CHAPTER 2501. PERSONNEL SERVICES
OCCUPATIONS CODE
TITLE 15. OCCUPATIONS RELATED TO EMPLOYMENT
CHAPTER 2501. PERSONNEL SERVICES
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 2501.001. DEFINITIONS. In this chapter:
(1) "Applicant" means a person who:
(A) engages the services of a personnel service to secure
employment; or
(B) is placed with an employer by a personnel service.
(2) "Commission" means the Texas Commission of Licensing and
Regulation.
(3) "Counselor" means a person who:
(A) interviews and refers an applicant to a prospective
employer; or
(B) solicits job orders from an employer.
(3-a) "Department" means the Texas Department of Licensing and
Regulation.
(4) "Employer" means a person who employs or seeks to employ an
employee.
(4-a) "Executive director" means the executive director of the
department.
(5) "Fee" means anything of value, including valuable
consideration or a service or the promise of valuable
consideration or a service, directly or indirectly received by a
personnel service as payment from a person seeking employment.
(6) "Job order" means a verbal or written notice of a job
opening from an employer.
(7) "Owner" means a person who possesses a proprietary interest
in a personnel service.
(8) "Person" means an individual, partnership, association,
corporation, legal representative, trustee in bankruptcy, or
receiver.
(9) "Personnel service" means a person who, regardless of
whether for a fee, directly or indirectly offers or attempts to
obtain permanent employment for an applicant or obtains or
attempts to obtain a permanent employee for an employer. The term
does not include a newspaper of general circulation or other
publication that primarily communicates information, other than
information relating to employment positions, and that does not
claim to adapt the information provided to the needs or desires
of an individual applicant. The term includes a person who offers
the facilities of or advertises as:
(A) an executive search or consulting service;
(B) an out-placement service;
(C) an overseas placement service;
(D) a job listing service;
(E) a personnel consulting service; or
(F) a resume service that provides job market investigation,
research, or evaluation.
(10) "Service file" means a job order, resume, application,
workpaper, or other record containing information relating to:
(A) an applicant;
(B) an employer;
(C) an employment position; or
(D) the operation of a personnel service.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 6, eff. June 1,
2003. Amended by Acts 2003, 78th Leg., ch. 816, Sec. 11.001, eff.
Sept. 1, 2003.
Sec. 2501.002. EXCEPTION. This chapter does not apply to:
(1) a personnel service operated by the United States, this
state, or a municipality of this state;
(2) a personnel service operated by a person who does not assess
a fee if the personnel service is operated in conjunction with
the person's own business exclusively to employ help for that
business;
(3) a labor union; or
(4) a professional counselor licensed under Chapter 503.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 6, eff. June 1,
2003.
SUBCHAPTER B. CERTIFICATE OF AUTHORITY
Sec. 2501.051. CERTIFICATE REQUIRED. A person may not own a
personnel service that operates in this state unless the person
holds a certificate of authority issued under this chapter.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 6, eff. June 1,
2003.
Sec. 2501.052. MANAGEMENT SEARCH CONSULTANTS. (a) In this
section, "management search consultant" means a personnel service
that:
(1) is retained by, acts solely on behalf of, and is compensated
only by an employer; and
(2) does not directly or indirectly collect a fee from an
applicant as payment for a service performed by the personnel
service.
(b) This subchapter does not apply to a management search
consultant.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 6, eff. June 1,
2003.
Sec. 2501.053. NOTICE. (a) Not later than the 30th day before
the date a personnel service begins operating in this state, the
owner of the service must file notice with the executive
director.
(b) The notice must include:
(1) the address of each location at which the personnel service
is to operate its business on a daily basis;
(2) the assumed name, if any, under which the personnel service
will operate;
(3) the name and residence address of each owner; and
(4) a statement that each owner has read and is familiar with
this chapter.
(c) The notice must be signed and sworn to by the owner before a
notary public or other officer authorized to administer oaths.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 6, eff. June 1,
2003. Amended by Acts 2003, 78th Leg., ch. 816, Sec. 26.070, eff.
Sept. 1, 2003; Acts 2003, 78th Leg., ch. 1276, Sec. 14A.702, eff.
Sept. 1, 2003.
Sec. 2501.054. SECURITY REQUIRED. (a) An owner who files a
notice under Section 2501.053 shall file with the notice a bond
in the amount of $5,000 that is:
(1) executed with a good and sufficient surety;
(2) payable to the state; and
(3) conditioned that the obligor will not violate this chapter.
(b) In lieu of a bond under Subsection (a), the owner may
deposit $5,000 in cash.
(c) A bond filed under Subsection (a) must state that a person
aggrieved by a violation of this chapter by the principal or an
agent or representative of the principal is entitled to bring an
action on the bond.
(d) An owner of a personnel service may satisfy the requirements
of this section by filing one bond for the personnel service,
regardless of the number of locations at which the personnel
service is to operate its business on a daily basis.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 6, eff. June 1,
2003.
