CHAPTER 91. STAFF LEASING SERVICES
LABOR CODE
TITLE 2. PROTECTION OF LABORERS
SUBTITLE E. REGULATION OF CERTAIN OCCUPATIONS
CHAPTER 91. STAFF LEASING SERVICES
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 91.001. DEFINITIONS. In this chapter:
(1) "Applicant" means a business entity applying for a license
or the renewal of a license under this chapter.
(2) "Assigned employee" means an employee under a staff leasing
services arrangement whose work is performed in this state. The
term does not include an employee hired to support or supplement
a client company's work force in a special work situation,
including:
(A) an employee absence;
(B) a temporary skill shortage;
(C) a seasonal workload; or
(D) a special assignment or project.
(2-a) "Assurance organization" means an independent entity
approved by the commission that:
(A) provides a national program of accreditation and financial
assurance for staff leasing services companies;
(B) has documented qualifications, standards, and procedures
acceptable to the department; and
(C) agrees to provide information, compliance monitoring
services, and financial assurance useful to the department in
accomplishing the provisions of this chapter.
(3) "Client company" means a person that contracts with a
license holder and is assigned employees by the license holder
under that contract.
(4) "Commission" means the Texas Commission of Licensing and
Regulation.
(5) Repealed by Acts 2003, 78th Leg., ch. 816, Sec. 14.010(1).
(6) "Common ownership" means a direct or indirect ownership
interest in excess of 33-1/3 percent. The term includes ownership
through subsidiaries or affiliates.
(7) "Controlling person" means an individual who:
(A) possesses direct or indirect control of 25 percent or more
of the voting securities of a corporation that offers or proposes
to offer staff leasing services;
(B) possesses the authority to set policy and direct management
of a company that offers or proposes to offer staff leasing
services;
(C) is employed, appointed, or authorized by a company that
offers or proposes to offer staff leasing services to enter into
a contract with a client company on behalf of the company; or
(D) a person who is an officer or director of a corporation or a
general partner of a partnership that offers or proposes to offer
staff leasing services.
(8) "Department" means the Texas Department of Licensing and
Regulation.
(8-a) "Executive director" means the executive director of the
department.
(9) "Governmental entity" means this state, or an agency,
county, or municipality of this state.
(10) "Independent contractor" means a person who contracts to
perform work or provide a service for the benefit of another and
who:
(A) is paid by the job, not by the hour or some other
time-measured basis;
(B) is free to hire as many helpers as the person desires and to
determine what each helper will be paid; and
(C) is free to work for other contractors, or to send helpers to
work for other contractors, while under contract to the hiring
employer.
(11) "License holder" means a person licensed under this chapter
to provide staff leasing services.
(12) Repealed by Acts 2009, 81st Leg., R.S., Ch. 188, Sec. 6,
eff. September 1, 2009.
(13) "Offer" means a proposal for acceptance or rejection that
is made in such a form that the promises or performance to be
rendered by each party are reasonably certain.
(14) "Staff leasing services" means an arrangement by which
employees of a license holder are assigned to work at a client
company and in which employment responsibilities are in fact
shared by the license holder and the client company, the
employee's assignment is intended to be of a long-term or
continuing nature, rather than temporary or seasonal in nature,
and a majority of the work force at a client company worksite or
a specialized group within that work force consists of assigned
employees of the license holder. The term includes professional
employer organization services. The term does not include:
(A) temporary help;
(B) an independent contractor;
(C) the provision of services that otherwise meet the definition
of "staff leasing services" by one person solely to other persons
who are related to the service provider by common ownership; or
(D) a temporary common worker employer as defined by Chapter 92.
(15) "Staff leasing services company" means a business entity
that offers staff leasing services. The term includes a
professional employer organization.
(16) "Temporary help " means an arrangement by which an
organization hires its own employees and assigns them to a client
to support or supplement the client's work force in a special
work situation, including:
(A) an employee absence;
(B) a temporary skill shortage;
(C) a seasonal workload; or
(D) a special assignment or project.
(17) "Wages" means:
(A) compensation for labor or services rendered by an assigned
employee, whether computed on a time, task, piece, or other
basis; and
(B) vacation pay, holiday pay, sick leave pay, parental leave
pay, severance pay, bonuses, commissions, stock option grants, or
deferred compensation owed to an assigned employee under a
written agreement.
(18) "Working capital" of an applicant means the applicant's
current assets minus the applicant's current liabilities as
determined by generally accepted accounting principles.
Added by Acts 1995, 74th Leg., ch. 76, Sec. 9.20(a), eff. Sept.
1, 1995. Amended by Acts 1997, 75th Leg., ch. 1379, Sec. 1, eff.
Sept. 1, 1997; Acts 1999, 76th Leg., ch. 771, Sec. 1, eff. Sept.
