1-1 By: Haggerty (Senate Sponsor - Patterson) H.B. No. 1465
1-2 (In the Senate - Received from the House May 16, 1997;
1-3 May 16, 1997, read first time and referred to Committee on Economic
1-4 Development; May 18, 1997, reported favorably by the following
1-5 vote: Yeas 11, Nays 0; May 18, 1997, sent to printer.)
1-6 A BILL TO BE ENTITLED
1-7 AN ACT
1-8 relating to the regulation of staff leasing services companies;
1-9 providing penalties.
1-10 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-11 SECTION 1. Section 91.001, Labor Code, is amended to read as
1-12 follows:
1-13 Sec. 91.001. DEFINITIONS. In this chapter:
1-14 (1) "Applicant" means a business entity applying for a
1-15 license or the renewal of a license under this chapter.
1-16 (2) "Assigned employee" means an [a full-time]
1-17 employee under a staff leasing services arrangement [whose normal
1-18 work week is at least 25 hours and] whose work is performed in this
1-19 state. The term does not include an employee hired to support or
1-20 supplement a client company's work force in a special work
1-21 situation, including:
1-22 (A) an employee absence;
1-23 (B) a temporary skill shortage;
1-24 (C) a seasonal workload; or
1-25 (D) a special assignment or project.
1-26 (3) "Client company" means a person that contracts
1-27 with a license holder and is assigned employees by the license
1-28 holder under that contract.
1-29 (4) "Commission" means the Texas Commission of
1-30 Licensing and Regulation.
1-31 (5) "Commissioner" means the commissioner of licensing
1-32 and regulation.
1-33 (6) "Common ownership" means a direct or indirect
1-34 ownership interest in excess of 33-1/3 percent. The term includes
1-35 ownership through subsidiaries or affiliates.
1-36 (7) "Controlling person" means an individual who:
1-37 (A) possesses direct or indirect control of 25
1-38 percent [an officer or director of a corporation that offers or
1-39 proposes to offer staff leasing services, a shareholder holding 10
1-40 percent] or more of the voting securities [stock] of a corporation
1-41 that offers or proposes to offer staff leasing services [, or a
1-42 partner of a partnership that offers or proposes to offer staff
1-43 leasing services]; [or]
1-44 (B) possesses the authority to set policy and
1-45 direct management of a company that offers or proposes to offer
1-46 staff leasing services; or
1-47 (C) is employed, appointed, or authorized by a
1-48 company that offers or proposes to offer staff leasing services to
1-49 enter into a contract with a client company on behalf of the
1-50 company [an individual who directly or indirectly has the power to
1-51 direct or cause the direction of the management or policies of a
1-52 company that offers or proposes to offer staff leasing services
1-53 through:]
1-54 [(i) the ownership of voting securities;]
1-55 [(ii) contract; or]
1-56 [(iii) another means].
1-57 (8) [(7)] "Department" means the Texas Department of
1-58 Licensing and Regulation.
1-59 (9) "Governmental entity" means this state, or an
1-60 agency, county, or municipality of this state.
1-61 (10) [(8)] "Independent contractor" means a person who
1-62 contracts to perform work or provide a service for the benefit of
1-63 another and who:
1-64 (A) is paid by the job, not by the hour or some
2-1 other time-measured basis;
2-2 (B) is free to hire as many helpers as the
2-3 person desires and to determine what each helper will be paid; and
2-4 (C) is free to work for other contractors, or to
2-5 send helpers to work for other contractors, while under contract to
2-6 the hiring employer.
2-7 (11) [(9)] "License holder" means a person licensed
2-8 under this chapter to provide staff leasing services.
2-9 (12) "Net worth" of an applicant means the applicant's
2-10 assets minus the applicant's liabilities, as shown on the
2-11 applicant's financial statement or most recent federal tax return,
2-12 plus the sum of any guarantees, letters of credit, or securities
2-13 that may be submitted to the department.
2-14 (13) "Offer" means a proposal for acceptance or
2-15 rejection that is made in such a form that the promises or
2-16 performance to be rendered by each party are reasonably certain.
2-17 (14) [(10) "Public company" means a corporation whose
2-18 shares are listed on the New York Stock Exchange and that has
2-19 total assets that exceed $1 billion.]
