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Committee adopts amendment to HB 2236A letting PEOs elect payroll-tax filing approach; bill to floor
Summary
The committee adopted the A6 amendment to House Bill 2236A, which clarifies that professional employer organizations may elect to treat client employees as their own for quarterly payroll-tax filing; the measure was referred to the floor with a due-pass recommendation and will return to the House for concurrence.
House Bill 2236A, a measure addressing how worker leasing companies and professional employer organizations (PEOs) treat client employees for quarterly payroll-tax filing, was amended and moved toward the Senate floor on May 8.
Committee staff explained that the original bill would have required a worker leasing company to elect whether to treat client employees as the worker leasing company’s employees or as employees of the client employer for payroll-tax filings. An A5 amendment resolved conflicts with House Bill 2800 by updating definitions; the A6 amendment replaces worker-leasing language and narrows the measure so it requires a professional employer organization to make the election for current client employees until a conflict clause becomes effective in 2027.
A motion to adopt the A6 amendment was made and, after no objections, the committee adopted the amendment by voice vote. Chair Taylor announced that House Bill 2236A as amended was recommended to the Senate floor with a due-pass recommendation and that the measure will need to return to the House for concurrence.
The committee noted a minimal revenue impact and no fiscal impact for the amendment versions discussed. A member commented wryly that they did not want to hear the letters “PEO” for some time, reflecting that the subject has been before the committee multiple sessions.
Because the A6 amendment replaces worker-leasing language ahead of a future conflict clause and clarifies the election mechanics for PEOs, proponents told the committee the measure is intended to create certainty for payroll filing responsibilities between PEOs and client employers.