1, 1999; Acts 2003, 78th Leg., ch. 816, Sec. 14.001, 14.010(1),
eff. Sept. 1, 2003; Acts 2003, 78th Leg., ch. 833, Sec. 1, eff.
Sept. 1, 2003.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
188, Sec. 1, eff. September 1, 2009.
Acts 2009, 81st Leg., R.S., Ch.
188, Sec. 6, eff. September 1, 2009.
Sec. 91.002. RULES. (a) The commission shall adopt rules as
necessary to administer this chapter.
(b) Each person who offers staff leasing services is subject to
this chapter and the rules adopted by the commission.
(c) Notwithstanding any other provision of this chapter, nothing
in this chapter preempts the existing statutory or rulemaking
authority of any other state agency or entity to regulate staff
leasing services in a manner consistent with the statutory
authority of that state agency or entity.
Added by Acts 1995, 74th Leg., ch. 76, Sec. 9.20(a), eff. Sept.
1, 1995. Amended by Acts 1997, 75th Leg., ch. 1379, Sec. 2, eff.
Sept. 1, 1997; Acts 1999, 76th Leg., ch. 771, Sec. 2, eff. Sept.
1, 1999; Acts 2003, 78th Leg., ch. 816, Sec. 14.002, eff. Sept.
1, 2003.
Sec. 91.003. INTERAGENCY COOPERATION. (a) Each state agency
that in performing duties under other law affects the regulation
of staff leasing services shall cooperate with the department and
other state agencies as necessary to implement and enforce this
chapter.
(b) In particular, the Texas Workforce Commission, the division
of workers' compensation of the Texas Department of Insurance,
the Department of Assistive and Rehabilitative Services, and the
attorney general's office shall assist in the implementation of
this chapter and shall provide information to the department on
request.
Added by Acts 1995, 74th Leg., ch. 76, Sec. 9.20(a), eff. Sept.
1, 1995. Amended by Acts 1997, 75th Leg., ch. 1379, Sec. 3, eff.
Sept. 1, 1997; Acts 2003, 78th Leg., ch. 816, Sec. 26.016, eff.
Sept. 1, 2003.
Amended by:
Acts 2005, 79th Leg., Ch.
265, Sec. 3.001, eff. September 1, 2005.
Sec. 91.004. EFFECT OF OTHER LAW ON CLIENTS AND EMPLOYEES. (a)
This chapter does not exempt a client of a license holder, or any
assigned employee, from any other license requirements imposed
under local, state, or federal law.
(b) An employee who is licensed, registered, or certified under
law and who is assigned to a client company is considered to be
an employee of the client company for the purpose of that
license, registration, or certification.
(c) A license holder is not engaged in the unauthorized practice
of an occupation, trade, or profession that is licensed,
certified, or otherwise regulated by a governmental entity solely
by entering into a staff leasing agreement with a client company
and assigned employees.
Added by Acts 1995, 74th Leg., ch. 76, Sec. 9.20(a), eff. Sept.
1, 1995. Amended by Acts 1997, 75th Leg., ch. 1379, Sec. 4, eff.
Sept. 1, 1997.
Sec. 91.005. APPLICATION OF CERTAIN PROCUREMENT LAWS. With
respect to a bid, contract, purchase order, or agreement entered
into with the state or a political subdivision of the state, a
client company's status or certification as a small,
minority-owned, disadvantaged, or woman-owned business enterprise
or as a historically underutilized business is not affected
because the client company has entered into an agreement with a
license holder or uses the services of a license holder.
Added by Acts 1999, 76th Leg., ch. 771, Sec. 3, eff. Sept. 1,
1999.
Sec. 91.006. WORKERS' COMPENSATION COVERAGE. (a) A certificate
of insurance coverage showing that a license holder maintains a
policy of workers' compensation insurance constitutes proof of
workers' compensation insurance coverage for the license holder
and the client company with respect to all employees of the
license holder assigned to the client company. The state and a
political subdivision of the state shall accept a certificate of
insurance coverage described by this section as proof of workers'
compensation coverage under Chapter 406.
(b) For a client company that has employees who are not assigned
employees under a staff leasing services agreement, the state or
a political subdivision of the state may require the client
company to furnish separate proof of workers' compensation
insurance coverage for those employees.
Added by Acts 1999, 76th Leg., ch. 771, Sec. 3, eff. Sept. 1,
1999.
Sec. 91.007. APPLICATION OF LABOR RELATIONS LAWS. This chapter
does not relieve a client company of a right, obligation, or duty
under:
(1) Chapter 101;
(2) the federal National Labor Relations Act (29 U.S.C. Section
151 et seq.);
(3) the federal Railway Labor Act (45 U.S.C. Section 151 et
seq.); or
(4) any other law governing labor relations.
