HB250: HB250 Better Small Business Employee Benefits Act; enact

Professional employer organizations, sometimes called staff leasing or employee leasing companies, handle payroll, benefits, and HR duties for small businesses that hire them. Georgia currently has little specific regulation of these companies. House Bill 250, called the Better Small Business Employee Benefits Act, sets up a formal registration system for PEOs through the Department of Insurance, starting July 1, 2027, with applications accepted beginning January 2, 2026. The bill spells out what a PEO must disclose to register, caps registration and renewal fees, restricts who can use terms like 'PEO' or 'staff leasing company,' and lets the Commissioner of Insurance fine or discipline violators. It also clarifies how co-employment works: who counts as the employer for taxes, licensing, benefits, and small business certifications, and confirms that collective bargaining agreements are unaffected. Related sections of the labor code covering employee leasing companies are updated to fold PEOs into existing definitions, and a surety bond requirement is extended to PEOs. The law would take effect as soon as the Governor signs it.

• Creates a new registration system for professional employer organizations (PEOs) through the Department of Insurance, required starting July 1, 2027.
• Sets maximum registration and renewal fees for PEOs and PEO groups, ranging from $250 to $500.
• Makes it illegal to use terms like 'PEO' or 'staff leasing company' while providing PEO services without being registered.
• Gives the Insurance Commissioner power to deny, suspend, or revoke a PEO's registration and fine violators up to $2,000 per violation.
• Clarifies that in a co-employment relationship, clients (the small businesses) keep responsibility for day-to-day direction, licensing compliance, and tax credits tied to employee counts.
• Exempts registered PEOs from certain insurance agent, administrator, and insurer licensing requirements when acting within a PEO agreement.

Small businesses that use PEOs for payroll and benefits, the PEOs themselves (including staff leasing and employee leasing companies), workers co-employed under these arrangements, the Department of Insurance and Commissioner of Labor, and insurance agents or administrators who interact with PEO-arranged benefits.

Small businesses and their workers would gain clearer rules on who is responsible for taxes, benefits, licensing, and workplace obligations when a PEO is involved, and the state would have new tools to police unregistered or fraudulent PEOs, which could affect how reliably payroll and benefits are handled.

• Section 2-2 creates a new Chapter 11 in Title 34 defining key terms like 'client,' 'covered employee,' 'PEO group,' and 'professional employer agreement' (O.C.G.A. § 34-11-1).
• O.C.G.A. § 34-11-2 requires PEO registration with the Department of Insurance beginning July 1, 2027, with applications accepted from January 2, 2026, and lists required disclosures.
• O.C.G.A. § 34-11-3 caps fees, for example a $500 initial registration fee and $250 renewal fee for a single PEO.
• O.C.G.A. § 34-11-5 makes it unlawful to use PEO-related business names or provide PEO services without registering, and requires complaints to be routed through the department.
• O.C.G.A. § 34-11-6 spells out how rights and duties are divided between a client and a PEO, including wage payment, hiring and firing authority, and liability for employee counts.
• O.C.G.A. § 34-11-9 authorizes the Commissioner to deny, suspend, or revoke registrations and impose fines up to $2,000 per violation.
• Part III updates existing labor code sections (O.C.G.A. §§ 34-7-6, 34-8-32, 34-8-34, 34-8-172, 34-8-195, 34-9-11) to align employee leasing company rules with the new PEO framework, including extending a surety bond requirement to PEOs.
• Section 4-1 states the Act takes effect immediately upon the Governor's signature or upon becoming law without signature.

1. 2025-03-10Senate Read and Referred (Senate)
2. 2025-03-06House Passed/Adopted By Substitute (House)
3. 2025-03-06House Third Readers (House)
4. 2025-02-27House Committee Favorably Reported By Substitute (House)
5. 2025-02-06House Second Readers (House)
6. 2025-02-05House First Readers (House)
7. 2025-02-04House Hopper (House)

• Darlene Taylor (R, HD-173)Primary sponsor
• Mike Cheokas (R, HD-151)
• Todd Jones (R, HD-025)
• Noel Williams (R, HD-148)
• Charles Martin (R, HD-049)

1. PassedHouse voteMarch 6, 2025

   165 yea, 7 nay (2 not voting, 6 absent)

   Passage: House Vote #215

• small business regulation
• employee leasing
• insurance regulation
• labor law
• professional employer organizations