TDLR revises enforcement plan

The Texas Department of Licensing & Regulation recently adopted a revised enforcement plan addressing all of the licenses issued by the Department.

The enforcement plan gives license holders notice of the specific ranges of penalties and license sanctions that apply to specific alleged violations of the statutes and rules enforced by the Department. The enforcement plan also presents the criteria that are considered by the Department's Enforcement staff in determining the amount of a proposed administrative penalty or the magnitude of a proposed sanction.

The enforcement plan describes in some detail the range of penalties that the Department may assess for various kinds of violations, and the factors that will be taken into account in setting the specific penalty in a particular case. The enforcement plan includes penalty matrices that are specific to each of the license programs administered by the TDLR.

The introduction and general description of the enforcement plan can be found here.

The penalty matrix that is specific to PEOs and Staff Leasing firms is here.

The revised enforcement plan was adopted by the TDLR at the Commission's regularly scheduled meeting held December 6, 2006. Notice of the revised enforcement plan was filed with the Texas Register on December 18, 2006, and will be published in the December 29, 2006, publication.

PEOs and staff leasing firms benefit from this, as it reduces the risk of the Department threatening penalties out of keeping with the seriousness of the offense. While the Department's enforcement efforts under the current Executive Director appear to have been reasonable, in prior years the Department often threatened to assert the statutory maximum fine or to revoke a license in a minor case as a method of "encouraging" a settlement.

There are only a few types of violations for which the TDLR will seek revocation of the license on the first offense:

• Giving materially false or forged evidence in connection with obtaining a license, or during disciplinary proceedings - 91.061(4), 72.70(d) and 60.63(b)
• Failure to comply with a previous order of the Commission or the Executive Director - 51.353(a) and 72.90
• Obtaining a license by fraud or false representation - 60.63(b)
• Failure to pay the Department for a dishonored check - 60.82

The moral of this story - don't give the TDLR a hot check!

Time to revisit old contracts

I recently worked on a problem for a PEO client that made me think about the problem of good customers. You know, the customers who signed up in the early days of your PEO - before you actually knew what you were doing. If you are like most PEOs, you have some clients that are under really old versions of your customer service agreement.

PEO owners need to periodically review the contracts they have their clients under. You may find that some clients are under contracts so outdated, that an update is needed. There is nothing easy about recontracting these clients.

One strategy for securing the client's cooperation is to tell them the truth - you are a good client and have been with us a long time. However, state law has changed over the years, and we want to make sure that our agreements are in compliance with current state law regulating the PEO business.