Added by Acts 1999, 76th Leg., ch. 771, Sec. 3, eff. Sept. 1,
1999.
Sec. 91.008. APPLICABILITY OF CONTINUING EDUCATION LAW. Section
51.405, Occupations Code, does not apply to this chapter.
Added by Acts 2003, 78th Leg., ch. 816, Sec. 14.003, eff. Sept.
1, 2003.
SUBCHAPTER B. LICENSE REQUIREMENTS
Sec. 91.011. LICENSE REQUIRED. A person may not engage in or
offer staff leasing services in this state unless the person
holds a license issued under this chapter.
Added by Acts 1995, 74th Leg., ch. 76, Sec. 9.20(a), eff. Sept.
1, 1995.
Sec. 91.012. GENERAL LICENSE REQUIREMENTS. To be qualified to
serve as a controlling person of a license holder under this
chapter, that person must be at least 18 years of age and have
educational, managerial, or business experience relevant to:
(1) operation of a business entity offering staff leasing
services; or
(2) service as a controlling person of a staff leasing services
company.
Added by Acts 1995, 74th Leg., ch. 76, Sec. 9.20(a), eff. Sept.
1, 1995. Amended by Acts 1997, 75th Leg., ch. 1379, Sec. 5, eff.
Sept. 1, 1997.
Sec. 91.013. BACKGROUND INVESTIGATIONS. (a) On receipt of an
original application for a license, the department shall conduct
a thorough background investigation of each individual applicant
and of each controlling person of each applicant to determine
whether that applicant or controlling person is qualified under
this chapter. The department may deny an application for the
issuance of a license if the department finds that an applicant
or a controlling person is not qualified under this chapter. The
investigation must include:
(1) the submission of fingerprints for processing through
appropriate local, state, and federal law enforcement agencies;
and
(2) examination by the department of police or other law
enforcement records maintained by local, state, or federal law
enforcement agencies.
(b) Department background investigations are governed by this
chapter, Section 411.122, Government Code, and Chapter 53,
Occupations Code. Conviction of a crime does not automatically
disqualify a controlling person, require the revocation of a
license, or require the denial of an application for a new or
renewed license. The department shall consider criminal
convictions as provided by Section 411.122, Government Code, and
Chapter 53, Occupations Code.
Added by Acts 1995, 74th Leg., ch. 76, Sec. 9.20(a), eff. Sept.
1, 1995. Amended by Acts 1997, 75th Leg., ch. 1379, Sec. 6, eff.
Sept. 1, 1997; Acts 2001, 77th Leg., ch. 1420, Sec. 14.815, eff.
Sept. 1, 2001.
Text of section effective until December 31, 2011
Sec. 91.014. NET WORTH REQUIREMENTS. (a) An applicant for an
original or renewal license must demonstrate a net worth as
follows:
(1) $50,000 if the applicant employs fewer than 250 assigned
employees;
(2) $75,000 if the applicant employs at least 250 but not more
than 750 assigned employees; and
(3) $100,000 if the applicant employs more than 750 assigned
employees.
(b) The applicant may demonstrate the applicant's net worth to
the department by providing the department with the applicant's
financial statement or a copy of the applicant's most recent
federal tax return. The applicant may also satisfy the net worth
requirement through guarantees, letters of credit, a bond in an
amount that demonstrates compliance with the requirements of
Subsection (a), or other security acceptable to the department. A
guaranty is not acceptable to satisfy this subsection unless the
applicant submits sufficient evidence to satisfy the department
that the guarantor has adequate resources to satisfy the
obligations of the guaranty.
(c) In computing net worth, an applicant shall include adequate
reserves for all taxes and insurance, including reserves for
claims incurred but not paid and for claims incurred but not
reported under plans of self-insurance for health benefits. The
computation of net worth by an applicant is to be made according
to Section 448, Internal Revenue Code (26 U.S.C. Section 448).
(d) A document submitted to establish net worth must show the
net worth on a date not earlier than nine months before the date
on which the application is submitted. A document submitted to
establish net worth must be prepared or certified by an
independent certified public accountant. Information submitted to
or maintained by the department is subject to Chapter 552,
Government Code, other than information related to:
(1) identification of client companies;
(2) net worth;
(3) financial statements; or
(4) federal tax returns.
Added by Acts 1995, 74th Leg., ch. 76, Sec. 9.20(a), eff. Sept.
1, 1995. Amended by Acts 1997, 75th Leg., ch. 1379, Sec. 7, eff.
Sept. 1, 1997.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
188, Sec. 2, eff. December 31, 2011.
