill and describes the Greater Cleveland Partnership and its small business division, the Council of Smaller Enterprises, as representing more than 12,000 business members in Northeast Ohio. It states that SB 201 would create Alternate Employer Organizations that function as a PEO but pay taxes under the Employer Identification Number of the client-employers. It thanks Senator Dolan for his leadership on SB 201.

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                                Senate Bill 201: Alternate Employer Organizations
                                                Written Testimony
                               Sante Ghetti, Vice President, Government Advocacy
                                          Greater Cleveland Partnership
                                                November 19, 2020


Chair Manning, Vice Chair Dean, Ranking Member Lepore-Hagan, and members of the Ohio House Commerce and
Labor Committee, thank you for the opportunity to provide written testimony regarding our support for this
initiative, Senate Bill 201 (SB 201). As you know, the Greater Cleveland Partnership (GCP) and its small business
division, the Council of Smaller Enterprises (COSE), represent the most comprehensive small, middle market, and
large business organization in the state with more than 12,000 business members in Northeast Ohio.

Professional Employer Organizations (PEOs) provide services to their employer clients – often small and middle
market businesses – by assisting with an employer's human resources services or employee benefits and payroll.
These entities allow job creators to spend more time and focus on running the day-to-day operations of a
successful enterprise.

SB 201 would create Alternate Employer Organizations (AEOs) and they would function as a PEO, but the AEO
would pay taxes under the federal Employer Identification Number (EIN) of its various client-employers – not the
EIN of the PEO. Under the proposal, AEOs are substantially similar to PEOs and the bill regulates AEOs in a very
comparable manner as PEOs. In addition, the bill contains an abundance of safeguards to ensure employer liability
attaches to AEOs.

Simply stated, this legislation will provide another option for clients to access programs that offer co-employment
programs that can be highly beneficial to small and mid-sized businesses across Ohio. An AEO offering in Ohio aims
to bring down barriers some may find in trying to access pools for human resources services provided through co-
employment programs. Service providers choosing to use the AEO format would gain no financial benefit, but an
AEO aspires to offer their clients security and transparency.

We are appreciative of Senator Dolan’s leadership and thank him for his work on SB 201. GCP believes the goal of
this legislation is worthy of the legislature’s support and we welcome the opportunity to continue working with you
to foster a strong business community in Ohio.


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