By: Zaffirini S.B. No. 1254
(In the Senate - Filed February 13, 2025; February 28, 2025,
read first time and referred to Committee on Business & Commerce;
March 31, 2025, reported adversely, with favorable Committee
Substitute by the following vote: Yeas 10, Nays 0; March 31, 2025,
sent to printer.)
Click here to see the committee vote
COMMITTEE SUBSTITUTE FOR S.B. No. 1254 By: Zaffirini
A BILL TO BE ENTITLED
AN ACT
relating to the regulation of professional employer organizations.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 91.001(11), Labor Code, is amended to
read as follows:
(11) "License holder" means a person who holds a
license issued by the department [licensed under this chapter] to
provide professional employer services.
SECTION 2. The heading to Section 91.016, Labor Code, is
amended to read as follows:
Sec. 91.016. LICENSE ISSUANCE; TERM; EFFECT OF
EXPIRATION.
SECTION 3. Section 91.016, Labor Code, is amended by
amending Subsection (b) and adding Subsection (d) to read as
follows:
(b) A license issued or renewed by the department under this
chapter is valid for one year from the date of the issuance or
renewal. The department shall renew a license in accordance with
Subchapter H, Chapter 51, Occupations Code, and the rules adopted
by the department [on receipt of a complete renewal application
form and payment of the license renewal fee].
(d) Notwithstanding any other law, for purposes of this
chapter, if a license holder fails to timely apply for license
renewal, the license holder's status as employer of a covered
employee continues until the expiration of 18 months after the date
the license expires. If the license holder fails to apply for
license renewal before the expiration of the 18th month after the
license expiration date:
(1) the license holder's status as employer of a
covered employee terminates; and
(2) the license holder is subject to disciplinary
action if the license holder engages in or offers professional
employer services at any time while the license is expired.
SECTION 4. Section 91.020, Labor Code, is amended to read as
follows:
Sec. 91.020. GROUNDS FOR DISCIPLINARY ACTION. The
department may take disciplinary action against a person under
Subchapter F, Chapter 51, Occupations Code, regardless of whether
the person holds a license under this chapter, [license holder] on
any of the following grounds:
(1) engaging in professional employer services or
offering to engage in the provision of professional employer
services:
(A) without a license; or
(B) while the person's license is expired,
suspended, or inactive;
(2) transferring or attempting to transfer a license
issued under this chapter;
(3) violating this chapter or any order or rule issued
by the executive director or commission under this chapter;
(4) failing after the 31st day after the date on which
a felony conviction of a controlling person is final to notify the
department in writing of the conviction;
(5) failing to cooperate with an investigation,
examination, or audit of the license holder's records conducted by
the license holder's insurance company or the insurance company's
designee, as allowed by the insurance contract or as authorized by
law by the Texas Department of Insurance;
(6) failing after the 31st day after the effective
date of a change in ownership, principal business address, or the
address of accounts and records to notify the department and the
Texas Department of Insurance of the change;
(7) failing to correct any tax filings or payment
deficiencies within a reasonable time as determined by the
executive director;
(8) refusing, after reasonable notice, to meet
reasonable health and safety requirements within the license
holder's control and made known to the license holder by a federal
or state agency;
(9) being delinquent in the payment of the license
holder's insurance premiums other than those subject to a
legitimate dispute;
(10) being delinquent in the payment of any employee
benefit plan premiums or contributions other than those subject to
a legitimate dispute;
(11) knowingly making a material misrepresentation to
an insurance company or to the department or other governmental
agency;
(12) failing to maintain the working capital required
under Section 91.014; or
(13) using professional employer services to avert or
avoid an existing collective bargaining agreement.
SECTION 5. The changes in law made by this Act apply only to
conduct that occurs on or after the effective date of this Act.
Conduct that occurs before that date is governed by the law in
effect on the date the conduct occurred, and the former law is
continued in effect for that purpose.
SECTION 6. This Act takes effect September 1, 2025.
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