Client Service Agreement
CLIENT SERVICE AGREEMENT
Professional Employer Services Agreement (“Agreement”) entered into by and between (“Client”) and Integrity HR Management, LLC (“IHRM”), 908 S. Main Street, Boerne, TX 78006 effective as of March 5, 2021 (“Effective Date”).
1. Employment Arrangement:
This Agreement establishes a co-employer employment arrangement between IHRM and Client where IHRM will assume certain of the Client’s common law employer responsibilities as stated in this Agreement and as may be required by law with respect to work-site employees assigned to Client’s work-site (“Employees”) for the job functions listed in Exhibit A. Client warrants that information supplied to IHRM on Exhibit A is accurate as supplied and acknowledges that IHRM is relying on the accuracy of the information. Client agrees on an ongoing basis to amend Exhibit A to reflect each change in pay rate, addition or deletion of Employees, or any change in their workers’ compensation code within five (5) days of the effective date of such change or addition. Client shall retain those responsibilities pertaining to the operation of the core elements of Client’s business; including direct supervision of the day to day activities performed by Employees in furtherance of Client’s business and direct the hiring and firing of employees. However, IHRM shall retain responsibility for the overall direction and control of such Employees as to IHRM’s employment relationship with Employees, maintain Employee records, and a right to resolve Employee disputes not subject to a collective bargaining agreement. Client shall also retain sufficient direction and control over the Employees as is necessary to conduct Client’s business, discharge any of Client’s fiduciary responsibilities, or comply with any legal requirements applicable to Client including compliance with all laws and regulations affecting assignment of and ownership of Client’s intellectual property rights (including, but not limited to, inventions, whether patentable or not, and resulting patents or copyrights). Client and IHRM mutually acknowledge and agree that the intent of this Agreement is to materially change the nature of the employment relationship at the Client’s work-site(s) to co-employer employment arrangement where IHRM shall be the “administrative employer” and Client shall be the “work- site employer” with respect to the Employees.
2. Professional Employer Services:
A. IHRM will administer and/or provide the following professional employer services as Client’s co-employer: paying payroll/wages, payroll processing services; human resource compliance assistance; assignment of employees to Client’s work-site(s); administering any non-statutory and non-compulsory employee benefits as selected by Client; administering required federal, state and local employee payments or withholding's from wages, as well as required employer remittances of employment taxes to federal, state and local taxing authorities; and, such other services as may be mutually agreed upon. The Employees will be paid from IHRM payroll and accounts; and, any benefits to be provided and all taxes will be paid under IHRM’s federal, state and local tax identification numbers during the term of this Agreement except as otherwise required by applicable laws or regulations.
B. IHRM shall obtain workers’ compensation insurance for Employees and shall keep such coverage in force and effect at all times for all of the Employees. Upon written request, IHRM shall furnish a certificate of insurance to the Client showing workers’ compensation coverage in effect for all Employees.
C. IHRM will be the W-2 employer for Employees for purposes of the withholding and payment of all employment taxes in connection with the wages IHRM pays to the Employees under this Agreement. IHRM shall be solely responsible for making all applicable payroll withholding's of Employees paid under the terms of this Agreement and remittance of same to the appropriate taxing authorities, including applicable federal, state, and local income, social security, disability and unemployment taxes. Client shall remain solely liable for making all filings and reports, including tax returns, applicable to the non-employment aspects of its business operations.
D. The providing of services under the terms of this Agreement by IHRM is expressly conditioned upon Client’s truthful and accurate disclosure of any and all information requested by IHRM, both before and after the execution of this Agreement, including but not limited to the request for proposal submitted by Client. Client’s failure to provide truthful and accurate information will constitute a material breach and shall be grounds for immediate termination of this Agreement at the option of IHRM.
E. IHRM shall: (1) maintain complete records of all wages and benefits paid by IHRM and personnel files relating to the Employees; (2) retain control of such records at a location determined solely by IHRM; and (3) make such records available as required by applicable federal, state or local laws, regulations, rules or ordinances. With respect to all Employees, Client retains the right to copy or review all records maintained by IHRM.
F. IHRM and Client may agree in writing to the appointment of one or more of the Employees to act as a liaison between the two parties. If IHRM agrees to the appointment of the liaison, such liaison’s scope of employment and authority is strictly limited. Any of the liaison’s actions which are taken in violation of IHRM’s direction, or in violation of any laws, regulations, rules or ordinances or which result in liability will be outside the scope of the liaison’s responsibility as an IHRM assigned employee, and, in such an event the liaison will be acting solely as the agent of Client. Any individual appointed as a liaison shall cooperate with IHRM and Client on coordinating operations and administrative matters relating to services provided by IHRM under the terms of this Agreement.
3. Term of Agreement:
This Agreement shall commence on the Effective Date shown below and may be terminated after the first six (6) months and shall remain in force for a minimum term of six (6) months and then shall remain in effect on a continuous basis until terminated by either party upon thirty (30) days prior written notice to the other party by certified mail or as otherwise provided herein.
A. In consideration of IHRM’s performance under the terms of this Agreement, Client shall pay IHRM fees (“Fees”) in accordance with the following:
Fee Schedule: Code: PER PAYCYCE
Rate: % GROSS WAGES
*RATE BREAKDOWN PROVIDED ON QUOTE SHEET
B. Fees shall not be modified during the first six (6) months following the Effective Date; provided, however, IHRM shall have the right, at any time, to adjust the Fees based on changes in mandated payroll costs over which IHRM has no control (such as FICA, Social Security, Federal Unemployment Taxes, State Unemployment Insurance, etc.)