Text of section effective on December 31, 2011
Sec. 91.014. WORKING CAPITAL REQUIREMENTS. (a) An applicant
for an original or renewal license must demonstrate positive
working capital in the following amounts:
(1) $50,000 if the applicant employs fewer than 250 assigned
employees;
(2) $75,000 if the applicant employs at least 250 but not more
than 750 assigned employees; and
(3) $100,000 if the applicant employs more than 750 assigned
employees.
(b) The applicant shall demonstrate the applicant's working
capital to the department by providing the department with the
applicant's financial statement. The financial statement must be
prepared in accordance with generally accepted accounting
principles, be audited by an independent certified public
accountant, and be without qualification as to the going concern
status of the applicant. An applicant that has not had
sufficient operating history to have audited financial statements
based on at least 12 months of operations must meet the financial
capacity requirements required by Subsection (a) and provide the
department with financial statements that have been reviewed by a
certified public accountant.The applicant may satisfy any
deficiencies in the working capital requirement through
guarantees, letters of credit, a bond in an amount that
demonstrates compliance with the amounts required under
Subsection (a), or other security acceptable to the department.
A guaranty is not acceptable to satisfy this subsection unless
the applicant submits sufficient evidence to satisfy the
department that the guarantor has adequate resources to satisfy
the obligations of the guaranty.
(c) Information submitted to or maintained by the department is
subject to Chapter 552, Government Code, other than information
related to:
(1) identification of client companies;
(2) working capital;
(3) financial statements; or
(4) federal tax returns.
Added by Acts 1995, 74th Leg., ch. 76, Sec. 9.20(a), eff. Sept.
1, 1995. Amended by Acts 1997, 75th Leg., ch. 1379, Sec. 7, eff.
Sept. 1, 1997.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
188, Sec. 2, eff. December 31, 2011.
Sec. 91.015. LICENSE APPLICATION. (a) To receive a staff
leasing services company original license, a person shall file
with the department a written application accompanied by the
application fee.
(b) The department shall require an applicant for a license to
provide information necessary to determine that the applicant
meets the licensing requirements of this chapter. The department
shall also require the applicant to provide information necessary
to determine whether individuals affiliated with the applicant
are qualified to serve as controlling persons.
(c) Before denying a license application, the department shall
provide written notice to an applicant specifying the reasons for
the denial. The department shall provide the applicant at least
30 days after the date of the notice to address the reasons for
the denial. For good cause and on a showing of a good faith
effort to remedy the reasons for the denial, the executive
director may grant an additional 30 days to remedy the reasons
for denial.
(d) Removal, demotion, or discharge of a controlling person in
response to notice from the department of the alleged
unsuitability of that controlling person is an affirmative
defense to any claim by that individual based on the removal,
demotion, or discharge.
(e) A controlling person who has been evaluated by the
department under this chapter is not required to be reevaluated
if that person changes the person's affiliation or employment
from one applicant or license holder to another applicant or
license holder.
(f) Following denial or revocation of a license, and prior to
issuing a new license or reinstating a license, the department
shall consider:
(1) the extent to which the applicant or license holder has
adequately corrected any problems; and
(2) whether the applicant or license holder has demonstrated
that the applicant or license holder had exercised due diligence
to avoid the reason or reasons for the denial or revocation.
The applicant or license holder shall bear the burden of proof
with respect to Subdivisions (1) and (2).
Added by Acts 1995, 74th Leg., ch. 76, Sec. 9.20(a), eff. Sept.
1, 1995. Amended by Acts 1997, 75th Leg., ch. 1379, Sec. 8, eff.
Sept. 1, 1997; Acts 1999, 76th Leg., ch. 771, Sec. 4, eff. Sept.
1, 1999; Acts 2003, 78th Leg., ch. 816, Sec. 26.017, eff. Sept.
1, 2003.
Sec. 91.016. LICENSE ISSUANCE; TERM. (a) The department shall
issue a license to an applicant who the department determines has
met the requirements of this chapter. The department shall notify
an applicant of any deficiency in the application not later than
the 30th day after the date on which the department receives the
application forms. The department shall issue the license not
later than the 90th day after the date on which the completed
application is filed with the department.
(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 on receipt of a
complete renewal application form and payment of the license
renewal fee.
(c) Each applicant or license holder shall disclose to the
department the addition of a new controlling person not later
than the 45th day after the date on which the person assumes the
duties of a controlling person. That person may serve as a
controlling person while the department is conducting any
necessary investigation. If the department determines not to
approve the new controlling person, the department shall notify
the applicant or license holder and that controlling person at
least 20 days before taking action against the applicant or
license holder.
Added by Acts 1995, 74th Leg., ch. 76, Sec. 9.20(a), eff. Sept.
1, 1995. Amended by Acts 1997, 75th Leg., ch. 1379, Sec. 9, eff.
Sept. 1, 1997; Acts 2003, 78th Leg., ch. 816, Sec. 14.004, eff.
Sept. 1, 2003.
