Texas Senate Bill SB1427

Texas 2009 - 81st Regular

• Out of Senate Committee: 4/14/09

Caption

Relating to the regulation of staff leasing services.

Impact

The legislation will impact the operations of staff leasing services by streamlining the licensing process and imposing stricter financial accountability measures. By mandating that staffing companies demonstrate positive working capital, SB1427 is intended to safeguard the interests of workers and clients alike. Compliance with these requirements is expected to improve the credibility of leasing companies and reduce the risks for their clients related to financial instability.

Summary

SB1427 proposes to amend the Labor Code in Texas, specifically focusing on the regulation of staff leasing services. The bill introduces definitions and establishes working capital requirements for staff leasing companies, which will now necessitate a minimum net worth based on the number of assigned employees. This shift aims to ensure that these companies have adequate financial resources to meet their obligations, thus providing greater protection for employees who are leased through such arrangements.

Contention

A point of contention surrounding SB1427 revolves around the implications of the increased regulatory burden on small staff leasing businesses. Proponents argue that heightened standards will weed out companies that may not be financially sound, ultimately benefiting clients and employees. However, critics express concerns that the new requirements could stifle smaller firms unable to meet the enhanced financial thresholds, potentially reducing competition and increasing costs for businesses that rely on such services. As the bill progresses, ongoing discussions will likely examine how these changes will affect the labor market and the availability of staff leasing services.