C. A one-time charge of $25.00 per employee will be invoiced to client upon completion of the initial enrollment of such employee. Client shall also be invoiced for any drug test in accordance with Section 14 of this Agreement. Further, IHRM shall invoice Client for any background reports requested by Client, including, but not limited to, motor vehicle registration report, credit report, or criminal background check.
D. Any amounts not paid by Client to IHRM when due are subject to a late penalty of 5% (or the maximum amount permitted by law if less than 5%) of the amount due per month or fraction thereof that remains outstanding. No amounts advanced by IHRM which are not paid by Client on a timely basis shall be deemed a loan to Client; all past due amounts are delinquent obligations. Client agrees to collect, verify, and transmit to IHRM’s designated administrative office, no less than three (3) business days before each payroll date, any information required to determine correctly and accurately the amount of the payment due in accordance with IHRM’s rules and procedures.
E. Client shall pay the Fees for services rendered under this Agreement with: (check one)
on or before the actual payday for the Employees. The name, address, bank number and account number of Client’s bank account is required to establish ACH debit. All corporate checks returned Non-Sufficient Funds (NSF) must be replaced by Client with a cashier’s check immediately upon notification from IHRM. Client will also be charged $250 per returned NSF item. A Client who has one corporate check returned NSF will immediately be placed on a cashier’s check basis only, for a period of no less than six (6) months from the date of notification to IHRM from bank on the NSF item. Payment in the form of cashier’s check shall continue until IHRM approves in writing an alternate form of payment.
F. IHRM may modify its Fees by giving Client written notice of any modification. Except as stated below, Client may terminate this Agreement during the thirty (30) day period following the notice of modification of Fees by giving IHRM written notice of cancellation if such modification results in increased Fees being charged to Client. This termination shall be effective fifteen (15) days after Client gives the termination notice. Prior to the effective date of such termination, Client shall pay in full all accrued Fees due and owing to IHRM, but Client shall have no responsibility for any increased Fees associated with IHRM’s modification of the Fees. Except as provided in Paragraph 13, Client shall not have the right to terminate this Agreement due to any increase in the Fees resulting from an increase in mandated payroll costs over which IHRM has no control (such as FICA, Social Security, Federal Unemployment Taxes, State Unemployment Insurance, etc.).
G. At IHRM’s option, Client may be required to provide one of the following types of security in support of Client’s obligations under this Agreement: unconditional personal guaranty from the owner(s); bank line of credit; or letter of credit.
H. Client will notify IHRM of any changes, errors or inaccuracies in any payroll, payroll report, or Exhibit A within five (5) days of such error or change.
5. Representations and Warranties:
A. Client and IHRM mutually warrant to each other that neither will violate the Federal Fair Labor Standards Act or in any manner cause or seek to cause a violation of, any applicable federal, state or local law, ordinance, or regulation pertaining to the terms, conditions, and services of this Agreement. Client further warrants that it shall not make any payment of any kind to any Employee covered by the terms of this Agreement without the knowledge and consent of IHRM, except: (1) business-related expense reimbursements; or (2) profit sharing or pension plan distributions made pursuant to the terms of a qualified or non-qualified plan in existence prior to the execution of this Agreement. Any payment made in violation of this Paragraph 5.A. shall constitute a material breach and shall, at the election of IHRM, be grounds for immediate termination of this Agreement.
B. Except as otherwise disclosed to IHRM in writing, Client warrants that: (1) none of the Employees are represented by a union; (2) there are no pending, actual, anticipated employee charges, lawsuits or investigations, pending governmental investigations, actual or anticipated administrative investigations, enforcement's or lawsuits relating to employees relating to employees, the working conditions of the employees, the products or services produced or provided by employees or any other matters affecting the performance of IHRM under this Agreement; and (3) all hazardous materials, if any, on Client’s premises are maintained, stored and disposed of in accordance with applicable laws, regulations, rules or ordinances.
C. Client warrants and represents that entering into this Agreement does not conflict or violate any other agreements Client may have with a third party.
D. In the capacity of a “work-site employee” Client controls the work-site(s) and the scheduling of the employees access to the Client’s work-site(s). Client therefore agrees to obtain and accurately report to IHRM: (1) the total number of hours worked by each Employee, with the hours verified, as well as the exempt and non-exempt status of each covered Employee, in accordance with the requirements of the Fair Labor Standards Act and/or any other applicable federal, state or local law, regulation, rule or ordinance; (2) the number of vacation days, sick days and other hours and the reason, per pay period that an Employee is absent from work; and (3) such other information relating to the Employees as is necessary for IHRM to provide the services contemplated under this Agreement. Client assumes full responsibility for the accuracy and timeliness of all reports made to IHRM.
E. If pursuant to local, state or federal law or regulations, Client or an Employee is required to possess or maintain a special license or permit to conduct Client’s business, or be supervised by an individual or entity who is required to possess or maintain a special license or permit, Client will be responsible for verifying and securing such licensing or permit and providing such required supervision. Client will, upon request, provide IHRM with evidence of compliance with all licenses and permit requirements.