Sec. 91.017. FEES. (a) Each applicant for an original or
renewal staff leasing services company license shall pay to the
department before the issuance of the license or license renewal
a fee set by the commission by rule.
(b) The commission is authorized to charge reasonable fees for
license applications and renewals, investigations, inspections,
and any other administrative or enforcement responsibilities
created under this chapter.
(c) Fees collected by the department under this chapter shall be
used to implement this chapter.
Added by Acts 1995, 74th Leg., ch. 76, Sec. 9.20(a), eff. Sept.
1, 1995. Amended by Acts 1997, 75th Leg., ch. 1379, Sec. 10, eff.
Sept. 1, 1997; Acts 2003, 78th Leg., ch. 816, Sec. 14.005, eff.
Sept. 1, 2003.
Sec. 91.018. LICENSE NOT ASSIGNABLE; CHANGE OF NAME OR LOCATION.
(a) A license holder may not conduct business under any name
other than that specified in the license. A license issued under
this chapter is not assignable. A license holder may not conduct
business under any fictitious or assumed name without prior
written authorization from the department. The department may not
authorize the use of a name that is so similar to that of a
public office or agency or to that of another license holder that
the public may be confused or misled by the name's use. A license
holder may not conduct business under more than one name unless
the license holder has obtained a separate license for each name.
(b) A license holder may change the license holder's licensed
name at any time by notifying the department and paying a fee for
each change of name. The commission by rule shall set the fee for
a name change. A license holder may change the license holder's
name on renewal of the license without the payment of the name
change fee.
(c) A license holder must notify the department in writing of:
(1) any change in the location of the license holder's primary
business office;
(2) the addition of more business offices; or
(3) a change in the location of business records maintained by
the license holder.
(d) A license holder may amend the name specified in its license
to add a trade name, trademark, service mark, or parent company
name. An amendment made under this subsection must comply with
the requirements imposed under Subsection (a). The department may
charge a fee for processing of such an amendment.
(e) A license holder offering staff leasing services in more
than one state may advertise in this state using the name of its
parent company or under a trade name, trademark, or service mark.
The trade name, trademark, service mark, or parent company name
must be listed on the license in addition to the licensed name
used by the license holder in this state.
(f) Each written proposal provided to a prospective client
company and each contract between a license holder and a client
company or assigned employee shall clearly identify the name of
the license holder. A proposal or contract may also identify the
trade name, trademark, service mark, or parent company name of
the license holder. A license holder may use written materials
including forms, benefit information, letterhead, and business
cards that bear only the trade name, trademark, service mark, or
parent company name of the license holder.
Added by Acts 1995, 74th Leg., ch. 76, Sec. 9.20(a), eff. Sept.
1, 1995. Amended by Acts 1997, 75th Leg., ch. 1379, Sec. 11, eff.
Sept. 1, 1997; Acts 2003, 78th Leg., ch. 816, Sec. 14.006, eff.
Sept. 1, 2003.
Sec. 91.019. LIMITED LICENSE. (a) The commission by rule shall
provide for the issuance of a limited license to a person who
seeks to offer limited staff leasing services in this state.
(b) For purposes of this section, a staff leasing services
company is considered to be offering limited staff leasing
services if the staff leasing services company:
(1) employs fewer than 50 assigned employees in this state at
any one time;
(2) does not provide assigned employees to a client company
based or domiciled in this state; and
(3) does not maintain an office in this state or solicit client
companies located or domiciled in this state.
(c) A staff leasing services company that offers limited staff
leasing services shall complete the application forms and pay the
fees for a limited license as prescribed by the department. A
limited license is valid for one year from the date of issuance
and may be renewed annually on submission of a renewal
application and payment of the required fees.
(d) The department may use information obtained from regulatory
agencies in other states in evaluating an applicant for a limited
license.
Added by Acts 1995, 74th Leg., ch. 76, Sec. 9.20(a), eff. Sept.
1, 1995. Amended by Acts 1997, 75th Leg., ch. 1379, Sec. 12, eff.
Sept. 1, 1997; Acts 1999, 76th Leg., ch. 771, Sec. 5, eff. Sept.
1, 1999; Acts 2003, 78th Leg., ch. 816, Sec. 14.007, eff. Sept.
1, 2003.
Sec. 91.020. GROUNDS FOR DISCIPLINARY ACTION. The department
may take disciplinary action against a license holder on any of
the following grounds:
(1) engaging in staff leasing services or offering to engage in
the provision of staff leasing services without a license;
(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 staff leasing services to avert or avoid an existing
collective bargaining agreement.
Added by Acts 1995, 74th Leg., ch. 76, Sec. 9.20(a), eff. Sept.
1, 1995. Amended by Acts 1997, 75th Leg., ch. 1379, Sec. 13, eff.
