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A BILL TO BE ENTITLED
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AN ACT
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relating to the regulation of professional employer organizations. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 91.001(11), Labor Code, is amended to |
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read as follows: |
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(11) "License holder" means a person who holds a |
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license issued by the department [licensed under this chapter] to |
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provide professional employer services. |
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SECTION 2. The heading to Section 91.016, Labor Code, is |
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amended to read as follows: |
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Sec. 91.016. LICENSE ISSUANCE; TERM; EFFECT OF |
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EXPIRATION. |
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SECTION 3. Section 91.016, Labor Code, is amended by |
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amending Subsection (b) and adding Subsection (d) to read as |
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follows: |
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(b) A license issued or renewed by the department under this |
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chapter is valid for one year from the date of the issuance or |
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renewal. The department shall renew a license in accordance with |
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Subchapter H, Chapter 51, Occupations Code, and the rules adopted |
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by the department [on receipt of a complete renewal application |
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form and payment of the license renewal fee]. |
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(d) Notwithstanding any other law, for purposes of this |
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chapter, if a license holder fails to timely apply for license |
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renewal, the license holder's status as employer of a covered |
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employee continues until the expiration of 18 months after the date |
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the license expires. If the license holder fails to apply for |
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license renewal before the expiration of the 18th month after the |
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license expiration date: |
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(1) the license holder's status as employer of a |
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covered employee terminates; and |
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(2) the license holder is subject to disciplinary |
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action if the license holder engages in or offers professional |
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employer services at any time while the license is expired. |
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SECTION 4. Section 91.020, Labor Code, is amended to read as |
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follows: |
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Sec. 91.020. GROUNDS FOR DISCIPLINARY ACTION. The |
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department may take disciplinary action against a person under |
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Subchapter F, Chapter 51, Occupations Code, regardless of whether |
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the person holds a license under this chapter, [license holder] on |
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any of the following grounds: |
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(1) engaging in professional employer services or |
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offering to engage in the provision of professional employer |
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services: |
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(A) without a license; or |
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(B) while the person's license is expired, |
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suspended, or inactive; |
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(2) transferring or attempting to transfer a license |
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issued under this chapter; |
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(3) violating this chapter or any order or rule issued |
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by the executive director or commission under this chapter; |
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(4) failing after the 31st day after the date on which |
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a felony conviction of a controlling person is final to notify the |
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department in writing of the conviction; |
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(5) failing to cooperate with an investigation, |
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examination, or audit of the license holder's records conducted by |
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the license holder's insurance company or the insurance company's |
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designee, as allowed by the insurance contract or as authorized by |
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law by the Texas Department of Insurance; |
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(6) failing after the 31st day after the effective |
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date of a change in ownership, principal business address, or the |
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address of accounts and records to notify the department and the |
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Texas Department of Insurance of the change; |
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(7) failing to correct any tax filings or payment |
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deficiencies within a reasonable time as determined by the |
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executive director; |
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(8) refusing, after reasonable notice, to meet |
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reasonable health and safety requirements within the license |
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holder's control and made known to the license holder by a federal |
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or state agency; |
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(9) being delinquent in the payment of the license |
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holder's insurance premiums other than those subject to a |
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legitimate dispute; |
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(10) being delinquent in the payment of any employee |
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benefit plan premiums or contributions other than those subject to |
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a legitimate dispute; |
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(11) knowingly making a material misrepresentation to |
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an insurance company or to the department or other governmental |
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agency; |
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(12) failing to maintain the working capital required |
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under Section 91.014; or |
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(13) using professional employer services to avert or |
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avoid an existing collective bargaining agreement. |
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SECTION 5. The changes in law made by this Act apply only to |
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conduct that occurs on or after the effective date of this Act. |
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Conduct that occurs before that date is governed by the law in |
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effect on the date the conduct occurred, and the former law is |
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continued in effect for that purpose. |
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SECTION 6. This Act takes effect September 1, 2025. |