2-20 [(11)] "Staff leasing services" means an arrangement
2-21 by which employees of a license holder are assigned to work at a
2-22 client company and in which employment responsibilities are in fact
2-23 shared by the license holder and the client company, the employee's
2-24 assignment is intended to be of a long-term or continuing nature,
2-25 rather than temporary or seasonal in nature, and a majority of the
2-26 work force at a client company worksite or a specialized group
2-27 within that work force consists of assigned employees of the
2-28 license holder. The term does not include:
2-29 (A) [a] temporary help [service];
2-30 (B) an independent contractor;
2-31 (C) the provision of services that otherwise
2-32 meet the definition of "staff leasing services" by one person
2-33 solely to other persons who are related to the service provider by
2-34 common ownership [a public company or any other person in which
2-35 that public company has a direct or indirect ownership interest in
2-36 excess of 33-1/3 percent, including ownership through subsidiaries
2-37 and affiliates]; or
2-38 (D) a temporary common worker employer as
2-39 defined by Chapter 92.
2-40 (15) [(12)] "Staff leasing services company" means a
2-41 business entity that offers staff leasing services.
2-42 [(13) "Temporary employee" means an employee hired for
2-43 a temporary help service.]
2-44 (16) [(14)] "Temporary help [service]" means an
2-45 arrangement by which an organization hires its own employees and
2-46 assigns them to a client to support or supplement the client's work
2-47 force in a special work situation, including:
2-48 (A) an employee absence;
2-49 (B) a temporary skill shortage;
2-50 (C) a seasonal workload; or
2-51 (D) a special assignment or project.
2-52 SECTION 2. Sections 91.002(a) and (c), Labor Code, are
2-53 amended to read as follows:
2-54 (a) The commissioner shall adopt rules as necessary to
2-55 administer this chapter[, including rules for the form and content
2-56 of a license issued under this chapter and a notice required under
2-57 Section 91.045].
2-58 (c) Notwithstanding any other provision of this chapter,
2-59 nothing in this [This] chapter preempts [does not preempt] the
2-60 existing statutory or rulemaking authority of any other state
2-61 agency or entity to regulate staff leasing services in a manner
2-62 consistent with the statutory authority of that state agency or
2-63 entity.
2-64 SECTION 3. Section 91.003(b), Labor Code, is amended to read
2-65 as follows:
2-66 (b) In particular, the Texas Workforce [Employment]
2-67 Commission, the Texas Department of Insurance, the Texas Workers'
2-68 Compensation Commission, and the attorney general's office shall
2-69 assist in the implementation of this chapter and shall provide
3-1 information to the department on request.
3-2 SECTION 4. Section 91.004, Labor Code, is amended by adding
3-3 Subsection (c) to read as follows:
3-4 (c) A license holder is not engaged in the unauthorized
3-5 practice of an occupation, trade, or profession that is licensed,
3-6 certified, or otherwise regulated by a governmental entity solely
3-7 by entering into a staff leasing agreement with a client company
3-8 and assigned employees.
3-9 SECTION 5. Section 91.012, Labor Code, is amended to read as
3-10 follows:
3-11 Sec. 91.012. GENERAL LICENSE REQUIREMENTS. [(a)] To be
3-12 qualified to serve as a controlling person of a license holder
3-13 under this chapter, that person must be at least 18 years of age[,
3-14 be of good moral character,] and have educational, managerial, or
3-15 business experience relevant to:
3-16 (1) operation of a business entity offering staff
3-17 leasing services; or
3-18 (2) service as a controlling person of a staff leasing
3-19 services company.
3-20 [(b) For purposes of this section, "good moral character"
3-21 means a personal history of honesty, trustworthiness, fairness, a
3-22 good reputation for fair dealing, and respect for the rights of
3-23 others and for the laws of this state and nation.]
3-24 SECTION 6. Section 91.013(a), Labor Code, is amended to read
3-25 as follows:
3-26 (a) On receipt of an original application for a license, the
3-27 [The] department shall conduct a thorough background investigation
3-28 of each individual applicant and of each controlling person of each
3-29 applicant to determine whether that applicant or controlling person
3-30 is qualified under this chapter. The department may deny an
3-31 application for the issuance [or renewal] of a license if the
3-32 department finds that an applicant or a controlling person is not
3-33 qualified under this chapter. The investigation must include:
3-34 (1) the submission of fingerprints for processing
3-35 through appropriate local, state, and federal law enforcement
3-36 agencies; and
3-37 (2) examination by the department of police or other
3-38 law enforcement records maintained by local, state, or federal law
3-39 enforcement agencies.