Sec. 2501.055. ISSUANCE OF CERTIFICATE; TERM. (a) On receipt
of a notice filed under Section 2501.053, the executive director
shall issue to the owner a certificate of authority to do
business as a personnel service not later than the 15th day after
the date the notice is filed if the owner:
(1) pays the filing fee required for the certificate; and
(2) complies with the requirements of Section 2501.054.
(b) A certificate of authority is valid for the period set by
the Texas Commission of Licensing and Regulation.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 6, eff. June 1,
2003. Amended by Acts 2003, 78th Leg., ch. 816, Sec. 26.071, eff.
Sept. 1, 2003; Acts 2003, 78th Leg., ch. 1276, Sec. 14A.703, eff.
Sept. 1, 2003.
Sec. 2501.056. DISPLAY OF CERTIFICATE. An owner shall display a
certificate of authority issued under this chapter in a prominent
place in each location at which the personnel service operates
its business on a daily basis.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 6, eff. June 1,
2003.
Sec. 2501.057. RENEWAL OF CERTIFICATE. The executive director
shall issue a renewal of a certificate of authority on the
receipt of:
(1) a renewal notice from the owner that contains the
information required by Section 2501.053;
(2) a renewal fee; and
(3) security that complies with Section 2501.054.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 6, eff. June 1,
2003. Amended by Acts 2003, 78th Leg., ch. 816, Sec. 26.072, eff.
Sept. 1, 2003; Acts 2003, 78th Leg., ch. 1276, Sec. 14A.704, eff.
Sept. 1, 2003.
SUBCHAPTER C. PROHIBITED PRACTICES
Sec. 2501.101. PROHIBITED PRACTICES. (a) An owner, operator,
counselor, agent, or employee of a personnel service may not:
(1) share or attempt to share a fee paid by a person seeking
employment or an employer with an employer or an agent or
employee of an employer or another person provided services by
the personnel service;
(2) make or cause to be made a false promise, misrepresentation,
or misleading statement or give or cause to be given misleading
information to an applicant;
(3) refer an applicant to an employer unless the personnel
service has a job order for the referral;
(4) advertise a position unless the personnel service has a job
order verifiable by the employer;
(5) procure or attempt to procure the discharge of a person from
the person's current employment;
(6) induce, solicit, or attempt to induce or solicit an employee
to terminate current employment in order to obtain new employment
if the current employment was obtained through that personnel
service or a personnel service that has a common ownership with
that personnel service unless the employee initiates the new
contact;
(7) deliver, disclose, distribute, or otherwise communicate to
or receive from a person a service file or information contained
in a service file, except as authorized by the personnel service
that owns the file;
(8) advertise in any medium, including a newspaper, trade
publication, billboard, radio, television, card, printed notice,
circular, contract, letterhead, or any other material made for
public distribution, except an envelope, without clearly stating
that the advertisement is by a firm providing a private personnel
service;
(9) refer an applicant to a place where the personnel service
has knowledge of the existence of a strike or lockout unless the
personnel service informs the applicant in writing of the strike
or lockout before the referral is made; or
(10) refer an applicant to employment harmful to the applicant's
health or morals if the personnel service has knowledge of the
harmful condition.
(b) An employer or a person seeking employment may not:
(1) make a false statement or conceal any material fact to
obtain an employee or employment by or through a personnel
service; or
(2) share or attempt to share with a person subject to this
chapter a fee paid or another payment made for the services of a
personnel service.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 6, eff. June 1,
2003.
Sec. 2501.102. IMPOSITION OF FEE PROHIBITED BEFORE EMPLOYMENT
OFFER ACCEPTED. Notwithstanding any refund policy, an owner,
operator, counselor, agent, or employee of a personnel service
may not impose a fee on an applicant until the applicant accepts
an offer of employment resulting from an employment referral made
by the personnel service.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 6, eff. June 1,
2003.
Sec. 2501.103. CHARGING OF FEE IN EXCESS OF CERTAIN AMOUNT
PROHIBITED IF EMPLOYMENT TERMINATED. An owner, operator,
counselor, agent, or employee of a personnel service may not
charge an applicant a fee that exceeds 20 percent of the
applicant's gross wages if:
(1) the employment accepted by the applicant as a result of a
referral by the personnel service lasts less than 30 days; and
(2) the applicant terminates the employment for good cause.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 6, eff. June 1,
2003.
SUBCHAPTER D. ENFORCEMENT
Sec. 2501.151. ENFORCEMENT. (a) The executive director shall
enforce Section 2501.102 and may investigate a personnel service
as necessary to enforce that section.
(b) The attorney general shall assist the executive director on
request.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 6, eff. June 1,
2003. Amended by Acts 2003, 78th Leg., ch. 816, Sec. 26.074, eff.
Sept. 1, 2003; Acts 2003, 78th Leg., ch. 1276, Sec. 14A.707, eff.
Sept. 1, 2003.
Sec. 2501.152. COMPLAINT AND INVESTIGATION. (a) A person may
file with the executive director a complaint alleging a violation
of Section 2501.102.
