2025 Texas sessionsRegular and both called sessions have ended. This index covers House and Senate bills, not resolutions. Statuses come from official reports.

2025 · Regular session · Senate bill

SB1254

SB1254 clarifies what happens when a professional employer organization’s license expires and expands the licensing agency’s express disciplinary reach.

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Official caption: Relating to the regulation of professional employer organizations.

Signed by governorSource-checked explanation published

Official report lists Senate author(s): Zaffirini. This does not identify sponsors or amendment drafters.

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Bill explanation published · Version and amendment review scope is stated below · Individual amendment records may not be separately annotated.

Bill highlights

Selected points from the published explanation. Follow each point to its source-linked context; conditions and limits may matter.

SB1254 clarifies what happens when a professional employer organization’s license expires and expands the licensing agency’s express disciplinary reach.
If the license holder fails to apply for renewal on time, its status as employer of a covered employee continues, for purposes of Labor Code chapter 91, until 18 months after license expiration.
Employer-status continuity is not an 18-month permission to operate without a valid license.

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What does it do?

SB1254 clarifies what happens when a professional employer organization’s license expires and expands the licensing agency’s express disciplinary reach. A professional employer organization, or PEO, shares employment responsibilities with a client business through a contractual coemployment relationship; this is distinct from ordinary temporary-help staffing. The law concerns covered employees in that relationship, not every worker supplied by any staffing company. Final law; PEO and covered-employee definitions.

If the license holder fails to apply for renewal on time, its status as employer of a covered employee continues, for purposes of Labor Code chapter 91, until 18 months after license expiration. If it does not apply for renewal before that 18-month period ends, its employer status terminates and it is subject to discipline for engaging in or offering professional employer services at any time while its license was expired. The act does not make every client business cease being an employer or guarantee that every contract or benefit remains unchanged. Final law, section 3; Existing shared responsibilities.

Employer-status continuity is not an 18-month permission to operate without a valid license. The act expressly makes offering or providing services without a license, or while a license is expired, suspended or inactive, grounds for discipline. The existing general renewal law also bars licensed activity after expiration until renewal. Licenses remain valid for one year from issuance or renewal; renewal is now expressly governed by the department’s general statutory renewal framework and applicable rules rather than only the former complete-form-and-fee wording. Final law, sections 3–4; General renewal rules; PEO license requirement.

What changed along the way?

The disciplinary provision now reaches a person regardless of whether that person holds a license, using the department’s existing administrative-enforcement framework. It expressly adds expired, suspended and inactive licenses to the unlicensed-services ground. The other listed grounds remain, including tax deficiencies, insurance or benefit-premium delinquencies not subject to a legitimate dispute, knowingly making material misrepresentations, failure to maintain working capital and using PEO services to avoid an existing collective bargaining agreement. These retained grounds are not all new offenses created by this act. Final law, section 4; Prior disciplinary grounds; Existing notice and hearing opportunity.

The introduced bill tied the new employer-status provision to licenses expiring on or after the effective date, while separately limiting the disciplinary changes to later conduct. The Senate substitute replaced those separate transition provisions with one rule: the act’s changes apply only to conduct on or after September 1, 2025, with earlier conduct governed by prior law. The substitute, Senate-passed, House committee and enrolled substantive texts match; there are no indexed floor amendments. Signed June 20, the act took effect September 1. It also clarifies that a license holder holds a department-issued license to provide PEO services. Introduced text; Senate substitute; All versions; Amendment index; Official history; Final law, sections 1 and 5–6.

For the full amendment record, open the official amendment index.

Official bill versions

Compare the published text versions in the official text index. A change is not attributed to a specific amendment here without a verified record.

Who could benefit—and who could bear the costs?

Covered employees and client businesses gain a statutory continuity rule for the PEO’s chapter 91 employer status after a missed renewal deadline. At the same time, providers cannot treat a lapse as a way to escape licensing oversight: the agency may discipline licensed or unlicensed persons on the stated grounds. The law does not forgive unpaid wages, payroll taxes, premiums or other existing responsibilities, and it does not promise payment from a new public fund. Final law; Existing contract responsibilities.

The March 22 introduced and March 27 substitute fiscal notes anticipate no significant state or local-government fiscal impact and assume state costs can be absorbed with existing resources. They do not quantify private compliance costs, employee recoveries or enforcement collections. The act makes no appropriation. Introduced fiscal note; Substitute fiscal note.

Official sources

Catalog report retrieved 2026-10-25. Check the official record for corrections or later changes.