F. Client shall bear full responsibility for any losses or claims that arise as a result of any Employee’s negligence, theft, embezzlement, or other unlawful or willful acts committed by Employees. Client shall bear full responsibility for the implementation and enforcement of any and all work-site(s) procedures that exist for the purpose of preventing the misappropriation, theft or embezzlement of Client’s personal, real, or intellectual property. Client shall bear full responsibility for any losses, claims, penalties, or fines imposed on or assessed to Client by a governmental agency.
G. Client agrees to provide IHRM with a copy of any notice, complaint or charge of a government agency and/or legal action concerning (i) Client's workplace; (ii) Client's compliance with any laws, rules, regulations or ordinances relating to the workplace; or, (iii) any Employee within two (2) business days of its becoming aware of such notice, complaint, charge or legal action.
H. Client agrees to notify IHRM in advance if it has executed a collective bargaining agreement, is in the process of negotiating a collective bargaining agreement, experiencing organizing activities, or has any employees represented by a union.
I. Client acknowledges that any and all employee benefit plans maintained by IHRM may be amended, modified or terminated at any time at the sole discretion of IHRM. Such modifications include, but are not limited to, increases or decreases of participant co-pays, deductibles, out of pocket maximums, covered services, and the like and such modifications shall not be restricted as a result of any provision(s) contained in a collective bargaining or other agreement entered into by Client.
J. Client agrees to cooperate fully with IHRM in any investigation including, but not limited to, the defense of any employment-related claim, involving Employees whether such investigation or claim is initiated by Employee, a government agency or by IHRM.
K. Client warrants and represents that during the term of this Agreement all of its employees will be Employees and will be included in the services provided by IHRM to Client pursuant to this Agreement, including receiving wages and coverage under insurance and benefit plans.
L. Client warrants and represents to IHRM that, prior to entering into this Agreement, Client has informed IHRM of all compensation, pension and/or benefit plans that Client may currently provide, or has heretofore provided, for any owners, partners, shareholders, directors, officers, employees or agents of Client. If Client currently maintains or has maintained any such plans, Client acknowledges that IHRM has advised Client to seek advice from a qualified professional regarding the effect of this Agreement on such plans.
M. Client warrants and represents to IHRM that prior to entering into the Agreement, it has not engaged to the best of its knowledge in any violations of federal, state or local laws or regulations regarding wage and hour, unfair labor practices or discrimination and that Client is current on the payment of all wages, payroll taxes, and workers' compensation assessments and penalties, if applicable.
N. Client acknowledges that at the time of termination of this Agreement, IHRM will send Employees employment termination notices terminating IHRM's relationship with Employees which will not affect the employment relationship Client has with Employees.
O. Upon termination of this Agreement, Client will retain sole responsibility and liability for all accumulated unpaid sick leave, paid time off, vacation or similar liabilities for Employees.
P. Client warrants it will not request Employees to perform any services outside that person's workers' compensation code or employee's ability or training.
Q. Client agrees it will not without the prior express written consent of IHRM make any form of press release or announcement to the general public regarding this Agreement, publicizing IHRM or using its trademarks, and/or service marks, or otherwise disclosing to the general public in a public forum that the parties have entered this Agreement or have a relationship.
6. Workers’ Compensation:
A. Responsibilities of IHRM: All Employees shall be covered by IHRM’s workers’ compensation insurance in compliance with applicable laws and regulations. IHRM’s workers’ compensation insurance will not cover any person(s) performing services for Client who are not covered by this Agreement and not on IHRM’s payroll. Client understands, agrees, and acknowledges that no person shall become employed by IHRM, be covered by IHRM’s workers’ compensation insurance or any other benefit or term or condition of employment, or be issued a payroll check unless that person has, prior to commencing such employment, completed IHRM’s employment applications, W-4 withholding form and form I-9, all of which must be delivered to IHRM before the person commences employment. IHRM shall not be considered an employer for any person until that individual completes these forms and Client is notified that the person has been hired by IHRM. In addition, IHRM shall not be considered to be an employer of any person, for whom payroll information is not supplied during any payroll period, except as may be required by applicable law. Client understands, acknowledges and agrees that IHRM’s workers’ compensation insurance coverage does not extend to cover the employees of subcontractors, contract laborers or any other service provider hired by Client for any reason.
B. Responsibilities of Client: Client agrees to require any independent contractor to provide evidence of workers’ compensation coverage before the independent contractor commences work at the Client’s work-site(s). Client acknowledges that IHRM or IHRM’s workers’ compensation carrier will periodically audit the covered work-site employee classification lists for each Client work-site(s) location to ensure that Employees are properly classified. In the event that any such audit results in a finding that covered work-site employees assigned to Client’s work-site(s) have been misclassified and such misclassification resulted from information supplied to IHRM by Client, Client will be liable to IHRM for any charges associated with such misclassification, including, but not limited to, penalties and premium adjustments. Accurate classifications are solely the responsibility of Client. IHRM and IHRM’s workers’ compensation carrier shall have the right to inspect Client’s workplace, including but not limited to any job sites at which Employees work.
C. Employee Injuries and Reinstatement: If an Employee is injured at any Client work-site(s), Client will notify IHRM within 24 hours of having knowledge, cooperate in conducting any investigation following the accident and, if required due to medical restrictions, permit the employee to work in a modified-duty capacity as requested or recommended by IHRM or one of its authorized representatives until such time as the employee is no longer medically restricted from resuming duties performed prior to the accident. Further, Client agrees to make reasonable accommodation(s), which may be required by the Americans With Disabilities Act or any similar federal or state requirements.