Sept. 1, 1997; Acts 2003, 78th Leg., ch. 816, Sec. 14.008, eff.
Sept. 1, 2003.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
188, Sec. 3, eff. September 1, 2009.
Sec. 91.021. ELECTRONIC FILING AND COMPLIANCE. (a) The
commission may adopt rules to permit the acceptance of electronic
filings under this chapter, including the filing of applications,
documents, reports, and other documents required by this chapter.
The rules may provide for the acceptance of electronic filing
and other assurance by an assurance organization, qualified and
approved by the commission, that provides satisfactory assurance
and documentation of compliance acceptable to the department that
meets or exceeds the requirements of this chapter.
(b) A staff leasing services company may authorize an assurance
organization that is qualified and approved by the commission to
act on its behalf in complying with the licensing requirements of
this chapter, including the electronic filing of information and
the payment of application and licensing fees. Use of an
assurance organization is optional and is not mandatory for a
staff leasing services company.
(c) Nothing in this section may be construed to change or affect
the department's authority to issue licenses, revoke licenses,
conduct investigations, or enforce any provision of this chapter.
Added by Acts 2009, 81st Leg., R.S., Ch.
188, Sec. 4, eff. September 1, 2009.
SUBCHAPTER C. STAFF LEASING SERVICES AGREEMENT
Sec. 91.031. AGREEMENT; NOTICE. (a) A license holder shall
establish the terms of a staff leasing services agreement by a
written contract between the license holder and the client
company.
(b) The license holder shall give written notice of the
agreement as it affects assigned employees to each employee
assigned to a client company worksite.
(c) The written notice required by Subsection (b) must be given
to each assigned employee not later than the first payday after
the date on which that individual becomes an assigned employee.
Added by Acts 1995, 74th Leg., ch. 76, Sec. 9.20(a), eff. Sept.
1, 1995. Amended by Acts 1997, 75th Leg., ch. 1379, Sec. 15, eff.
Sept. 1, 1997.
Sec. 91.032. CONTRACT REQUIREMENTS. (a) A contract between a
license holder and a client company must provide that the license
holder:
(1) shares, as provided by Subsection (b), with the client
company the right of direction and control over employees
assigned to a client's worksites;
(2) assumes responsibility for the payment of wages to the
assigned employees without regard to payments by the client to
the license holder;
(3) assumes responsibility for the payment of payroll taxes and
collection of taxes from payroll on assigned employees;
(4) shares, as provided by Subsection (b), with the client
company the right to hire, fire, discipline, and reassign the
assigned employees; and
(5) shares, as provided by Subsection (b), with the client
company the right of direction and control over the adoption of
employment and safety policies and the management of workers'
compensation claims, claim filings, and related procedures.
(b) Notwithstanding any other provision of this chapter, a
client company retains responsibility for:
(1) the direction and control of assigned employees as necessary
to conduct the client company's business, discharge any
applicable fiduciary duty, or comply with any licensure,
regulatory, or statutory requirement;
(2) goods and services produced by the client company; and
(3) the acts, errors, and omissions of assigned employees
committed within the scope of the client company's business.
(c) Notwithstanding Subsection (a)(2), a client company is
solely obligated to pay any wages for which:
(1) obligation to pay is created by an agreement, contract,
plan, or policy between the client company and the assigned
employee; and
(2) the staff leasing services company has not contracted to
pay.
(d) Each staff leasing services company shall disclose the
requirements of Subsection (c) in writing to each assigned
employee.
Added by Acts 1995, 74th Leg., ch. 76, Sec. 9.20(a), eff. Sept.
1, 1995. Amended by Acts 1999, 76th Leg., ch. 771, Sec. 7, eff.
Sept. 1, 1999; Acts 2003, 78th Leg., ch. 833, Sec. 2, eff. Sept.
1, 2003.
SUBCHAPTER D. POWERS AND DUTIES OF LICENSE HOLDER
Sec. 91.041. EMPLOYEE BENEFIT PLANS; REQUIRED DISCLOSURE; OTHER
REPORTS. (a) A license holder may sponsor and maintain employee
benefit plans for the benefit of assigned employees. A client
company may include assigned employees in any benefit plan
sponsored by the client company.
(b) With respect to any insurance or benefit plan provided by a
license holder for the benefit of its assigned employees, a
license holder shall disclose the following information to the
department, each client company, and its assigned employees:
(1) the type of coverage;
(2) the identity of each insurer for each type of coverage;
(3) the amount of benefits provided for each type of coverage
and to whom or in whose behalf benefits are to be paid;
(4) the policy limits on each insurance policy; and
(5) whether the coverage is fully insured, partially insured, or
fully self-funded.
(c) The commission by rule may require a license holder to file
other reports that are reasonably necessary for the
implementation of this chapter.
