Thursday, May 28, 2009

Amendements to PEO statute signed by Texas governor

Amendments to the Texas PEO licensing statute (HB 2249) passed both houses of the Texas legislature, and were signed into law by the Governor on 5/27/2009. Most of the law will go into effect on September 1, 2009. Changes in the financial statement requirement however will not be effective until December 31, 2011.

Authorization for TDLR to accept electronic filings via an authorized assurance organization as part of the licensing process. This is entirely optional on the part of PEOs, who will continue to have the option to satisfy all licensing requirements in the current fashion. ESAC is authorized as such an assurance organization in other states, and can be expected to seek authorization in Texas. For PEOs that participate in ESAC, this will make compliance with state licensing easier. This is particularly true for ESAC participating PEOs with operations in multiple states.

Change in the financial requirements. The new law will require audited financial statments, plus the financial requirments are now defined as a positive working capital requirement, rather than net worth. The numbers have not changed, $50,000, $75,000 or $100,000 - depending on the number of covered employees. The statute expressly delays the audit requirement to 12/31/2011. This means that PEOs operating in Texas will have to supply an audited financial statement with the first license application or first license renewal filed on or after 12/31/2011.

Clairification that a client company will continue to be eligible for state employment based tax credits, grants or other incentives based on the co-employees.

While some PEOs will oppose the change to working capital and required audits, these changes were essentially inevitable. The tide has been moving in these directions for some time. It just took a while to hit Texas.

Thursday, May 07, 2009

USERRA & Discrimination against returning military service members

Recent news reports indicate that the U.S. Department of Justice is taking an aggressive stance against companies (and government agencies) that discriminate against military service members who seek to return to their civilian jobs following completion of their military service. USERRA is the federal prohibiting employers from discriminating against returning service members, and effectively guaranteeing job reinstatement. The DOJ is aggressively filing suit to pursue these claims. http://www.law.com/jsp/article.jsp?id=1202430518180

PEOs are well positioned to assist their client companies to understand and comply with this somewhat obscure employment statute. For most small to midsized employers, USERRA is not well known.