7. Employee Benefits
A. Client shall remain liable for all Internal Revenue Code Section 4980B (COBRA) participants on any Client’s group health plan secured by Client independently of IHRM.
During the term of this Agreement, Client shall obtain and maintain the following types of insurance coverage and minimum limits and name IHRM as an additional insured under such policies and allowing IHRM not less than thirty (30) days advance notice of cancellation or non- renewal of, or material changes in such coverage’s. All insurance coverage required under this section shall be exclusive of any umbrella coverage. Such coverage shall be provided at the Client's sole cost and expense and shall be provided by an admitted or licensed excess and surplus lines insurance company and rated by A M Best Company at A- or better.
A. General Liability. Commercial General Liability coverage in standard form on an occurrence basis covering Client's operations with minimum limits of:
(i) $2,000,000.00 General Aggregate (ii) $1,000,000.00 Products/Completed Operations Aggregate (iii)$1,000,000.00 Personal and Advertising Injury (iv) $1,000,000.00 Each Occurrence. Additional coverage may be required for special operations.
B. Automobile Liability. Comprehensive automobile liability insurance covering all owned, hired, and non-owned Client vehicles, with minimum limits of One Million and No/100 Dollars ($1,000,000.00) combined single limit per occurrence for bodily injury and property damage liability. Client warrants that all persons operating Client's vehicles are duly licensed and covered under the Client's automobile liability insurance policy without exception. Client agrees to furnish to IHRM a list of drivers upon request. The policy shall be endorsed to include, at no additional cost to IHRM, Employees who shall be operating motor vehicles for Client.
C. Workers’ Compensation. Workers' compensation insurance coverage on any of its employees that are not covered under this Agreement and any Client subcontractor employees. Additionally, Client shall require its subcontractors to maintain workers’ compensation insurance coverage. Client shall keep current certificates of insurance documenting such coverage on file with IHRM. Client agrees to indemnify and hold harmless IHRM for any costs or expenses incurred by IHRM as a result of Client’s breach of this provision or the failure of any subcontractor of Client to maintain workers’ compensation insurance coverage.
D. Professional Liability. Professional liability insurance (e.g., errors and omissions, malpractice) may be required for specified Clients. Professional liability insurance will be required for some Clients including medical, legal, insurance and the like. All such policies shall have a minimum of $1,000,000.00 per occurrence and aggregate.
E. Policy Requirements. All Client insurance policies required herein shall provide for thirty (30) days written notice to IHRM prior to cancellation or non-renewal of the coverage All such insurance policies shall be endorsed to waive any and all rights of subrogation against IHRM and name IHRM as an additional insured, both at no additional cost or expense to IHRM. Each of the policies shall be primary insurance and not excess over or contributory with any other valid, existing and applicable insurance carried by IHRM.
F. Certificates of Insurance. Client shall submit certificates of insurance to IHRM signed by authorized representatives of insurance companies evidencing all insurance required pursuant to this Section within thirty (30) days of execution of this Agreement and at any renewal or replacement of such policies.
G. Other Insurance: Should Client have any other insurance coverages not required by this Agreement that would cover a loss that may occur under this Agreement, the insurance coverage shall supersede either parties obligation to pay.
Neither party will exercise any claim it has against the other party for subrogation which may arise for any and all loss of or damage to any of its property, or for bodily injury, if the loss, damage, or bodily injury is covered by insurance, and only to the extent that the loss or damage is recovered under the policies of insurance which are required to be in effect by this Agreement.
10. Obligations of the Parties:
IHRM shall have responsibilities pertaining to the following areas:
1. Compliance with all rules and regulations governing the reporting and payment of federal and state payroll taxes on wages paid under this Agreement, including, but not limited to: (a) federal income tax withholding provisions of the Internal Revenue Code; (b) state and/or local income tax withholding provisions, if applicable; (c) Federal Insurance Contributions Act (FICA); (d) Federal and State Unemployment Tax Acts (FUTA and SUTA); (e) applicable state disability tax provisions; and (f) IHRM’s responsibilities under the Fair Labor Standards Act and similar state legislation;
2. Compliance with applicable workers’ compensation laws and regulations for covered employees, such as: (a) procuring workers’ compensation insurance; (b) completing and filing all required reports; and (c) administering, managing, and otherwise processing claims and related procedures;
3. Compliance with Internal Revenue Code Section 4980B (COBRA) with respect to covered employees who participate in IHRM’s group coverage, payroll and to whom COBRA provisions apply during the term of or at the time of termination of this Agreement;
4. Monitoring changes in applicable laws and regulations which affect the employer/employee relationship and making or recommending changes to existing employment-related policies and practices to help ensure compliance, including, but not limited to: staffing, interviewing, testing, candidate selection, orientation, training, evaluating, replacing, disciplining and terminating employees;
5. Monitoring and providing loss control services relating to workers’ compensation and employment/human resources services; and
6. Administration, procurement and payment of all other employee benefits covered by this Agreement.
7. Provide notification to work-site employees of the inception and termination of this Agreement.
IHRM will only provide the services listed above under the terms of this Agreement and no other services will be provided or implied except as otherwise provided in writing between the two parties.
