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Introduction
The Texas Staff Leasing Service Bond is a type of surety bond mandated by the Texas Department of Licensing and Regulation (TDLR) for entities operating as Staff Leasing Services, also known as Professional Employer Organizations (PEOs). This bond is mandated under Texas Labor Code §91.109 to guarantee financial responsibility and legal compliance by staff leasing companies that co-employ workers on behalf of client businesses.
What is the Purpose of the Texas Staff Leasing Service Bond?
The main purpose of the bond is to come up with financial protection to the state and client businesses in the event the staff leasing service fails to: Pay wages, benefits, payroll taxes, or workers’ compensation premiums, Comply with applicable state labor laws and licensing rules, Meet other obligations required under Chapter 91 of the Texas Labor Code. This bond helps maintain industry integrity and safeguards Texas businesses that rely on third-party staffing providers.
Who Needs This Texas Staff Leasing Service Bond?
Any company in Texas that provides staff leasing services—co-employing workers and handling payroll, HR, and benefits administration for client companies—is required to owned this bond before receiving or renewing its Staff Leasing Services license.
What is Texas Staff Leasing Service Bond?
The Texas Staff Leasing Service Bond is a bond that all professional employers are required to have in order to operate legally. These bonds help protect the company and its employees from potential issues with creditors, vendors or customers when your business shuts down unexpectedly.
What are the Consequences of Noncompliance?
A failure to secure and maintain this bond can result in many consequences like, Denial or revocation of the Staff Leasing Service license, Fines and penalties issued by TDLR, Legal liability for unpaid wages, taxes, or benefit contributions.
These are the steps to obtain the Texas Staff Leasing Service Bond
To legally operate as a Staff Leasing Service in Texas, you must obtain a Texas Staff Leasing Service Bond in compliance with Texas Labor Code §91.109 and Texas Department of Licensing and Regulation (TDLR) rules.
Determine Your Bond Amount – The TDLR may require a higher bond based on Volume of business, Financial condition of the applicant, Compliance history.
Choose a Licensed Surety Company – Select a surety company (Swiftbonds) that is licensed to provide bonds in Texas.
Apply for the Bond – Be prepared to provide the surety with business and ownership details, Financial statements or credit reports, Licensing information from TDLR.
Once approved, the surety will issue the Staff Leasing Service Bond Form (SLB).
Submit the Bond to TDLR – Present the original signed bond (not a copy) to Texas Department of Licensing and Regulation (TDLR).
Renew Annually – The bond must be kept continuously active to maintain your license. Renew the bond before it expires—typically every 12 months or per bond term. Failure to maintain the bond can result in license suspension or revocation.
Conclusion: Texas Staff Leasing Service Bond
The Texas Staff Leasing Service Bond plays an essential role in making sure that staff leasing companies (also known as Professional Employer Organizations or PEOs) operate with financial integrity and legal compliance under Texas Labor Code §91.109. Required by the Texas Department of Licensing and Regulation (TDLR), this surety bond protects the interests of co-employed workers, client businesses, and the state by providing a financial safeguard against non-payment of wages, taxes, or employee benefits, and against violations of state regulations.
Frequently Asked Questions:
How does staff leasing work in Texas?
In Texas, a staff leasing service enters into a co-employment relationship with a business. The PEO becomes the employer of record for certain administrative functions, such as payroll, benefits, and taxes, while the business continues to manage the employees’ actual job responsibilities and performance.
Are staff leasing services regulated in Texas?
Yes, staff leasing services are regulated by the Texas Department of Licensing and Regulation (TDLR). Companies offering staff leasing services must be licensed by the TDLR and comply with relevant state laws, including those related to workers’ compensation, payroll taxes, and employee benefits.
Can a business terminate a staff leasing agreement in Texas?
Yes, a business can terminate a staff leasing agreement, but it must follow the terms outlined in the contract. It is essential to provide proper notice as stipulated and review the agreement for any exit conditions.
Are staff leasing services suitable for all types of businesses in Texas?
Staff leasing services can be useful for many types of businesses, particularly small to medium-sized enterprises that lack the resources to manage HR functions in-house. However, businesses with specialized HR needs or those requiring highly customized services may need to evaluate if staff leasing is the best option.
How can a business verify if a staff leasing company is licensed in Texas?
Businesses can verify the licensing status of a staff leasing service by visiting the Texas Department of Licensing and Regulation (TDLR) website or contacting TDLR directly. The TDLR maintains a searchable database of licensed staff leasing companies.