By Hilbert H.B. No. 1184
Line and page numbers may not match official copy.
Bill not drafted by TLC or Senate E&E.
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. Subsections (14) and (15), Section 91.001, Labor
1-5 Code, are 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 consists of assigned employees of the license holder.
1-13 The term includes professional employer organization services and
1-14 PEO services. The term does not include:
1-15 (A) temporary help;
1-16 (B) an independent contractor;
1-17 (C) the provision of services that otherwise
1-18 meet the definition of "staff leasing services" by one person
1-19 solely to other persons who are related to the service provider by
1-20 common ownership; or
1-21 (D) a temporary common worker employer as
2-1 defined by Chapter 92.
2-2 (15) "Staff leasing services company" means a business
2-3 entity that offers staff leasing services. The term also includes
2-4 a professional employer organization or PEO.
2-5 SECTION 2. Section 91.002(b), Labor Code, is amended to read
2-6 as follows:
2-7 (b) [Each license holder is] All entities offering staff
2-8 leasing services are subject to this chapter and the rules adopted
2-9 by the commissioner.
2-10 SECTION 3. Section 91.004, Labor Code, is amended by adding
2-11 Subsections (d) and (e) to read as follows:
2-12 (d) With respect to any bid, contract, purchase order, or
2-13 agreement entered into with this state or any political subdivision
2-14 of this state, a client company of a licensed staff leasing
2-15 services company does not affect its own status or certification as
2-16 a small, minority owned, disadvantaged or woman owned business
2-17 enterprise or a historically underutilized business if the client
2-18 company enters into an agreement with a licensed staff leasing
2-19 services company or utilizes the services of a licensed staff
2-20 leasing services company.
2-21 (e) A certificate of insurance evidencing coverage under a
2-22 policy of workers' compensation insurance held by a licensed staff
2-23 leasing services company shall be proof of workers' compensation
2-24 coverage for the licensed staff leasing services company and its
2-25 client company for all assigned employees. The state and all
3-1 political subdivisions of this state shall accept a certificate of
3-2 insurance evidencing coverage maintained by a licensed staff
3-3 leasing services company as proof of workers' compensation coverage
3-4 for the staff leasing services company and the client company under
3-5 Chapter 406, Labor Code for all assigned employees. If a client
3-6 company has employees that are not assigned employees under a staff
3-7 leasing services agreement, the state or political subdivision of
3-8 the state may require the client company to furnish separate proof
3-9 of workers' compensation coverage for the employees who are not
3-10 assigned employees.
3-11 SECTION 4. Subsections (c) and (d), Section 91.015, Labor
3-12 Code, are amended to read as follows:
3-13 (c) Before denying a license application, the department
3-14 shall provide written notice to an applicant specifying the reasons
3-15 for the denial and shall provide the applicant thirty (30) calendar
3-16 days in which to correct the reasons for the proposed denial. For
3-17 good cause and on a showing of good faith efforts to correct the
3-18 reasons for the proposed denial, the executive director may grant
3-19 an additional thirty (30) days to correct the reasons for the
3-20 proposed denial.
3-21 (d) Removal, demotion, or discharge of a controlling person
3-22 in response to [an order of] notice from the department of the
3-23 alleged unsuitability of that controlling person is an affirmative
3-24 defense to any claim by that individual based on the removal,
3-25 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 Subsections (d) and (e) to read as follows:
4-10 (d) In assessing fines and penalties, the department shall
4-11 consider the severity of the offense, whether the violation was
4-12 willful or intentional, whether the staff leasing services company
4-13 acted in good faith to avoid or mitigate the violation, whether the
4-14 staff leasing services company has engaged in similar violations in
4-15 the past, and the fines and penalties previously assessed by the
4-16 department under this chapter against other staff leasing services
4-17 companies. The department shall, by rule, establish a written
4-18 enforcement plan that provides notice to staff leasing services
4-19 companies of the specific ranges of penalties which apply to
4-20 specific alleged violations and the criteria by which the
4-21 department determines what penalty amount to seek.
4-22 (e) All hearings conducted under the authority of this
4-23 chapter shall be conducted by the State Office of Administrative
4-24 Hearings.
4-25 SECTION 7. Section 91.032, Labor Code, is amended to read as
5-1 follows:
5-2 (A) A contract between a staff leasing services company
5-3 [license holder] and a client company must provide that the staff
5-4 leasing services company [license holder]:
5-5 (1) reserves a [the] right of direction and control
5-6 over employees assigned to a client's worksites;
5-7 (2) assumes responsibility for the payment of wages to
5-8 the assigned employees without regard to payments by the client to
5-9 the staff leasing services company [license holder];
5-10 (3) assumes responsibility for the payment of payroll
5-11 taxes and collection of taxes from payroll on assigned employees;
5-12 (4) retains a [the] right to hire, fire, discipline,
5-13 and reassign the assigned employees; and
5-14 (5) retains a [the] right of direction and control
5-15 over the adoption of employment and safety policies and the
5-16 management of workers' compensation claims, claim filings, and
5-17 related procedures.
5-18 (b) Notwithstanding any other provision of this chapter, a
5-19 client company retains responsibility for:
5-20 (1) exercise of the direction and control over
5-21 assigned employees as necessary to conduct the business of the
5-22 client company and without which the client company would be unable
5-23 to conduct its business, discharge any applicable fiduciary duties
5-24 of the client company, or comply with any licensure, regulatory, or
5-25 statutory requirements;
6-1 (2) for the goods and services produced by the client
6-2 company; and
6-3 (3) the acts, errors, or omissions of the assigned
6-4 employees committed within the course and scope of the client's
6-5 business.
6-6 SECTION 8. Section 91.043(a), Labor Code, is amended to read
6-7 as follows:
6-8 (a) A staff leasing services company [license holder] may
6-9 not sponsor a plan of self-insurance for health benefits except as
6-10 permitted by the Employee Retirement Income Security Act of 1974
6-11 (29 U.S.C., Section 1001 et seq.)
6-12 SECTION 9. This Act applies to all staff leasing services
6-13 companies and license holders in effect on or after the effective
6-14 date of this Act.
6-15 SECTION 10. This Act takes effect September 1, 1999.
6-16 SECTION 11. EMERGENCY. The importance of this legislation
6-17 and the crowded condition of the calendars in both houses create an
6-18 emergency and an imperative public necessity that the
6-19 constitutional rule requiring bills to be read on three several
6-20 days in each house be suspended, and this rule is hereby suspended.