Client shall have responsibilities pertaining to the following areas:
1. The service provided, or product produced by Client;
2. The direction and control over Employees necessary to conduct Client’s business;
3. The Occupational Safety and Health ACT (OSHA) and related and similar federal, state or local laws, regulations, rules and ordinances pertaining to work-site(s) safety and health, including the maintenance of all records and logs; Environmental Protection Agency (“EPA”) regulations, child labor laws, and the Worker Adjustment and Retraining Notification Act (“WARN”), ;
4. Government contracting requirements as regulated by any and all federal, state, county or local laws, regulations, rules or ordinances;
5. Compliance with all federal, state and local employment laws, including, but not limited to, the Fair Labor Standards Act; the Family Medical Leave Act of 1993, the Americans With Disabilities Act, the Age Discrimination In Employment Act, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, Equal Pay Act, Executive Order 11246, Uniformed Services Employment and Reemployment Rights Act, and any other federal, state or local laws, regulations, or ordinances which govern the employer- employee relationship, as may be amended from time to time, including any conduct, acts, or decisions occurring within the direction or control of Client as a “work-site employer” at Client’s work-site(s). Client shall be responsible for all costs associated with physical compliance or facilities modification required to Client’s work-site(s) or for any other needed accommodation(s) to be in compliance with the Americans With Disabilities Act or any similar federal, state or local laws, regulations, rules or ordinances;
6. Professional licensing and other licensing of Client or Employees;
7. Fidelity bonding requirements;
8. Recruitment, interviewing, recommending employment, job training, work evaluation and recommending any discipline deemed necessary of any Employee. Client shall have the right to reject any assigned employee or to have any employee reassigned; provided, however, Client agrees that in making such decisions it will at all times comply with applicable laws, regulations, rules or ordinances, and this obligation will survive termination of this Agreement;
9. Any strategic, operational, errors and omissions or other business-related decisions with regard to Client's business, which shall be the exclusive responsibility of Client and IHRM will have no responsibility nor liability for any actions or inactions taken by Client. When implementing such decisions, whether or not the actions are implemented by Employees, Client shall be acting solely on its own volition and responsibility, including but not limited to Client’s negotiation with any necessary party under an applicable collective bargaining agreement to which Client is a party;
10. As set forth in Internal Revenue Code Section 414(m), (n), and (o) (ERISA), Client acknowledges its obligation to amend, integrate and coordinate the terms of any existing Client-sponsored benefits plans so that IHRM’s plans remain in compliance with all applicable laws.
11. Compliance with National Labor Relations Act and liability for all obligations, including organizing efforts and process expenses related to Client’s collective bargaining agreement and any benefits arising from such agreement;
12. The operation of Client’s business, equipment or property, including motor vehicles;
13. The payment, through IHRM, of vacations, commissions, bonuses, paid leaves of absence, and severance payments to Employees, if any;
14. The payment of any non-qualified deferred compensation or equity based compensation of any type, including, but not limited to, stock options, restricted stock and phantom stock, the number and value of options granted, whether such payment is actual or imputed for taxing purposes, and compliance with all applicable rules and regulations governing such compensation including, but not limited to, valuation, payment or reporting of such compensation;
15. development and implementation of policies and practices to establish and maintain Client's intellectual property rights including but not limited to patents, trademarks, copyrights, trade secrets and confidential information and to prevent any infringement or unauthorized use of Client's intellectual property rights by any third party or Employees;
16. compliance with administrative procedures established by IHRM with respect to IHRM sponsored employee benefit plans;
17. compliance with all applicable requirements of HIPAA and ERISA, if any, with respect to Client and/or its employees, including but not limited to, Client's business operations, Client-sponsored employee benefit plans and Client's workplace; and
18. compliance with Fair Credit Reporting Act ("FCRA") and any state equivalent in the event Client processes its own employee/candidate background checks.
11. Employee Safety:
Client shall be solely responsible for complying with all health and safety laws, regulations, ordinances, rules, including, but not limited to, all federal, state and local Occupational Safety and Health Acts, laws and regulations. Client agrees to comply with and cooperate with the implementation of any reasonable safety rules, programs or devices which may be required by IHRM or IHRM’s loss control services provider or workers’ compensation carrier, and shall report all employee accidents and injuries to IHRM within 24 hours of having notice. Client shall provide or ensure use of all personal protective equipment, as required by federal, state or local law, regulation, ordinances, directives, or rules deemed necessary by IHRM’s loss control services provider and/or workers’ compensation carrier. Client agrees that IHRM and its loss control services provider and/or workers’ compensation and liability insurance carriers have the right to inspect the Client’s work-site(s) to ensure that the employees assigned to Client’s work- site(s) are not exposed to an unsafe workplace. IHRM’s right to inspect shall be done in a non- disruptive manner. Upon notification by IHRM of an unsafe working condition or violation of any law, Client shall take the necessary steps to rectify the unsafe condition or correct the violation.
