CHAPTER 2501. PERSONNEL SERVICES

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OCCUPATIONS CODE

TITLE 15. OCCUPATIONS RELATED TO EMPLOYMENT

CHAPTER 2501. PERSONNEL SERVICES

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 2501.001. DEFINITIONS. In this chapter:

(1) "Applicant" means a person who:

(A) engages the services of a personnel service to secure

employment; or

(B) is placed with an employer by a personnel service.

(2) "Commission" means the Texas Commission of Licensing and

Regulation.

(3) "Counselor" means a person who:

(A) interviews and refers an applicant to a prospective

employer; or

(B) solicits job orders from an employer.

(3-a) "Department" means the Texas Department of Licensing and

Regulation.

(4) "Employer" means a person who employs or seeks to employ an

employee.

(4-a) "Executive director" means the executive director of the

department.

(5) "Fee" means anything of value, including valuable

consideration or a service or the promise of valuable

consideration or a service, directly or indirectly received by a

personnel service as payment from a person seeking employment.

(6) "Job order" means a verbal or written notice of a job

opening from an employer.

(7) "Owner" means a person who possesses a proprietary interest

in a personnel service.

(8) "Person" means an individual, partnership, association,

corporation, legal representative, trustee in bankruptcy, or

receiver.

(9) "Personnel service" means a person who, regardless of

whether for a fee, directly or indirectly offers or attempts to

obtain permanent employment for an applicant or obtains or

attempts to obtain a permanent employee for an employer. The term

does not include a newspaper of general circulation or other

publication that primarily communicates information, other than

information relating to employment positions, and that does not

claim to adapt the information provided to the needs or desires

of an individual applicant. The term includes a person who offers

the facilities of or advertises as:

(A) an executive search or consulting service;

(B) an out-placement service;

(D) a job listing service;

(E) a personnel consulting service; or

(F) a resume service that provides job market investigation,

research, or evaluation.

(10) "Service file" means a job order, resume, application,

workpaper, or other record containing information relating to:

(A) an applicant;

(B) an employer;

(D) the operation of a personnel service.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 6, eff. June 1,

2003. Amended by Acts 2003, 78th Leg., ch. 816, Sec. 11.001, eff.

Sept. 1, 2003.

Sec. 2501.002. EXCEPTION. This chapter does not apply to:

(1) a personnel service operated by the United States, this

state, or a municipality of this state;

(2) a personnel service operated by a person who does not assess

a fee if the personnel service is operated in conjunction with

the person's own business exclusively to employ help for that

business;

(3) a labor union; or

(4) a professional counselor licensed under Chapter 503.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 6, eff. June 1,

2003.

SUBCHAPTER B. CERTIFICATE OF AUTHORITY

Sec. 2501.051. CERTIFICATE REQUIRED. A person may not own a

personnel service that operates in this state unless the person

holds a certificate of authority issued under this chapter.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 6, eff. June 1,

2003.

Sec. 2501.052. MANAGEMENT SEARCH CONSULTANTS. (a) In this

section, "management search consultant" means a personnel service

that:

(1) is retained by, acts solely on behalf of, and is compensated

only by an employer; and

(2) does not directly or indirectly collect a fee from an

applicant as payment for a service performed by the personnel

service.

(b) This subchapter does not apply to a management search

consultant.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 6, eff. June 1,

2003.

Sec. 2501.053. NOTICE. (a) Not later than the 30th day before

the date a personnel service begins operating in this state, the

owner of the service must file notice with the executive

director.

(b) The notice must include:

(1) the address of each location at which the personnel service

is to operate its business on a daily basis;

(2) the assumed name, if any, under which the personnel service

will operate;

(3) the name and residence address of each owner; and

(4) a statement that each owner has read and is familiar with

this chapter.

notary public or other officer authorized to administer oaths.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 6, eff. June 1,

2003. Amended by Acts 2003, 78th Leg., ch. 816, Sec. 26.070, eff.

Sept. 1, 2003; Acts 2003, 78th Leg., ch. 1276, Sec. 14A.702, eff.

Sept. 1, 2003.

