S.B. No. 1254 amends the Labor Code to enhance the regulation of professional employer organizations (PEOs) in Texas. The bill defines a "license holder" as a person who holds a license issued by the department to provide professional employer services. It updates the license issuance process, stating that licenses are valid for one year and must be renewed according to specific rules. Notably, if a license holder fails to apply for renewal on time, their status as an employer for covered employees continues for up to 18 months post-expiration, after which their status terminates, and they may face disciplinary action for providing services while unlicensed.

Additionally, the bill outlines grounds for disciplinary action against individuals, regardless of their licensing status, for various violations, including operating without a license or while their license is expired. The changes in law will apply only to conduct occurring after the effective date of the Act, which is set for September 1, 2025. This legislation aims to strengthen oversight and compliance within the professional employer services sector in Texas.

Statutes affected:
Introduced: Labor Code 91.001, Labor Code 91.016, Labor Code 91.020 (Labor Code 91)
Senate Committee Report: Labor Code 91.001, Labor Code 91.016, Labor Code 91.020 (Labor Code 91)
Engrossed: Labor Code 91.001, Labor Code 91.016, Labor Code 91.020 (Labor Code 91)
House Committee Report: Labor Code 91.001, Labor Code 91.016, Labor Code 91.020 (Labor Code 91)
Enrolled: Labor Code 91.001, Labor Code 91.016, Labor Code 91.020 (Labor Code 91)