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Montana bill would drop criminal background checks for PEO CEOs to speed licensing
Summary
A House bill heard before the Senate Business and Labor Committee would remove fingerprint and criminal background-check requirements for the chief executive of professional employer organizations, a change proponents say would streamline licensing for firms that provide payroll, workers' compensation and other HR services.
Representative Melissa Nicolas Kakis, sponsor of House Bill 254, told the Senate Business and Labor Committee that HB 254 “saves both time and money by streamlining the application process for professional employer organizations known as PEOs.”
The bill, she said, would remove the statutory requirement that PEO chief executives submit fingerprints and pass criminal background checks during initial registration and annual renewals.
Why it matters: Quentin O'Connor, chief legal counsel for the Department of Labor and Industry, told the panel Montana is currently “the only state in the country that is running a criminal background check for PEO licensing.” He said the department performs financial oversight of PEOs but that the CEO criminal-check requirement has not been meaningful since PEO regulation began in the mid-1990s. O'Connor said the Department of Labor has never denied a PEO CEO a license as a result of the background check.
Olivia Plemmons, director of state government affairs for the National Association of Professional Employer Organizations (NAPEO), testified online in support and said removing fingerprint and background-check requirements for initial registration and renewal would help streamline the process and could encourage industry growth in Montana.
Discussion and limits: Committee members asked no substantive questions during the hearing. The sponsor and supporters said other financial and regulatory oversight of PEOs would remain in place; the bill changes only the criminal-history requirement for chief executives. Proponents said the Department worked with NAPEO in drafting the changes.
Next steps: The hearing record closed with no opponents in the room or online and no informational witnesses. The committee did not take a recorded vote during the hearing.
Ending: Proponents asked the committee to give the bill a favorable report so Montana's PEOs can be licensed more quickly and with less administrative delay.