Sec. 2501.054. SECURITY REQUIRED. (a) An owner who files a

notice under Section 2501.053 shall file with the notice a bond

in the amount of $5,000 that is:

(1) executed with a good and sufficient surety;

(2) payable to the state; and

(3) conditioned that the obligor will not violate this chapter.

(b) In lieu of a bond under Subsection (a), the owner may

deposit $5,000 in cash.

aggrieved by a violation of this chapter by the principal or an

agent or representative of the principal is entitled to bring an

action on the bond.

(d) An owner of a personnel service may satisfy the requirements

of this section by filing one bond for the personnel service,

regardless of the number of locations at which the personnel

service is to operate its business on a daily basis.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 6, eff. June 1,

2003.

Sec. 2501.055. ISSUANCE OF CERTIFICATE; TERM. (a) On receipt

of a notice filed under Section 2501.053, the executive director

shall issue to the owner a certificate of authority to do

business as a personnel service not later than the 15th day after

the date the notice is filed if the owner:

(1) pays the filing fee required for the certificate; and

(2) complies with the requirements of Section 2501.054.

(b) A certificate of authority is valid for the period set by

the Texas Commission of Licensing and Regulation.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 6, eff. June 1,

2003. Amended by Acts 2003, 78th Leg., ch. 816, Sec. 26.071, eff.

Sept. 1, 2003; Acts 2003, 78th Leg., ch. 1276, Sec. 14A.703, eff.

Sept. 1, 2003.

Sec. 2501.056. DISPLAY OF CERTIFICATE. An owner shall display a

certificate of authority issued under this chapter in a prominent

place in each location at which the personnel service operates

its business on a daily basis.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 6, eff. June 1,

2003.

Sec. 2501.057. RENEWAL OF CERTIFICATE. The executive director

shall issue a renewal of a certificate of authority on the

receipt of:

(1) a renewal notice from the owner that contains the

information required by Section 2501.053;

(2) a renewal fee; and

(3) security that complies with Section 2501.054.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 6, eff. June 1,

2003. Amended by Acts 2003, 78th Leg., ch. 816, Sec. 26.072, eff.

Sept. 1, 2003; Acts 2003, 78th Leg., ch. 1276, Sec. 14A.704, eff.

Sept. 1, 2003.

SUBCHAPTER C. PROHIBITED PRACTICES

Sec. 2501.101. PROHIBITED PRACTICES. (a) An owner, operator,

counselor, agent, or employee of a personnel service may not:

(1) share or attempt to share a fee paid by a person seeking

employment or an employer with an employer or an agent or

employee of an employer or another person provided services by

the personnel service;

(2) make or cause to be made a false promise, misrepresentation,

or misleading statement or give or cause to be given misleading

information to an applicant;

(3) refer an applicant to an employer unless the personnel

service has a job order for the referral;

(4) advertise a position unless the personnel service has a job

order verifiable by the employer;

(5) procure or attempt to procure the discharge of a person from

the person's current employment;

(6) induce, solicit, or attempt to induce or solicit an employee

to terminate current employment in order to obtain new employment

if the current employment was obtained through that personnel

service or a personnel service that has a common ownership with

that personnel service unless the employee initiates the new

contact;

(7) deliver, disclose, distribute, or otherwise communicate to

or receive from a person a service file or information contained

in a service file, except as authorized by the personnel service

that owns the file;

(8) advertise in any medium, including a newspaper, trade

publication, billboard, radio, television, card, printed notice,

circular, contract, letterhead, or any other material made for

public distribution, except an envelope, without clearly stating

that the advertisement is by a firm providing a private personnel

service;

(9) refer an applicant to a place where the personnel service

has knowledge of the existence of a strike or lockout unless the

personnel service informs the applicant in writing of the strike

or lockout before the referral is made; or

(10) refer an applicant to employment harmful to the applicant's

health or morals if the personnel service has knowledge of the

harmful condition.

(b) An employer or a person seeking employment may not:

(1) make a false statement or conceal any material fact to

obtain an employee or employment by or through a personnel

service; or

(2) share or attempt to share with a person subject to this

chapter a fee paid or another payment made for the services of a

personnel service.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 6, eff. June 1,

2003.