3-40 SECTION 7. Sections 91.014(b) and (d), Labor Code, are
3-41 amended to read as follows:
3-42 (b) The applicant may demonstrate the applicant's net worth
3-43 to the department by providing the department with the applicant's
3-44 financial statement or a copy of the applicant's most recent
3-45 federal tax return. The applicant may also satisfy the net worth
3-46 requirement through guarantees, letters of credit, a bond in an
3-47 amount that demonstrates compliance with the requirements of
3-48 Subsection (a), or other security acceptable to the department. A
3-49 guaranty is not acceptable to satisfy this subsection unless the
3-50 applicant submits sufficient evidence to satisfy the department
3-51 that the guarantor has adequate resources to satisfy the
3-52 obligations of the guaranty.
3-53 (d) A document submitted to establish net worth must show
3-54 the net worth on a date not earlier than nine [six] months before
3-55 the date on which the application is submitted. A document
3-56 submitted to establish net worth must be prepared or certified by
3-57 an independent certified public accountant. Information submitted
3-58 to or maintained by the department is subject to Chapter 552,
3-59 Government Code, other than information related to:
3-60 (1) identification of client companies;
3-61 (2) [supplied about] net worth;
3-62 (3) financial statements; or
3-63 (4) [, including copies of] federal tax returns[, is
3-64 proprietary and confidential and is exempt from disclosure to
3-65 persons other than other governmental agencies having a reasonable,
3-66 legitimate purpose for obtaining the information].
3-67 SECTION 8. Section 91.015, Labor Code, is amended to read as
3-68 follows:
3-69 Sec. 91.015. LICENSE APPLICATION. (a) To receive a staff
4-1 leasing services company original [or renewal] license, a person
4-2 shall [must] file with the department a written application
4-3 accompanied by the application fee.
4-4 (b) The department shall [may] require an applicant for a
4-5 license to provide information [and certifications] necessary to
4-6 determine that the applicant meets the licensing requirements of
4-7 this chapter. The department shall [may] also require the
4-8 applicant to provide information [and certifications] necessary to
4-9 determine whether individuals affiliated with the applicant are
4-10 qualified to serve as controlling persons.
4-11 (c) Before denying a license application, the department
4-12 shall provide written notice to the applicant specifying the
4-13 reasons for the denial. [An applicant or license holder is
4-14 ineligible for a license for two years after the date of a final
4-15 department action on the denial or revocation of a license applied
4-16 for or issued under this chapter. This restriction does not apply
4-17 to a denial or revocation of a license because of:]
4-18 [(1) an inadvertent error or omission in the
4-19 application if that error or omission is promptly corrected;]
4-20 [(2) insufficient experience documented to the
4-21 department at the time of the previous application; or]
4-22 [(3) the inability of the department to complete the
4-23 criminal background investigation required under Section 91.013
4-24 because of insufficient information received from a local, state,
4-25 or federal law enforcement agency.]
4-26 (d) An order of the department that denies, revokes, or
4-27 refuses to renew a license because of the alleged unsuitability of
4-28 a controlling person must provide that the applicant or license
4-29 holder may avoid the adverse action by removing that person as a
4-30 controlling person. Removal, demotion, or discharge of a
4-31 controlling person in response to an order of the department of the
4-32 alleged unsuitability of that controlling person is an affirmative
4-33 defense to any claim made by that individual based on the removal,
4-34 demotion, or discharge. [An applicant or license holder is
4-35 ineligible for a license for one year after the date of a final
4-36 department action on the denial or revocation of a license applied
4-37 for or issued under this chapter if the reason for the denial or
4-38 revocation was that one or more of the controlling persons
4-39 affiliated with the applicant or license holder was determined by
4-40 the department to be unsuitable and each unsuitable controlling
4-41 person has in fact ceased to be a controlling person of the
4-42 applicant or license holder.]
4-43 (e) A controlling person who has been evaluated by the
4-44 department under this chapter is not required to be reevaluated if
4-45 that person changes the person's affiliation or employment from one
4-46 applicant or license holder to another applicant or license holder.
