The company has sought to disrupt the payroll and benefits administration business by offering a free online platform. Its business model is based on connecting its customers with health insurance plans and earning commissions from the insurers.

The startup took off quickly and saw its value balloon to $4.5 billion at the end of 2015 as investors predicted it would take over legacy giants of the HR administration industry, such as ADP.

Things went south quickly, however, when news broke that the company had been allowing unlicensed brokers handle its insurance sales in Arizona and Washington State. Conrad resigned in February of last year, handing over the reins of the company to then-COO David Sacks.

Sacks stepped down in December, saying he had accomplished his goal of getting the company on the right track. He is staying on as company chairman.

In a statement, Sacks described Zenefits' ability to attract an "amazingly accomplished" CEO in Fulcher as a "validation" of the company's efforts to reform its image and practices over the past year since Conrad's resignation.

The company recently rolled out a new platform, which it boasted includes an even greater variety of applications and enhanced mobile capabilities. It also touted new clients, including big-name companies such as Lyft, Salesforce and Expensify.