A. Client agrees to indemnify, hold harmless, protect and defend IHRM, their respective shareholders, non-assigned employees, attorneys, officers, directors, agents and representatives (all of which are collectively referred to as “IHRM Indemnified Parties”), except to the extent any of these entities are providing insurance coverage that may be applicable, from and against any and all liability, expense (including cost of investigation, court costs and reasonable attorneys’ fees) and claims for damage of any nature whatsoever whether known or unknown and whether direct or indirect, as though expressly set forth and described herein which IHRM Indemnified Parties may incur, suffer, become liable for or which may be asserted or claimed against IHRM Indemnified Parties with respect to this Agreement, including but not limited to:
1. relating to any claims, incidents or causes of action that occurred prior to the Effective Date of this Agreement regardless of whether the claims, incidents or causes of action were asserted prior to, on or after the Effective Date of this Agreement;
2. arising out of the breach of the terms of this Agreement by Client, its agents, representatives or employees, including Employees; or
3. arising out of or relating to this Agreement to the extent of the policy limits which the Client is insured and coverage is provided by other insurance policies; or
4. as a result of the violation or noncompliance with any applicable local, state and/or federal law, regulation, rule or ordinance; or
5. any and all liabilities or consequences arising out of Client’s business, product or preparation of, or provision of service; or
6. relating to any claims, incidents or causes of action whether based on contract, tort or statutory violation arising from actions of Client or Employees to non-employees of IHRM, Client’s employees, including Employees, and to any other person or entity; or
7. resulting from any claimed or actual actions, conduct, tortious, criminal or dishonest activity of Client, its agents and its employees, including work-site Employees and any other person or entity prior to or during the term of this Agreement; or
8. arising from operation by Client, Client's employees or Employees of any form or type of motor vehicle and any violation of Department of Transportation, Interstate Commerce Commission and/or Motor Carrier Act;
9. arising from employee or Employees unionization and/or provision of benefits to any Employee covered by a collective bargaining agreement, any organizing activity or claims based on NLRA;
10. arising from any Client employment agreement or offer letter Client has with Employees, or any policy or plan Client has regarding paid time off or other payment plans such as vacation, sick leave, severance, bonus or commissions and nothing in this provision creates any such policy or plan;
11. arising from any infringement, alleged infringement, unauthorized use or alleged unauthorized use of any intellectual property rights, including but not limited to patents, trademarks, copyrights, trade secrets and confidential information, by Employees or Client and by any product or services provided by Client; or
12. as a result of the failure of Client to properly maintain and operate any separate employee benefit plan(s). Client’s duty to defend, indemnify and hold harmless includes the duty to pay any award imposed by an administrative agency, or any judgment or settlement reached in any court action or arbitration including any and all expenses, including court costs and attorney’s fees.
CLIENT’S DUTY TO DEFEND, INDEMNIFY AND HOLD HARMLESS DOES NOT APPLY TO A MATERIAL BREACH OF THE TERMS OF THIS AGREEMENT BY, OR ANY NEGLIGENT OR TORTIOUS ACTS OF, IHRM AS STATED IN SECTION (B).
1. any and all claims, demands, damages, injuries, deaths, actions, costs and expenses (including attorney’s fees and expenses at all levels of legal and regulatory proceedings) arising out of or related to a material breach of the terms of this Agreement by, or any negligent or tortious acts of, any person who is not assigned to work as an Employee of Client but who is an authorized representative or employee of IHRM and not part of this co-employer relationship;
2. damages, arising out of the negligent or willful failure of any person who is not assigned to work as an Employee of Client but who is an authorized representative or employee of IHRM and not part of this co-employer relationship to:
A. comply with applicable workers’ compensation, withholding tax, FUTA, or SUTA, laws, rules and regulations; or
B. where any action is taken by Client in compliance with a written corporate IHRM policy, procedure, or direction which results in an infraction or violation of any applicable local, state and/or federal law, regulation, rule or ordinance. Notwithstanding anything to the contrary, IHRM shall have no hold harmless or indemnification responsibility or liability for acts committed by Client employees whom are not assigned to work as Employees of Client and are not covered under this co-employment relationship.
C. These indemnifications are not limited to claims, expenses, or liabilities where one party is solely liable but also apply to joint and several or concurrent liability or when one party pays more than its pro rata share the other party will indemnify it for that excess amount.
D. All indemnifications shall survive the termination of this Agreement.
E. Notwithstanding anything to the contrary contained in this Agreement, in no event shall either party be responsible for special, indirect, consequential, punitive or other such damages which the other may incur as a result of or arising out of this Agreement, even if told about the possibility of these types of damages. This does not however limit IHRM’s right to seek indemnification for special, indirect, consequential, punitive or other such damages asserted by a third party or work-site Employees in a claim against IHRM.
A. At IHRM’s option, this Agreement will immediately terminate upon notice to Client and Client shall indemnify and hold harmless IHRM from any consequences or liabilities arising from such termination if any one of the following conditions occurs:
1. Client fails to make payments in compliance with Paragraph 4.D of this Agreement; or
2. Client fails to comply with the provisions of Paragraphs 11 and 12 of this Agreement; or
3. Client invokes or exercises its rights under 3(b)(1) of Worker Adjustment Retraining Notification Act (“WARN”) and the Department of Labor regulations applicable to WARN; or
4. Client fails to comply with WARN. Client shall also indemnify IHRM for any severance payments or other obligations which may arise as a result of the provisions of WARN; or
5. Client fails to maintain insurance in effect as required in Paragraph 8 of this Agreement; or
6. A voluntary or involuntary petition for reorganization or bankruptcy is filed by against Client; or if IHRM in its sole discretion determines that a material adverse financial change has occurred in Client’s condition, or Client is unable to pay its debts as they become due in the ordinary course of business; or
7. Client closes any work-site(s) facility or operation without giving ninety (90) days prior written notice to IHRM; or
8. Failure of Client to comply with any directive of IHRM, when such directive is promulgated or made necessary by: (i) a federal, state or local governmental law or regulation;
(ii) an insurance carrier providing coverage to IHRM and/or Employees; or (iii) specific circumstances which may affect the safety or violate the legal rights of IHRM or Employees; or
9. commission or omission of any act that usurps any material right or obligation of IHRM as a co-employer of Employees including failing to cooperate with IHRM in its fulfilling its obligations here-under or violation by Client of any material provision of this Agreement.
