20250AB__151598AMD INTRODUCED 2025-03-10 AMENDED_SENATE 2025-06-23 2025 AB AMD Introduced by Committee on Labor and Employment (Assembly Members Ortega (Chair), Elhawary, Kalra, and Ward) LEAD_AUTHOR ASSEMBLY Committee on Labor and Employment Assembly Members Ortega (Chair), Elhawary, Kalra, and Ward

An act to add

Chapter 1 (commencing with

Section 1650) to Part of Division of the Labor Code, relating to employment. employment Professional employer organizations. Existing federal law provides for certification of a professional employer organization (PEO) by the Secretary of the Treasury and, for purposes of specified taxes and other obligations, treats a PEO as the employer of any work site employee performing services for any customer of the PEO. Existing law establishes the Division of Labor Standards Enforcement, headed by the Labor Commissioner, within the Department of Industrial Relations, for the purpose of enforcing labor laws.

This bill would prohibit a person from providing, advertising, or otherwise holding oneself out as providing professional employer services, as defined, in the state unless the person is registered with the division. The bill would require a PEO, as defined, upon registration, to pay an initial registration fee established by the division not to exceed the reasonable cost of registration.

Existing law establishes the Division of Occupational Safety and Health in the Department of Industrial Relations, and charges the division with the enforcement of various laws affecting safe working conditions, including the California Occupational Safety and Health Act of 1973. Existing law requires the Director of Industrial Relations to prepare and submit to the Legislature an annual report on the activities of the division, as specified.</xhtml:p><xhtml:p>This bill would additionally require the director to submit the report to the Governor and post the report on the department’s internet website.

This bill would also make nonsubstantive changes <xhtml:span class="SpecialFormatting" style="display:inline;"/>to those provisions.</xhtml:p>"?> MAJORITY NO YES NO NO NO NO NO NO NO NO The people of the State of California do enact as follows:

SECTION 1.

Chapter 1 (commencing with

Section 1650) is added to Part of Division of the Labor Code , to read: 1. Professional Employer Organizations 1650. For purposes of this chapter: (a) “Division” means the Division of Labor Standards Enforcement. (b) “Professional employer organization” (PEO) means a person that meets any of the following criteria:

(1) Is certified by the Secretary of the Treasury pursuant to

Section of Title of the United States Code.

(2) Is accredited by the Employer Services Assurance Corporation.

(3) Provides professional employer services to a client pursuant to a written professional employer agreement intended by the parties to create an ongoing relationship. (c) “Professional employer services” means services pursuant to a professional services agreement that provides for all or substantially all employees of a client and includes all of the following:

(1) Reporting employee wages using the federal employer identification number of the PEO.

(2) Securing workers’ compensation insurance in compliance with paragraph (1) of subdivision (

d) of

Section and

Section 3700.

(3) Offering employee benefit plans. 1651. A person shall not provide, advertise, or otherwise hold oneself out as providing professional employer services in the state unless the person is registered with the division under this chapter. 1652.

Upon registration, a PEO shall pay an initial registration fee established by the division not to exceed the reasonable cost of providing the registration under this chapter. <caml:Num>SECTION 1.</caml:Num><caml:ActionLine action="IS_AMENDED" xlink:href="urn:caml:codes:LAB:caml#xpointer(%2Fcaml%3ALawDoc%2Fcaml%3ACode%2Fcaml%3ALawHeading%5B%40type%3D'DIVISION'%20and%20caml%3ANum%3D'5.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'PART'%20and%20caml%3ANum%3D'1.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'CHAPTER'%20and%20caml%3ANum%3D'1.'%5D%2Fcaml%3ALawSection%5Bcaml%3ANum%3D'6330.'%5D)" xlink:label="fractionType: LAW_SECTION" xlink:type="locator">Section of the <caml:DocName>Labor Code</caml:DocName> is amended to read:</caml:ActionLine><caml:Fragment><caml:LawSection id="id_8FA36514-C9F7-4793-AAFB-5A9994DAAD3D"><caml:Num>6330.</caml:Num><caml:LawSectionVersion id="id_8A7EE993-EA36-4095-A016-80E99AF0E3D8"><caml:Content><xhtml:p>(a)<xhtml:span class="EnSpace"/>The director shall prepare and submit to the Governor and the Legislature, not later than March 1, an annual report on the division activities.

The report shall include, but not be limited to, the following information for the previous calendar year:</xhtml:p><xhtml:p>(1)<xhtml:span class="EnSpace"/>The amount of funds allocated and spent in enforcement, education and research, and administration by the division.</xhtml:p><xhtml:p>(2)<xhtml:span class="EnSpace"/>The number of inspections made, and citations issued, by the division.</xhtml:p><xhtml:p>(3)<xhtml:span class="EnSpace"/>The number of civil penalties assessed, total amount of fines collected, and the number of appeals heard.</xhtml:p><xhtml:p>(4)<xhtml:span class="EnSpace"/>The number of contractors referred to the Contractors State License Board for hearing, pursuant to

Section 7109.5 of the Business and Professions Code, and the total number of these cases resulting in suspension or revocation of a license.</xhtml:p><xhtml:p>(5)<xhtml:span class="EnSpace"/>The report from the division prepared by the Bureau of Investigations for submission to the director pursuant to

Section 6315.3.</xhtml:p><xhtml:p>(6)<xhtml:span class="EnSpace"/>Recommendations for legislation that would improve the ability of the division to provide safety in places of employment.</xhtml:p><xhtml:p>(b)<xhtml:span class="EnSpace"/>The report shall be made to the Speaker of the Assembly and the Chairman of the Rules Committee of the Senate, for assignment to the appropriate committee or committees for evaluation.</xhtml:p><xhtml:p>(c)<xhtml:span class="EnSpace"/>The director shall post the report on the department’s internet website.</xhtml:p></caml:Content></caml:LawSectionVersion></caml:LawSection></caml:Fragment></caml:BillSection>"?>