4-47 SECTION 9. Section 91.016, Labor Code, is amended to read as
4-48 follows:
4-49 Sec. 91.016. LICENSE ISSUANCE; TERM. (a) The department
4-50 shall issue a license to an applicant who the department determines
4-51 has met [determined to meet] the requirements of this chapter. The
4-52 department shall notify an applicant of any deficiency in the
4-53 application not later than the 30th day after the date on which the
4-54 department receives the application forms. The department shall
4-55 issue the license not later than the 90th day after the date on
4-56 which the completed application is filed with the department.
4-57 (b) A license issued or renewed by the department under this
4-58 chapter is valid for two years from the date of the issuance or
4-59 renewal [one year]. The department shall renew a license on
4-60 receipt of a complete renewal application form [approved by the
4-61 department] and payment of the license [required] renewal fee
4-62 [fees].
4-63 (c) Each applicant or license holder shall disclose to the
4-64 department the addition of a new controlling person not later than
4-65 the 45th day after the date on which the person assumes the duties
4-66 of a controlling person. That person may serve as a controlling
4-67 person while the department is conducting any necessary
4-68 investigation. If the department determines not to approve the new
4-69 controlling person, the department shall notify the applicant or
5-1 license holder and that controlling person at least 20 days before
5-2 taking action against the applicant or license holder.
5-3 SECTION 10. Section 91.017(a), Labor Code, is amended to
5-4 read as follows:
5-5 (a) Each applicant for an original or renewal staff leasing
5-6 services company license shall pay to the department before [on]
5-7 the issuance of the license or license renewal a fee set by the
5-8 commission by rule in an amount not to exceed $6,000 for the
5-9 two-year license period [$3,000].
5-10 SECTION 11. Section 91.018, Labor Code, is amended by adding
5-11 Subsections (d)-(f) to read as follows:
5-12 (d) A license holder may amend the name specified in its
5-13 license to add a trade name, trademark, service mark, or parent
5-14 company name. An amendment made under this subsection must comply
5-15 with the requirements imposed under Subsection (a). The department
5-16 may charge a fee not to exceed $50 for processing of such an
5-17 amendment.
5-18 (e) A license holder offering staff leasing services in more
5-19 than one state may advertise in this state using the name of its
5-20 parent company or under a trade name, trademark, or service mark.
5-21 The trade name, trademark, service mark, or parent company name
5-22 must be listed on the license in addition to the licensed name used
5-23 by the license holder in this state.
5-24 (f) Each written proposal provided to a prospective client
5-25 company and each contract between a license holder and a client
5-26 company or assigned employee shall clearly identify the name of the
5-27 license holder. A proposal or contract may also identify the trade
5-28 name, trademark, service mark, or parent company name of the
5-29 license holder. A license holder may use written materials
5-30 including forms, benefit information, letterhead, and business
5-31 cards that bear only the trade name, trademark, service mark, or
5-32 parent company name of the license holder.
5-33 SECTION 12. Section 91.019, Labor Code, is amended to read
5-34 as follows:
5-35 Sec. 91.019. LIMITED LICENSE. (a) The commissioner by rule
5-36 shall provide for the issuance of a limited license to [for] a
5-37 person who seeks to offer [offers] limited staff leasing services
5-38 in this state and is domiciled [primarily engaged in offering
5-39 staff leasing services] in another state and licensed or registered
5-40 as a staff leasing services company in the state in which the
5-41 person is domiciled. [The principal place of business of a person
5-42 offering staff leasing services and who applies for a license under
5-43 this section must be located in a state other than this state.]
5-44 (b) For purposes of this section, a staff leasing services
5-45 company is considered to be offering [person offers] limited staff
5-46 leasing services if the staff leasing services company:
5-47 (1) [person] employs fewer than 50 [20] assigned
5-48 employees in this state at any one time;
5-49 (2) does not provide assigned employees to a client
5-50 company based or domiciled in this state; and
5-51 (3) does not maintain an office in this state or
5-52 solicit client companies located or domiciled in this state.
5-53 (c) A staff leasing services company that offers [person
5-54 offering] limited staff leasing services shall complete the
5-55 application forms and pay the fees for a limited license as
5-56 prescribed by the department. A limited license is valid for one
5-57 year from the date of issuance and may be renewed annually on
5-58 submission of a renewal application and payment of the required
5-59 fees [must comply with all provisions of this chapter with respect
5-60 to those services performed within this state].
