Texas Codes

Tex. Lab. Code § 91.032 (2026)

Contract Requirements

✓ current as of May 2026
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Sec. 91.032. CONTRACT REQUIREMENTS. (a) A professional employer services agreement between a license holder and a client must provide that the license holder:

(1) shares, as provided by Subsection (b), with the client the right of direction and control over covered employees;

(2) assumes responsibility for the payment of wages to the covered employees without regard to payments by the client to the license holder;

(3) assumes responsibility for the payment of payroll taxes and collection of taxes from payroll on covered employees;

(4) shares, as provided by Subsection (b), with the client the right to hire, fire, discipline, and reassign the covered employees; and

(5) shares, as provided by Subsection (b), with the client the right of direction and control over the adoption of employment and safety policies and the management of workers' compensation claims, claim filings, and related procedures.

(b) Notwithstanding any other provision of this chapter, a client retains sole responsibility for:

(1) the direction and control of covered employees as necessary to conduct the client's business, discharge any applicable fiduciary duty, or comply with any licensure, regulatory, or statutory requirement;

(2) goods and services produced by the client; and

(3) the acts, errors, and omissions of covered employees committed within the scope of the client's business.

(c) Notwithstanding Subsection (a)(2), a client is solely obligated to pay any wages for which:

(1) obligation to pay is created by an agreement, contract, plan, or policy between the client and the covered employee; and

(2) the professional employer organization has not contracted to pay.

(d) Each professional employer organization shall disclose the requirements of Subsection (c) in writing to each covered employee.

Added by Acts 1995, 74th Leg., ch. 76, Sec. 9.20(a), eff. Sept. 1, 1995. Amended by Acts 1999, 76th Leg., ch. 771, Sec. 7, eff. Sept. 1, 1999; Acts 2003, 78th Leg., ch. 833, Sec. 2, eff. Sept. 1, 2003.

Amended by:

Acts 2013, 83rd Leg., R.S., Ch. 117 (S.B. 1286), Sec. 14, eff. September 1, 2013.

SUBCHAPTER D. POWERS AND DUTIES OF LICENSE HOLDER


Notes of Decisions
Cited in 9 cases, 2000–2019 · leading case: Texas Workers' Comp. Ins. Fund v. Del Indus., Inc., 35 S.W.3d 591 (Tex. 2000).
Texas Workers' Comp. Ins. Fund v. Del Indus., Inc., 35 S.W.3d 591 (Tex. 2000). · cites it 3× “See Tex. Lab.Code § 91.032. Moreover, the SLSA grants the staff leasing company the exclusive right to elect or deny workers’ compensation coverage to leased workers.”
Gerardo Rico v. Judson Lofts, Ltd., 404 S.W.3d 762 (Tex. App. 2013). · cites it 7× “Specifically, Rico argues that the Service Agreement does not satisfy the requirements of the SLSA because, inter alia, the parties did not “actually or contractually share meaningful employment responsibilities” as required by Texas Labor Code section 91.”
W. Steel Co., Inc. v. Altenburg, 169 S.W.3d 347 (Tex. App. 2005). · cites it 2× “See TEX. LAB.CODE ANN. § 91.032 (Vernon Supp.”
Rodriguez v. Lockhart Contracting Servs., Inc., 499 S.W.3d 48 (Tex. App. 2016). “Tex. Lab.Code Ann. § 91.032(a). Rodriguez also contends Prime Source failed to provide him with the required statutory notice of coverage pursuant to section 91.”
Calvasina ex rel. Calvasina v. Wal-Mart Real Est. Bus. Trust, 899 F. Supp. 2d 590 (W.D. Tex. 2012). “Texas Lab.Code § 91.032(a)(1). They must also contractually agree that the leasing company and client share “the right to hire, fire, discipline, and reassign the assigned employees” and share “the right of direction and control over the adoption of employment and safety…”
Brazos Contractors Dev., Inc. v. Henry Jefferson (Tex. App. 2019). “0012; TEX. LAB. CODE ANN. §§ 91.032, 501.022; TEX.”
Gerardo DeLeon v. Thos. S. Byrne, Ltd., F/K/A Thos. S. Byrne, Inc. & Unique Staff Leasing I, Ltd., D/B/A Unique Staffing (Tex. App. 2012). “” [9] See Tex. Lab. Code Ann. § 91.032 (a)(1), (4), (5) (West 2006) (requiring that contracts between staff leasing company and client provide that staff leasing company shares with its client “the right of direction and control” over and “the right to hire, fire, discipline,…”
Gerardo DeLeon v. Thos. S. Byrne, Ltd., F/K/A Thos. S. Byrne, Inc. & Unique Staff Leasing I, Ltd., D/B/A Unique Staffing (Tex. App. 2012). “‖9 See Tex. Lab. Code Ann. § 91.032 (a)(1), (4), (5) (West 2006) 9 The contract also provides, As part of Unique‘s shared right of direction and control over the management of safety, risk and hazard control involving assigned employees performing work at [Sparking Clean‘s] work…”
Tex. Lab. Code § 91.032(a): 1 case
Rodriguez v. Lockhart Contracting Servs., Inc., 499 S.W.3d 48 (Tex. App. 2016). “Tex. Lab.Code Ann. § 91.032(a). Rodriguez also contends Prime Source failed to provide him with the required statutory notice of coverage pursuant to section 91.”
Tex. Lab. Code § 91.032(a)(1): 2 cases
Gerardo Rico v. Judson Lofts, Ltd., 404 S.W.3d 762 (Tex. App. 2013). “Specifically, Rico argues that the Service Agreement does not satisfy the requirements of the SLSA because, inter alia, the parties did not “actually or contractually share meaningful employment responsibilities” as required by Texas Labor Code section 91.”
Calvasina ex rel. Calvasina v. Wal-Mart Real Est. Bus. Trust, 899 F. Supp. 2d 590 (W.D. Tex. 2012). “Texas Lab.Code § 91.032(a)(1). They must also contractually agree that the leasing company and client share “the right to hire, fire, discipline, and reassign the assigned employees” and share “the right of direction and control over the adoption of employment and safety…”
Tex. Lab. Code § 91.032(a)(5): 1 case
Gerardo Rico v. Judson Lofts, Ltd., 404 S.W.3d 762 (Tex. App. 2013). “Specifically, Rico argues that the Service Agreement does not satisfy the requirements of the SLSA because, inter alia, the parties did not “actually or contractually share meaningful employment responsibilities” as required by Texas Labor Code section 91.”
Tex. Lab. Code § 91.032(b)(1): 2 cases
Gerardo Rico v. Judson Lofts, Ltd., 404 S.W.3d 762 (Tex. App. 2013). “Specifically, Rico argues that the Service Agreement does not satisfy the requirements of the SLSA because, inter alia, the parties did not “actually or contractually share meaningful employment responsibilities” as required by Texas Labor Code section 91.”
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