B. Upon termination of this Agreement for any reason, IHRM shall withdraw from the Professional Employer Services arrangement with Client and the Employees will be terminated and transferred to Client’s payroll as of the effective date of termination of the Agreement. Client shall, from that point forward, be the sole and exclusive employer and shall be solely and exclusively responsible for the payment of all wages and employee benefits and for compliance with all local, state and federal laws, regulations, rules or ordinances regulating the employer/employee relationship or otherwise related to the employer/employee relationship. Also included in Client’s sole and exclusive responsibility are, without limitation, the following: payroll, payroll-related taxes, workers’ compensation and other employee benefits such as health insurance.
C. Upon termination of this agreement, the client shall cease the use of all forms, documents, agreements, handbooks or manuals created for or provided to the client by IHRM.
D. Upon termination of this Agreement, the provision for health care continuation coverage shall be governed by Internal Revenue Code Section 4980B (COBRA) and Client shall be solely responsible for replacing any health care coverage for those employees covered by this
Agreement in a manner that will avoid the generation of a “qualifying event” under Internal Revenue Code Section 4980B (COBRA).
E. Termination of the Agreement shall not relieve Client of Client’s obligations for any unpaid wages and benefit costs payable under the terms of the Agreement to the Employees, through and including the effective date of termination of the Agreement.
Client specifically agrees to indemnify and hold IHRM and the IHRM Indemnified Parties harmless from:
(1) any liability whatsoever to any employee formerly assigned by IHRM to Client’s worksite(s) prior to the effective date of termination of this Agreement for any wages or other benefits to which such employee may be entitled; and
(2) any liability to third parties arising out of IHRM duties and obligations under the terms of this Agreement for which IHRM is not otherwise liable or obligated under the terms of this Agreement.
14. Drug and Alcohol Policy:
A. IHRM shall provide to Clients and Employees a copy of IHRM’s Drug and Alcohol Policy. IHRM supports a drug free workplace and will require all employees to be subjected to Drug and/or Alcohol Testing if reasonable cause and/or suspicion arises. In addition, IHRM requires a Post-Accident Drug Test for a work related injury as a result of an accident or incident in the workplace, regardless of whether the individual employee declines treatment. IHRM’s policy is only a floor or a minimum policy. Client may implement and maintain any policy Client chooses which exceeds the policies of IHRM. IHRM insists that Client produce, implement and maintain a Drug & Alcohol Policy sufficient to comply with any contractual obligations and or regulatory requirements such as the Department of Transportation as they apply to any employee holding and using a Commercial Drivers License (CDL).
B. Client agrees it shall comply and concur with IHRM’s Post-Accident and Reasonable Suspicion Drug Testing Policy. Client agrees that it shall reimburse IHRM for any drug test of an Employee paid for by IHRM. Such payment shall be due immediately from Client upon receipt of an invoice from IHRM. Further, Client agrees it shall remain in compliance with any contractual obligations as required by any agreement entered into by Client with any company other than IHRM. Client agrees it shall comply with any regulations or guidelines of the U.S. and TX Departments of Transportation by producing, implementing and maintaining a Drug & Alcohol Policy sufficient to cover the needs of pre-employment, random, reasonable suspicion and post-accident drug testing as outlined in such contractual agreements or regulatory guidelines.
This Agreement is not assignable without the prior written consent of both parties, and Client shall not assign the services of an Employee to anyone without the prior written consent of IHRM, except as needed in the normal course of Client’s business.
16. Third Party Rights:
This Agreement exists for the mutual benefit of and to govern the relationship between Client and IHRM and it does not create any rights of any kind in any third party. This Agreement shall in no way be interpreted as creating an employment contract express or implied between IHRM, the Client or any Employee assigned to the Client’s work-site.
17. Entire Agreement and Waiver:
This Agreement constitutes the entire agreement between the parties with regard to this subject matter and supersedes any and all agreements, whether oral or written, between the parties with respect to its subject matter. Failure by either party at any time to require performance by the other party or to claim a breach of any provision of this Agreement will not be construed as a waiver of any subsequent breach nor affect the effectiveness of this Agreement, nor any part of the Agreement, nor prejudice either party as regards to any subsequent action.
18. Attorney’s Fees:
In the event that any action, including arbitration, is brought by either party as a result of a breach or default in any provision of this Agreement, the prevailing party in such action shall be awarded reasonable attorney’s fees and costs in addition to any other relief to which the party may be entitled.
