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House approves licensing regime for professional employer organizations
Summary
The House passed House Bill 159, the Professional Employer Organization Licensing Act, by 74–1, moving oversight of PEOs to the Department of Insurance and requiring annual licensing, minimum working capital and audited financial statements.
The Utah House on a voice vote sent House Bill 159, the Professional Employer Organization Licensing Act, to the Senate after a 74–1 roll call, adopting new licensing and oversight requirements for PEOs.
“A PEO is a professional employee organization and it partners with small business to provide large business type benefits,” Representative James Dunnigan said in presenting the bill, outlining the industry’s role and the need to address bad actors.
The bill transfers regulatory authority for PEOs from the Department of Commerce to the Department of Insurance, requires annual license renewal, a minimum level of working capital, audited financial statements and gives the Department of Insurance authority to revoke licenses if firms fall into negative working capital. The measure also sets conditions for PEO-operated health plans, including minimum operational tenure and third‑party administration requirements.
Sponsor Dunnigan told the chamber that the PEO industry supported the legislation and that the measure is intended to professionalize operations while targeting firms that have failed to remit payroll-related taxes and benefits. In response to a question from the floor, he said there are about 75 PEOs domiciled in Utah and additional national firms operating in the state.
The House opened and closed voting on the bill on the floor; the clerk announced the tally as 74 yes and 1 no. The bill will be transmitted to the Senate for further consideration.