Added by Acts 1995, 74th Leg., ch. 76, Sec. 9.20(a), eff. Sept.
1, 1995. Amended by Acts 1997, 75th Leg., ch. 1379, Sec. 16, eff.
Sept. 1, 1997; Acts 2003, 78th Leg., ch. 816, Sec. 14.009, eff.
Sept. 1, 2003.
Sec. 91.042. WORKERS' COMPENSATION INSURANCE. (a) A license
holder may elect to obtain workers' compensation insurance
coverage for the license holder's assigned employees through an
insurance company as defined under Section 401.011(28) or through
self-insurance as provided under Chapter 407.
(b) If a license holder maintains workers' compensation
insurance, the license holder shall pay workers' compensation
insurance premiums based on the experience rating of the client
company for the first two years the client company has a contract
with the license holder and as further provided by rule by the
Texas Department of Insurance.
(c) For workers' compensation insurance purposes, a license
holder and the license holder's client company shall be
coemployers. If a license holder elects to obtain workers'
compensation insurance, the client company and the license holder
are subject to Sections 406.034 and 408.001.
(d) If a license holder does not elect to obtain workers'
compensation insurance, both the license holder and the client
company are subject to Sections 406.004 and 406.033.
(e) After the expiration of the two-year period under Subsection
(b), if the client company obtains a new workers' compensation
insurance policy in the company's own name or adds the company's
former assigned workers to an existing policy, the premium for
the workers' compensation insurance policy of the company shall
be based on the lower of:
(1) the experience modifier of the company before entering into
the staff leasing arrangement; or
(2) the experience modifier of the license holder at the time
the staff leasing arrangement terminated.
(f) On request, the Texas Department of Insurance shall provide
the necessary computations to the prospective workers'
compensation insurer of the client company to comply with
Subsection (e).
Added by Acts 1995, 74th Leg., ch. 76, Sec. 9.20(a), eff. Sept.
1, 1995.
Sec. 91.043. HEALTH BENEFIT PLANS. (a) A license holder may
not sponsor a plan of self-insurance for health benefits except
as permitted by the Employee Retirement Income Security Act of
1974 (29 U.S.C. Section 1001 et seq.).
(b) For purposes of this section, a "plan of self-insurance"
includes any arrangement except an arrangement under which an
insurance carrier authorized to do business in this state has
issued an insurance policy that covers all of the obligations of
the health benefits plan.
Added by Acts 1995, 74th Leg., ch. 76, Sec. 9.20(a), eff. Sept.
1, 1995.
Sec. 91.044. UNEMPLOYMENT TAXES; PAYROLL. (a) A license holder
is the employer of an assigned employee for purposes of Subtitle
A, Title 4, and, except for wages subject to Section 91.032(c),
for purposes of Chapter 61. In addition to any other reports
required to be filed by law, a license holder shall report
quarterly to the Texas Workforce Commission on a form prescribed
by the Texas Workforce Commission the name, address, telephone
number, federal income tax identification number, and
classification code as described in the "Standard Industrial
Classification Manual" published by the United States Office of
Management and Budget of each client company.
(b) For purposes of Subtitle A, Title 4, in the event of the
termination of a contract between a license holder and a client
company or the failure by a staff leasing entity to submit
reports or make tax payments as required by that subtitle, the
contracting client company shall be treated as a new employer
without a previous experience record unless that client company
is otherwise eligible for an experience rating.
Added by Acts 1995, 74th Leg., ch. 76, Sec. 9.20(a), eff. Sept.
1, 1995. Amended by Acts 1997, 75th Leg., ch. 1379, Sec. 17, eff.
Sept. 1, 1997; Acts 2003, 78th Leg., ch. 833, Sec. 3, eff. Sept.
1, 2003.
Sec. 91.045. POSTING REQUIREMENTS. (a) Each license holder
shall post in a conspicuous place in the license holder's
principal place of business in this state the license issued
under this chapter.
(b) Each license holder shall display, in a place that is in
clear and unobstructed public view, a notice stating that the
business operated at the location is licensed and regulated by
the department and that any questions or complaints should be
directed to the department.
Added by Acts 1995, 74th Leg., ch. 76, Sec. 9.20(a), eff. Sept.
1, 1995.
Sec. 91.046. CONTRACTUAL DUTIES. Each license holder is
responsible for the license holder's contractual duties and
responsibilities to manage, maintain, collect, and make timely
payments for:
(1) insurance premiums;
(2) benefit and welfare plans;
(3) other employee withholding; and
(4) any other expressed responsibility within the scope of the
contract for fulfilling the duties imposed under this section and
Sections 91.032, 91.047, and 91.048.
Added by Acts 1995, 74th Leg., ch. 76, Sec. 9.20(a), eff. Sept.
1, 1995.
