HB 250: Better Small Business Employee Benefits Act; enact

Professional employer organizations (PEOs), sometimes called staff leasing or employee leasing companies, let small businesses outsource payroll, tax withholding, and employee benefits while sharing legal employer status with their client companies. Georgia's current law on these arrangements is scattered across old labor code sections that this bill rewrites almost entirely. The bill creates a new Chapter 11 in Title 34 requiring PEOs to register with the Department of Insurance starting July 1, 2027, with applications accepted beginning January 2, 2026. It defines the co-employment relationship, spells out which duties belong to the client business versus the PEO, sets registration fees (capped at $500 for initial registration and $250 for renewal), creates a public directory of registered PEOs, exempts registered PEOs from separate insurance agent and administrator licenses, and lets the Insurance Commissioner fine violators up to $2,000 per violation or revoke a registration. It also repeals the old 'employee leasing company' definitions in Code Sections 34-7-6 and 34-8-32 and updates related labor law references. The law would take effect as soon as the Governor signs it.

• Creates a new state registration requirement for professional employer organizations (PEOs) starting July 1, 2027, administered by the Department of Insurance rather than the Department of Labor.
• Sets registration fees capped at $500 for initial PEO registration and $250 for annual renewal, with separate caps for PEO groups and limited or temporary registrants.
• Defines the co-employment relationship, spelling out which employment duties (hiring, firing, safety, direction and control) belong to the client business versus the PEO.
• Exempts registered PEOs from needing separate insurance agent, administrator, or certificate of authority licenses when handling client benefits within a PEO agreement.
• Lets the Insurance Commissioner deny, suspend, or revoke a PEO's registration and impose fines of up to $2,000 per violation.
• Repeals the old 'employee leasing company' provisions in Code Sections 34-7-6 and 34-8-32 and updates related labor and workers' compensation law to reference the new PEO definitions.

Small and mid-sized businesses that outsource payroll and HR to professional employer organizations, the PEOs (also known as staff leasing or employee leasing companies) themselves, their covered employees, the Department of Insurance and Department of Labor, and insurance agents or administrators who currently serve this market.

Small businesses that use PEOs to handle payroll and benefits would deal with a newly regulated, state-registered industry instead of loosely defined 'employee leasing companies,' potentially giving them clearer legal protections and a public directory to check a PEO's registration status before signing a contract.

• Section 1-1 exempts PEOs from insurance agent, subagent, or counselor licensing when handling insurance matters strictly within a professional employer agreement (O.C.G.A. § 33-23-1).
• New Code Section 34-11-2 requires PEO registration with the Department of Insurance beginning July 1, 2027, with applications accepted starting January 2, 2026, and requires financial statements proving positive working capital.
• New Code Section 34-11-3 caps registration fees at $500 initial and $250 renewal per PEO, with matching caps for PEO groups, limited registrants, and temporary registrants.
• New Code Section 34-11-5 makes it illegal to use terms like 'PEO' or 'staff leasing company' while providing professional employer services without registering, and makes knowingly submitting false registration information illegal.
• New Code Section 34-11-6 allocates employer duties between client and PEO in a co-employment relationship, including wage payment, tax withholding, and liability for employee acts.
• New Code Section 34-11-9 authorizes the Insurance Commissioner to deny, suspend, or revoke registrations and impose fines up to $2,000 per violation.
• Section 3-1 through 3-4 repeal or rewrite older employee leasing company provisions in Code Sections 34-7-6, 34-8-32, 34-8-34, and 34-8-172 to align with the new PEO chapter.
• Section 4-1 states the law 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-25)
• Noel Williams, Jr. (R, HD-148)
• Chuck Martin (R, HD-49)

1. PassedHouse voteMarch 6, 2025

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

   PASSAGE: House Vote #215

• professional employer organizations
• small business regulation
• employee benefits
• insurance licensing
• labor law