By Hilbert H.B. No. 1184
76R12129 JMM-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the regulation of staff leasing services.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Sections 91.001(14) and (15), Labor Code, are
1-5 amended to read as follows:
1-6 (14) "Staff leasing services" means an arrangement by
1-7 which employees of a license holder are assigned to work at a
1-8 client company and in which employment responsibilities are in fact
1-9 shared by the license holder and the client company, the employee's
1-10 assignment is intended to be of a long-term or continuing nature,
1-11 rather than temporary or seasonal in nature, and a majority of the
1-12 work force at a client company worksite or a specialized group
1-13 within that work force consists of assigned employees of the
1-14 license holder. The term includes professional employer
1-15 organization services. The term does not include:
1-16 (A) temporary help;
1-17 (B) an independent contractor;
1-18 (C) the provision of services that otherwise
1-19 meet the definition of "staff leasing services" by one person
1-20 solely to other persons who are related to the service provider by
1-21 common ownership; or
1-22 (D) a temporary common worker employer as
1-23 defined by Chapter 92.
1-24 (15) "Staff leasing services company" means a business
2-1 entity that offers staff leasing services. The term includes a
2-2 professional employer organization.
2-3 SECTION 2. Section 91.002(b), Labor Code, is amended to read
2-4 as follows:
2-5 (b) Each person who offers staff leasing services [license
2-6 holder] is subject to this chapter and the rules adopted by the
2-7 commissioner.
2-8 SECTION 3. Subchapter A, Chapter 91, Labor Code, is amended
2-9 by adding Sections 91.005, 91.006, and 91.007 to read as follows:
2-10 Sec. 91.005. APPLICATION OF CERTAIN PROCUREMENT LAWS. With
2-11 respect to a bid, contract, purchase order, or agreement entered
2-12 into with the state or a political subdivision of the state, a
2-13 client company's status or certification as a small,
2-14 minority-owned, disadvantaged, or woman-owned business enterprise
2-15 or as a historically underutilized business is not affected because
2-16 the client company has entered into an agreement with a license
2-17 holder or uses the services of a license holder.
2-18 Sec. 91.006. WORKERS' COMPENSATION COVERAGE. (a) A
2-19 certificate of insurance coverage showing that a license holder
2-20 maintains a policy of workers' compensation insurance constitutes
2-21 proof of workers' compensation insurance coverage for the license
2-22 holder and the client company with respect to all employees of the
2-23 license holder assigned to the client company. The state and a
2-24 political subdivision of the state shall accept a certificate of
2-25 insurance coverage described by this section as proof of workers'
2-26 compensation coverage under Chapter 406.
2-27 (b) For a client company that has employees who are not
3-1 assigned employees under a staff leasing services agreement, the
3-2 state or a political subdivision of the state may require the
3-3 client company to furnish separate proof of workers' compensation
3-4 insurance coverage for those employees.
3-5 Sec. 91.007. APPLICATION OF LABOR RELATIONS LAWS. This
3-6 chapter does not relieve a client company of a right, obligation,
3-7 or duty under:
3-8 (1) Chapter 101;
3-9 (2) the federal National Labor Relations Act (29
3-10 U.S.C. Section 151 et seq.);
3-11 (3) the federal Railway Labor Act (45 U.S.C. Section
3-12 151 et seq.); or
3-13 (4) any other law governing labor relations.
3-14 SECTION 4. Sections 91.015(c) and (d), Labor Code, are
3-15 amended to read as follows:
3-16 (c) Before denying a license application, the department
3-17 shall provide written notice to an applicant specifying the reasons
3-18 for the denial. The department shall provide the applicant at
3-19 least 30 days after the date of the notice to address the reasons
3-20 for the denial. For good cause and on a showing of a good faith
3-21 effort to remedy the reasons for the denial, the commissioner may
3-22 grant an additional 30 days to remedy the reasons for denial.
3-23 (d) Removal, demotion, or discharge of a controlling person
3-24 in response to notice from [an order of] the department of the
3-25 alleged unsuitability of that controlling person is an affirmative
3-26 defense to any claim by that individual based on the removal,
3-27 demotion, or discharge.