19. Dispute Resolution and Arbitration:
Prior to the initiation of arbitration, if a dispute arises between the parties with respect to the parties’ obligations under this Agreement, the IHRM Account Services Manager and Client’s authorized internal representative shall negotiate in good faith to resolve such dispute. If such dispute is not resolved within ten (10) business days following the commencement of dispute resolution negotiations, the dispute shall be referred to IHRM’s President and to a comparable, authorized internal representative of Client. The parties shall attempt to resolve the dispute without the necessity of any formal proceeding. If their negotiation does not resolve the dispute within five (5) business days, the dispute shall be submitted to arbitration for final disposition. Either party may initiate such arbitration by serving written notice upon the other. Once arbitration is elected, the dispute shall be resolved by a committee of three arbitrators (one appointed by IHRM, one appointed by Client and one appointed by the two arbitrators previously selected). The arbitrators shall abide by the rules of the American Arbitration Association and their decision shall be final and binding. The Arbitrators shall be obligated to decide the dispute not by compromise, but according to law as if sitting in court applying the rules of evidence. The parties also agree that the existence of a dispute and any efforts to resolve a dispute (informal or through arbitration) shall be held in confidence and not disclosed to the general public. All arbitration shall be held in Austin, Texas unless the parties mutually agree on an alternative location.
20. Legal Matters and Duty to Cooperate:
In the event that an employee or a government agency or entity files any type of claim, lawsuit or charge against IHRM, Client or both, alleging a violation(s) of any law or for failure to do something which is/was otherwise required by law, Client and IHRM mutually agree to cooperate with each other in the defense of any such claim, lawsuit or charge. IHRM and Client will make available to each other as required any and all documents that either party has in its possession which relate to any such claim, lawsuit or charge including the availability of persons to provide testimony. Neither party shall have the duty to cooperate with the other if the dispute is between the parties themselves. The duty to cooperate will terminate in the event either party takes a position, which is adverse to the other, regardless of whether the initial dispute arose between the parties themselves. Otherwise, the parties mutually agree that this provision shall survive the termination of this Agreement and relates only to claims, lawsuits or charges that pertain or are related to this Agreement. 21. Survivorship:
The terms and conditions of paragraphs 4, 5(a), (b), (c), (f), (g), (j), and (o); 9, 12, 15, 17, 18, 19, and 20 shall survive termination of this Agreement.
Should any term, warranty, covenant, condition, or provision of this Agreement be held to be invalid or unenforceable, by a court or other body of competent jurisdiction, the balance of this Agreement shall remain in force and shall stand as if the unenforceable part did not exist. The captions of this Agreement are provided for convenience only and are not part of the terms and conditions of this Agreement.
23. Modification and Implementation:
Any modifications to this Agreement must be in writing and signed by authorized representatives of both parties in order to be enforceable. IHRM reserves the right to modify or implement new personnel or management procedures and policies pursuant to federal or state changes, amendments, or passages of new laws affecting same.
24. Governing Law:
This Agreement shall be governed by and construed in accordance with the laws of the State of Texas. All suits and special proceedings arising out of this Agreement shall be brought in the
courts in and for Travis County, Texas, or in the United States District Court for the Western District of Texas-Austin Division.
All notices, requests and communications provided hereunder and required by Client shall be in writing, sent by facsimile with written confirmation of successful transmission, or hand- delivered with a signed receipt, or mailed by prepaid United States registered, certified, or express mail, return receipt requested, or overnight courier service and addressed to the party's principal place of business as set forth in this Agreement (or to such other address provided in writing by such party).
If to IHRM:
Attn: Client Services
908 S. Main Street
Boerne TX 78006
If to Client:
26. Force Majeure.
Neither IHRM nor Client shall be required to perform any term, condition, or covenant of this Agreement so long as such performance is delayed or prevented by force majeure, which shall mean acts of God, strikes, lockouts, labor restrictions by any governmental authority, civil riot, floods, and any other cause not reasonably within the control of IHRM or Client and which by the exercise of due diligence by IHRM or Client is unable, wholly or in part, to prevent or overcome.
27. Employee Enrollment Forms.
Notwithstanding any provision herein to the contrary, Client must maintain a copy of each employee enrollment package submitted to IHRM, including, but not limited to, the employee enrollment form, form W-4, form I-9, and the employee service agreement. Client must produce a copy of any employee enrollment package or any form contained therein requested by IHRM within two business days of such request. In the event of any inquiry, audit, or investigation by any governmental agency or other third party, of IHRM or Client or any co-employee thereof, Client agrees to cooperate with IHRM in responding to such inquiry, audit or investigation, including providing IHRM with copies of any employment records requested by IHRM. Client shall indemnify, hold harmless, protect and defend IHRM Indemnified Parties from and against any liability, expense or fine assessed against IHRM by any state, local, or federal agency arising out of or related to the provision, completion, maintenance or verification of any employee enrollment package including, but not limited to, the employee enrollment form, form W-4, form I-9, and the employee service agreement, or verification of any employee.
Executed this March 5, 2021
INTEGRITY HR MANAGEMENT, LLC REPRESENTATIVE:
INTEGRITY HR MANAGEMENT IS A LICENSED STAFF LEASING COMPANY. UNRESOLVED COMPLAINTS REGARDING A LICENSEE OR QUESTIONS OR COMMENTS CONCERNING THE REGULATION OF STAFF LEASING SERVICES MAY BE ADDRESSED TO THE TEXAS DEPARTMENT OF LICENSING AND REGULATION, P.O. BOX 12157, AUSTIN, TX 78711.
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Document Name: Client Service Agreement
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