5-61 (d) The department may use information obtained from
5-62 regulatory agencies in other states in evaluating an applicant for
5-63 a limited license.
5-64 SECTION 13. Section 91.020(a), Labor Code, is amended to
5-65 read as follows:
5-66 (a) The department may take disciplinary action against a
5-67 license holder on any of the following grounds:
5-68 (1) being convicted or having a controlling person of
5-69 the license holder who is convicted of:
6-1 (A) bribery, fraud, or intentional or material
6-2 misrepresentation in obtaining, attempting to obtain, or renewing a
6-3 license;
6-4 (B) a crime that relates to the operation of a
6-5 staff leasing service or the ability of the license holder or any
6-6 controlling person of the license holder to operate a staff leasing
6-7 service;
6-8 (C) a crime that relates to the classification,
6-9 misclassification, or under-reporting of employees under Subtitle
6-10 A, Title 5;
6-11 (D) a crime that relates to the establishment or
6-12 maintenance of a self-insurance program, whether health insurance,
6-13 workers' compensation insurance, or other insurance; or
6-14 (E) a crime that relates to fraud, deceit, or
6-15 misconduct in the operation of a staff leasing service;
6-16 (2) engaging in staff leasing services or offering to
6-17 engage in the provision of staff leasing services without a
6-18 license;
6-19 (3) transferring or attempting to transfer a license
6-20 issued under this chapter;
6-21 (4) violating this chapter or any order or rule issued
6-22 by the department or commissioner under this chapter;
6-23 (5) failing after the 31st day after the date on which
6-24 a felony conviction of a controlling person is final to notify the
6-25 department in writing of the conviction;
6-26 (6) failing to cooperate with an investigation,
6-27 examination, or audit of the license holder's records conducted by
6-28 the license holder's insurance company or the insurance company's
6-29 designee, as allowed by the insurance contract or as authorized by
6-30 law by the Texas Department of Insurance;
6-31 (7) failing after the 31st day after the effective
6-32 date of a change in ownership, principal business address, or the
6-33 address of accounts and records to notify the department and the
6-34 Texas Department of Insurance of the change;
6-35 (8) failing to correct any tax filings or payment
6-36 deficiencies within a reasonable time as determined by the
6-37 commissioner;
6-38 (9) refusing, after reasonable notice, to meet
6-39 reasonable health and safety requirements within the license
6-40 holder's control and made known to the license holder by a federal
6-41 or state agency;
6-42 (10) being delinquent in the payment of the license
6-43 holder's insurance premiums other than those subject to a
6-44 legitimate dispute;
6-45 (11) being delinquent in the payment of any employee
6-46 benefit plan premiums or contributions other than those subject to
6-47 a legitimate dispute;
6-48 (12) knowingly making a material misrepresentation to
6-49 an insurance company or to the department or other governmental
6-50 agency;
6-51 (13) failing to maintain the net worth requirements
6-52 required under Section 91.014; or
6-53 (14) using staff leasing services to avert or avoid an
6-54 existing collective bargaining agreement.
6-55 SECTION 14. Section 91.021, Labor Code, is amended to read
6-56 as follows:
6-57 Sec. 91.021. SANCTIONS [DISCIPLINARY PROCEDURES;
6-58 REINSTATEMENT]. (a) On a finding that a ground for disciplinary
6-59 action exists under one or more provisions of Section 91.020(a),
6-60 the department shall impose administrative sanctions as provided by
6-61 Section 17, Article 9100, Revised Statutes [may:]
6-62 [(1) deny an application for a license;]
6-63 [(2) revoke, restrict, or refuse to renew a license;]
6-64 [(3) impose an administrative penalty in an amount not
6-65 less than $1,000 for each violation, but not more than $50,000;]
6-66 [(4) issue a reprimand; or]
6-67 [(5) place the license holder on probation for the
6-68 period and subject to conditions that the department specifies].
6-69 (b) On revocation of a license, the license holder shall
7-1 immediately return the revoked license to the department.
7-2 (c) Disciplinary action may be taken, an application for a
7-3 new or renewal license may be denied, a license may be revoked, or
7-4 a determination that a controlling person is unqualified may be
7-5 made by the department only subject to Chapter 2001, Government
7-6 Code, with notice and an opportunity for hearing provided to the
7-7 affected applicant, license holder, or controlling person.