4-1 SECTION 5. Section 91.019(a), Labor Code, is amended to read
4-2 as follows:
4-3 (a) The commissioner by rule shall provide for the issuance
4-4 of a limited license to a person who seeks to offer limited staff
4-5 leasing services in this state [and is domiciled in another state
4-6 and licensed or registered as a staff leasing services company in
4-7 the state in which the person is domiciled].
4-8 SECTION 6. Section 91.021, Labor Code, is amended by adding
4-9 Subsection (d) to read as follows:
4-10 (d) In assessing an administrative penalty, the department
4-11 shall consider the severity of the violation, whether the violation
4-12 was wilful or intentional, whether the license holder acted in good
4-13 faith to avoid or mitigate the violation, whether the license
4-14 holder has engaged in similar violations in the past, and the
4-15 penalties previously assessed by the department against other
4-16 license holders under this chapter. The department by rule shall
4-17 establish a written enforcement plan that provides notice to
4-18 license holders of the specific ranges of penalties that apply to
4-19 specific alleged violations and the criteria by which the
4-20 department determines the amount of a proposed administrative
4-21 penalty.
4-22 SECTION 7. Section 91.032, Labor Code, is amended to read as
4-23 follows:
4-24 Sec. 91.032. CONTRACT REQUIREMENTS. (a) A contract between
4-25 a license holder and a client company must provide that the license
4-26 holder:
4-27 (1) shares, as provided by Subsection (b), with the
5-1 client company [reserves] the right of direction and control over
5-2 employees assigned to a client's worksites;
5-3 (2) assumes responsibility for the payment of wages to
5-4 the assigned employees without regard to payments by the client to
5-5 the license holder;
5-6 (3) assumes responsibility for the payment of payroll
5-7 taxes and collection of taxes from payroll on assigned employees;
5-8 (4) shares, as provided by Subsection (b), with the
5-9 client company [retains] the right to hire, fire, discipline, and
5-10 reassign the assigned employees; and
5-11 (5) shares, as provided by Subsection (b), with the
5-12 client company [retains] the right of direction and control over
5-13 the adoption of employment and safety policies and the management
5-14 of workers' compensation claims, claim filings, and related
5-15 procedures.
5-16 (b) Notwithstanding any other provision of this chapter, a
5-17 client company retains responsibility for:
5-18 (1) the direction and control of assigned employees as
5-19 necessary to conduct the client company's business, discharge any
5-20 applicable fiduciary duty, or comply with any licensure,
5-21 regulatory, or statutory requirement;
5-22 (2) goods and services produced by the client company;
5-23 and
5-24 (3) the acts, errors, and omissions of assigned
5-25 employees committed within the scope of the client company's
5-26 business.
5-27 SECTION 8. (a) This Act takes effect September 1, 1999.
6-1 (b) The change in law made by this Act to Section 91.015(c),
6-2 Labor Code, applies only to the denial of a license application
6-3 that occurs on or after the effective date of this Act. A license
6-4 denial that occurs before the effective date of this Act is
6-5 governed by the law in effect on the date the license denial
6-6 occurred, and the former law is continued in effect for that
6-7 purpose.
6-8 (c) Section 91.021(d), Labor Code, as added by this Act,
6-9 applies to an administrative penalty assessed on or after the
6-10 effective date of this Act. An administrative penalty assessed
6-11 before the effective date of this Act is governed by the law in
6-12 effect on the date the penalty was assessed, and the former law is
6-13 continued in effect for that purpose.
6-14 (d) The change in law made by this Act to Section 91.032,
6-15 Labor Code, applies only to a contract between a staff leasing
6-16 service license holder and a client company entered into on or
6-17 after the effective date of this Act. A contract entered into
6-18 before that date is governed by the law in effect on the date the
6-19 contract was entered into, and the former law is continued in
6-20 effect for that purpose.
6-21 SECTION 9. The importance of this legislation and the
6-22 crowded condition of the calendars in both houses create an
6-23 emergency and an imperative public necessity that the
6-24 constitutional rule requiring bills to be read on three several
6-25 days in each house be suspended, and this rule is hereby suspended.