(b) On receipt of a complaint, the executive director shall
investigate the alleged violation and may:
(1) inspect any records relevant to the complaint; and
(2) subpoena those records and any necessary witnesses.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 6, eff. June 1,
2003. Amended by Acts 2003, 78th Leg., ch. 816, Sec. 11.002, eff.
Sept. 1, 2003; Acts 2003, 78th Leg., ch. 1276, Sec. 14A.707, eff.
Sept. 1, 2003.
Sec. 2501.153. HEARING. (a) If the executive director
determines as a result of an investigation that a violation of
Section 2501.102 may have occurred, the commission shall hold a
hearing.
(b) A hearing under this section shall be conducted in the
manner provided for a contested case under Chapter 2001,
Government Code.
(c) The commission shall render a decision on the alleged
violation after the hearing is concluded.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 6, eff. June 1,
2003. Amended by Acts 2003, 78th Leg., ch. 816, Sec. 11.003, eff.
Sept. 1, 2003.
Sec. 2501.154. SANCTIONS. (a) If, after a hearing, the
commission determines that a personnel service has violated
Section 2501.102, the commission may, as appropriate:
(1) issue a warning to the personnel service; or
(2) suspend or revoke the certificate of authority issued to the
personnel service.
(b) If, after a hearing, the commission determines that a
personnel service has violated Section 2501.102, the commission
may award the complainant an amount equal to the amount of the
fee charged by the personnel service.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 6, eff. June 1,
2003. Amended by Acts 2003, 78th Leg., ch. 816, Sec. 11.004, eff.
Sept. 1, 2003.
SUBCHAPTER E. CIVIL LIABILITY
Sec. 2501.201. LIABILITY FOR DAMAGES. (a) In this section,
"knowingly" means actual awareness of the act or practice that is
the alleged violation. Actual awareness may be inferred if any
objective manifestation indicates that the person acted with
actual awareness.
(b) A person who violates this chapter is liable to a person
adversely affected by the violation for:
(1) actual damages; or
(2) if the person adversely affected establishes that the
violation was committed knowingly, three times the amount of
actual damages.
(c) Damages recoverable in an action under this section are
subject to reduction by an amount equal to an amount awarded
under Section 2501.154 based on the same conduct.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 6, eff. June 1,
2003.
Sec. 2501.202. INJUNCTION AND OTHER REMEDIES. A plaintiff in an
action filed under Section 2501.201 may obtain:
(1) an order enjoining the defendant from violating this
chapter;
(2) any order necessary to restore to the plaintiff any property
acquired by the defendant in violation of this chapter; or
(3) other relief the court considers proper, including:
(A) the appointment of a receiver if the judgment against the
defendant is not satisfied within three months after the date of
the final judgment;
(B) the revocation of a certificate authorizing the defendant to
engage in business in this state; or
(C) an order enjoining the defendant from acting as a personnel
service.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 6, eff. June 1,
2003.
Sec. 2501.203. AWARD OF ATTORNEY'S FEES. (a) A plaintiff who
prevails in an action filed under Section 2501.201 is entitled to
receive court costs and reasonable and necessary attorney's fees.
(b) On finding that an action filed under Section 2501.201 is
groundless and was brought in bad faith or for the purpose of
harassment, the court may award court costs and reasonable
attorney's fees to the defendant.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 6, eff. June 1,
2003.
Sec. 2501.204. DECEPTIVE TRADE PRACTICE. A violation of this
chapter is a false, misleading, or deceptive act or practice
within the meaning of Section 17.46, Business & Commerce
Code, and any public or private right or remedy authorized by
Subchapter E, Chapter 17, Business & Commerce Code, may be
used to enforce this chapter.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 6, eff. June 1,
2003.
SUBCHAPTER F. PENALTIES
Sec. 2501.251. CRIMINAL PENALTY. (a) A person commits an
offense if the person knowingly violates this chapter.
(b) An offense under this section is a Class A misdemeanor.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 6, eff. June 1,
2003.
Sec. 2501.252. TRADE SECRET. A service file is a trade secret
for purposes of Section 31.05, Penal Code.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 6, eff. June 1,
2003.
Sec. 2501.253. ADMINISTRATIVE PENALTY. (a) In addition to the
amount awarded to a complainant under Section 2501.154(b), the
executive director may impose on the personnel service an
administrative penalty equal to two times the amount awarded
under that subsection. A penalty collected under this section
shall be deposited in the state treasury.
(b) A penalty imposed under this section is in lieu of a
criminal penalty provided by this chapter for a violation of
Section 2501.102.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 6, eff. June 1,
2003. Amended by Acts 2003, 78th Leg., ch. 816, Sec. 26.075, eff.
Sept. 1, 2003; Acts 2003, 78th Leg., ch. 1276, Sec. 14A.710, eff.
Sept. 1, 2003.
Sec. 2501.254. EFFECT ON OTHER REMEDIES AND ENFORCEMENT POWERS.
This chapter does not affect a public or private remedy or
enforcement power available under other law.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 6, eff. June 1,
2003.