7-8 [(d) If a license is revoked or renewal is denied, the
7-9 affected license holder may request a reinstatement hearing after a
7-10 minimum of one year. The department may reinstate or renew the
7-11 license only if the cause of the revocation or nonrenewal has been
7-12 corrected.]
7-13 SECTION 15. Section 91.031, Labor Code, is amended by adding
7-14 Subsection (c) to read as follows:
7-15 (c) The written notice required by Subsection (b) must be
7-16 given to each assigned employee not later than the first payday
7-17 after the date on which that individual becomes an assigned
7-18 employee.
7-19 SECTION 16. Section 91.032, Labor Code, is amended to read
7-20 as follows:
7-21 Sec. 91.032. CONTRACT REQUIREMENTS. (a) A contract between
7-22 a license holder and a client company must provide that the
7-23 license holder:
7-24 (1) reserves a [the] right of direction and control
7-25 over employees assigned to a client's worksite [worksites];
7-26 (2) assumes responsibility for the payment of wages to
7-27 the assigned employees without regard to payment [payments] by the
7-28 client to the license holder;
7-29 (3) assumes responsibility for the payment of payroll
7-30 taxes and collection of taxes from payroll on assigned employees;
7-31 (4) retains a [the] right to hire, fire, discipline,
7-32 and reassign the assigned employees; and
7-33 (5) retains a [the] right of direction and control
7-34 over the adoption of employment and safety policies and the
7-35 management of workers' compensation claims, claim filings, and
7-36 related procedures.
7-37 (b) Notwithstanding any other provision of this chapter, a
7-38 client company is responsible for the exercise of direction and
7-39 control over an assigned employee as necessary to conduct the
7-40 business of the client company and without which the client company
7-41 would be unable to:
7-42 (1) conduct its business;
7-43 (2) discharge any applicable fiduciary responsibility;
7-44 or
7-45 (3) comply with any applicable license requirement or
7-46 regulatory or statutory requirement.
7-47 (c) A client company is solely responsible for:
7-48 (1) the goods and services produced by the client
7-49 company; and
7-50 (2) the acts or omissions of an employee assigned to
7-51 the client company.
7-52 SECTION 17. Section 91.041(b), Labor Code, is amended to
7-53 read as follows:
7-54 (b) With respect to any insurance or benefit plan provided
7-55 by a license holder for the benefit of its assigned employees, a
7-56 [Each] license holder shall disclose the following information to
7-57 the department, each client company, and its assigned employees
7-58 [information relating to any insurance or benefit plan provided for
7-59 the benefit of its assigned employees. The information must
7-60 include]:
7-61 (1) the type of coverage;
7-62 (2) the identity of each insurer for each type of
7-63 coverage;
7-64 (3) the amount of benefits provided for each type of
7-65 coverage and to whom or in whose behalf benefits are to be paid;
7-66 (4) the policy limits on each insurance policy; and
7-67 (5) whether the coverage is fully insured, partially
7-68 insured, or fully self-funded.
7-69 SECTION 18. Section 91.044, Labor Code, is amended to read
8-1 as follows:
8-2 Sec. 91.044. UNEMPLOYMENT TAXES; PAYROLL. (a) A license
8-3 holder is the employer of an assigned employee for purposes of
8-4 Subtitle A, Title 4, and Chapter 61. In addition to any other
8-5 reports required to be filed by law, a license holder shall report
8-6 quarterly to the Texas Workforce [Employment] Commission on a form
8-7 prescribed by the Texas Workforce [Employment] Commission the name,
8-8 address, telephone number, federal income tax identification
8-9 number, and classification code as described in the "Standard
8-10 Industrial Classification Manual" published by the United States
8-11 Office of Management and Budget of each client company.
8-12 (b) [On contracting with a client company, a license holder
8-13 shall notify the Texas Employment Commission of the contract. The
8-14 notification shall be made in the form prescribed by the Texas
8-15 Employment Commission.]
8-16 [(c)] For purposes of Subtitle A, Title 4, in the event of
8-17 the termination of a contract between a license holder and a client
8-18 company or the failure by a staff leasing entity to submit reports
8-19 or make tax payments as required by that subtitle, the contracting
8-20 client company shall be treated as a new employer without a
8-21 previous experience record unless that client company is otherwise
8-22 eligible for an experience rating.
