on client funds Sec. 4. Notwithstanding section 3(b)(2) of this chapter, a payroll service provider shall be permitted to retain any income generated on client funds while held in a payroll service provider's legal possession pending remittance to authorized payees if the client agreement
expressly permits it and the payroll service provider: (1) complies with the National Automated Clearing House Association rules; (2) maintains bank and custodial accounts for client funds that are segregated from any operating funds of the payroll service provider; and (3) either: (A) is a publicly held company (subject to Securities and Exchange Commission reporting, public company accounting standards, and audit requirements); (B) is subject to federal or Indiana financial regulatory oversight related to the handling of client funds; (C) is subject to review by partner financial institutions at least annually; or (D) conducts annual SOC 1 or SOC 2 reports of security and integrity controls. As added by P.L.97-2021, SEC.2.