Sec. 91.047. COMPLIANCE WITH OTHER LAWS. Each license holder
shall comply with all appropriate state and federal laws relating
to reporting, sponsoring, filing, and maintaining benefit and
welfare plans.
Added by Acts 1995, 74th Leg., ch. 76, Sec. 9.20(a), eff. Sept.
1, 1995.
Sec. 91.048. REQUIRED INFORMATION. Each license holder shall:
(1) maintain adequate books and records regarding the license
holder's duties and responsibilities;
(2) maintain and make available at all times to the executive
director the following information, which shall be treated as
proprietary and confidential and is exempt from disclosure to
persons other than other governmental agencies having a
reasonable, legitimate purpose for obtaining the information:
(A) the correct name, address, and telephone number of each
client company;
(B) each client company contract; and
(C) a listing by classification code as described in the
"Standard Industrial Classification Manual" published by the
United States Office of Management and Budget, of each client
company;
(3) notify the department of any addition or deletion of a
controlling person as listed on the license application or
renewal form by providing the name of the person not later than
the 45th day after the date on which the person is added or
deleted as a controlling person; and
(4) provide a biographical history to the department in
connection with the addition of a new controlling person.
Added by Acts 1995, 74th Leg., ch. 76, Sec. 9.20(a), eff. Sept.
1, 1995. Amended by Acts 1997, 75th Leg., ch. 1379, Sec. 18, eff.
Sept. 1, 1997; Acts 2003, 78th Leg., ch. 816, Sec. 26.018, eff.
Sept. 1, 2003.
Sec. 91.049. AGENT FOR SERVICE OF PROCESS. Each license holder
shall maintain a registered agent for the service of process in
this state.
Added by Acts 1995, 74th Leg., ch. 76, Sec. 9.20(a), eff. Sept.
1, 1995.
Sec. 91.050. TAX CREDITS AND OTHER INCENTIVES. (a) For the
purpose of determining tax credits, grants, and other economic
incentives provided by this state or other governmental entities
that are based on employment, assigned employees are considered
employees of the client and the client is solely entitled to the
benefit of any tax credit, economic incentive, or other benefit
arising from the employment of assigned employees of the client.
This subsection applies even if the staff leasing services
company is the reporting employer for federal income tax
purposes.
(b) If a grant or the amount of any incentive described by
Subsection (a) is based on the number of employees, each client
shall be treated as employing only those assigned employees
co-employed by the client. Assigned employees working for other
clients of the staff leasing services company may not be included
in the computation.
(c) Each staff leasing services company shall provide, on the
request of a client or an agency of this state, employment
information reasonably required by the state agency responsible
for the administration of any tax credit or economic incentive
described by Subsection (a) and necessary to support a request,
claim, application, or other action by a client seeking the tax
credit or economic incentive.
Added by Acts 2009, 81st Leg., R.S., Ch.
188, Sec. 5, eff. September 1, 2009.
SUBCHAPTER E. PROHIBITED ACTS; PENALTY
Sec. 91.061. PROHIBITED ACTS. A person may not:
(1) engage in or offer staff leasing services without holding a
license under this chapter as a staff leasing services company;
(2) use the name or title "staff leasing company," "employee
leasing company," "licensed staff leasing company," "staff
leasing services company," "professional employer organization,"
or "administrative employer" or otherwise represent that the
entity is licensed under this chapter unless the entity holds a
license issued under this chapter;
(3) represent as the person's own the license of another person
or represent that a person is licensed if the person does not
hold a license;
(4) give materially false or forged evidence to the department
in connection with obtaining or renewing a license or in
connection with disciplinary proceedings under this chapter; or
(5) use or attempt to use a license that has expired or been
revoked.
Added by Acts 1995, 74th Leg., ch. 76, Sec. 9.20(a), eff. Sept.
1, 1995. Amended by Acts 1997, 75th Leg., ch. 1379, Sec. 19, eff.
Sept. 1, 1997.
Sec. 91.062. ACTION BY ATTORNEY GENERAL. (a) The executive
director may notify the attorney general of a violation of this
chapter. The attorney general may apply to a district court in
Travis County for permission to file for quo warranto relief,
injunctive relief, or both.
(b) The attorney general may not be required to post a bond for
injunctive relief under this section.
Added by Acts 1995, 74th Leg., ch. 76, Sec. 9.20(a), eff. Sept.
1, 1995. Amended by Acts 2003, 78th Leg., ch. 816, Sec. 26.019,
eff. Sept. 1, 2003.
Sec. 91.063. CRIMINAL PENALTY. (a) A person who violates
Section 91.061 commits an offense.
(b) An offense under this section is a Class A misdemeanor.
Added by Acts 1995, 74th Leg., ch. 76, Sec. 9.20(a), eff. Sept.
1, 1995.