8-23 SECTION 19. Section 91.048, Labor Code, is amended to read
8-24 as follows:
8-25 Sec. 91.048. REQUIRED INFORMATION. Each license holder
8-26 shall:
8-27 (1) maintain adequate books and records regarding the
8-28 license holder's duties and responsibilities;
8-29 (2) maintain and make available at all times to the
8-30 commissioner the following information, which shall be treated as
8-31 proprietary and confidential and is exempt from disclosure to
8-32 persons other than other governmental agencies having a reasonable,
8-33 legitimate purpose for obtaining the information:
8-34 (A) the correct name, address, and telephone
8-35 number of each client company;
8-36 (B) each client company contract; and
8-37 (C) a listing by classification code as
8-38 described in the "Standard Industrial Classification Manual"
8-39 published by the United States Office of Management and Budget, of
8-40 each client company;
8-41 (3) notify the department of any addition or deletion
8-42 of a controlling person as listed on the license application or
8-43 renewal form by providing the name of the person not later than the
8-44 45th [30th] day after the date on which the person is added or
8-45 deleted as a controlling person; and
8-46 (4) provide a [notarized] biographical history to the
8-47 department in connection with the addition of a new controlling
8-48 person.
8-49 SECTION 20. Section 91.061, Labor Code, is amended to read
8-50 as follows:
8-51 Sec. 91.061. PROHIBITED ACTS. A person may not:
8-52 (1) engage in or offer staff leasing services without
8-53 holding a license under this chapter as a staff leasing services
8-54 company;
8-55 (2) use the name or title "staff leasing company,"
8-56 "employee leasing company," "licensed staff leasing company," [or]
8-57 "staff leasing services company," "professional employer
8-58 organization," or "administrative employer" or otherwise represent
8-59 that the entity is licensed under this chapter unless the entity
8-60 holds a license issued under this chapter;
8-61 (3) represent as the person's own the license of
8-62 another person or represent that a person is licensed if the person
8-63 does not hold a license;
8-64 (4) give materially false or forged evidence to the
8-65 department in connection with obtaining or renewing a license or in
8-66 connection with disciplinary proceedings under this chapter; or
8-67 (5) use or attempt to use a license that has expired
8-68 or been revoked.
8-69 SECTION 21. Subchapter C, Chapter 201, Labor Code, is
9-1 amended by adding Section 201.030 to read as follows:
9-2 Sec. 201.030. STAFF LEASING SERVICES COMPANY. For the
9-3 purposes of this subtitle, "staff leasing services company" has the
9-4 meaning assigned by Section 91.001.
9-5 SECTION 22. Section 207.045, Labor Code, is amended by
9-6 adding Subsection (i) to read as follows:
9-7 (i) An assigned employee of a staff leasing services company
9-8 is considered to have left the assigned employee's last work
9-9 voluntarily without good cause connected with the work if the
9-10 assigned employee does not contact the staff leasing services
9-11 company for reassignment. An assigned employee is not considered to
9-12 have left work voluntarily without good cause connected with the
9-13 work under this subsection unless the assigned employee has been
9-14 advised:
9-15 (1) that the assigned employee is obligated to contact
9-16 the staff leasing services company on dismissal by a client
9-17 company; and
9-18 (2) the assigned employee may be denied unemployment
9-19 compensation benefits if the assigned employee fails to contact the
9-20 staff leasing services company as provided by Subdivision (1).
9-21 SECTION 23. Chapter 91, Labor Code, as amended by this Act,
9-22 applies only to a staff leasing services company license that is
9-23 issued or renewed on or after the effective date of this Act.
9-24 SECTION 24. Section 207.045, Labor Code, as amended by this
9-25 Act, applies only to a claim for unemployment compensation benefits
9-26 that is filed with the Texas Workforce Commission on or after the
9-27 effective date of this Act. A claim filed before that date is
9-28 governed by the law in effect on the date that the claim was filed,
9-29 and the former law is continued in effect for that purpose.
9-30 SECTION 25. This Act takes effect September 1, 1997.
9-31 SECTION 26. The importance of this legislation and the
9-32 crowded condition of the calendars in both houses create an
9-33 emergency and an imperative public necessity that the
9-34 constitutional rule requiring bills to be read on three several
9-35 days in each house be suspended, and this rule is hereby suspended.
9-36 * * * * *