Sec. 2501.102. IMPOSITION OF FEE PROHIBITED BEFORE EMPLOYMENT

OFFER ACCEPTED. Notwithstanding any refund policy, an owner,

operator, counselor, agent, or employee of a personnel service

may not impose a fee on an applicant until the applicant accepts

an offer of employment resulting from an employment referral made

by the personnel service.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 6, eff. June 1,

2003.

Sec. 2501.103. CHARGING OF FEE IN EXCESS OF CERTAIN AMOUNT

PROHIBITED IF EMPLOYMENT TERMINATED. An owner, operator,

counselor, agent, or employee of a personnel service may not

charge an applicant a fee that exceeds 20 percent of the

applicant's gross wages if:

(1) the employment accepted by the applicant as a result of a

referral by the personnel service lasts less than 30 days; and

(2) the applicant terminates the employment for good cause.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 6, eff. June 1,

2003.

SUBCHAPTER D. ENFORCEMENT

Sec. 2501.151. ENFORCEMENT. (a) The executive director shall

enforce Section 2501.102 and may investigate a personnel service

as necessary to enforce that section.

(b) The attorney general shall assist the executive director on

request.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 6, eff. June 1,

2003. Amended by Acts 2003, 78th Leg., ch. 816, Sec. 26.074, eff.

Sept. 1, 2003; Acts 2003, 78th Leg., ch. 1276, Sec. 14A.707, eff.

Sept. 1, 2003.

Sec. 2501.152. COMPLAINT AND INVESTIGATION. (a) A person may

file with the executive director a complaint alleging a violation

of Section 2501.102.

(b) On receipt of a complaint, the executive director shall

investigate the alleged violation and may:

(1) inspect any records relevant to the complaint; and

(2) subpoena those records and any necessary witnesses.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 6, eff. June 1,

2003. Amended by Acts 2003, 78th Leg., ch. 816, Sec. 11.002, eff.

Sept. 1, 2003; Acts 2003, 78th Leg., ch. 1276, Sec. 14A.707, eff.

Sept. 1, 2003.

Sec. 2501.153. HEARING. (a) If the executive director

determines as a result of an investigation that a violation of

Section 2501.102 may have occurred, the commission shall hold a

hearing.

(b) A hearing under this section shall be conducted in the

manner provided for a contested case under Chapter 2001,

Government Code.

violation after the hearing is concluded.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 6, eff. June 1,

2003. Amended by Acts 2003, 78th Leg., ch. 816, Sec. 11.003, eff.

Sept. 1, 2003.

Sec. 2501.154. SANCTIONS. (a) If, after a hearing, the

commission determines that a personnel service has violated

Section 2501.102, the commission may, as appropriate:

(1) issue a warning to the personnel service; or

(2) suspend or revoke the certificate of authority issued to the

personnel service.

(b) If, after a hearing, the commission determines that a

personnel service has violated Section 2501.102, the commission

may award the complainant an amount equal to the amount of the

fee charged by the personnel service.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 6, eff. June 1,

2003. Amended by Acts 2003, 78th Leg., ch. 816, Sec. 11.004, eff.

Sept. 1, 2003.

SUBCHAPTER E. CIVIL LIABILITY

Sec. 2501.201. LIABILITY FOR DAMAGES. (a) In this section,

"knowingly" means actual awareness of the act or practice that is

the alleged violation. Actual awareness may be inferred if any

objective manifestation indicates that the person acted with

actual awareness.

(b) A person who violates this chapter is liable to a person

adversely affected by the violation for:

(1) actual damages; or

(2) if the person adversely affected establishes that the

violation was committed knowingly, three times the amount of

actual damages.

subject to reduction by an amount equal to an amount awarded

under Section 2501.154 based on the same conduct.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 6, eff. June 1,

2003.

Sec. 2501.202. INJUNCTION AND OTHER REMEDIES. A plaintiff in an

action filed under Section 2501.201 may obtain:

(1) an order enjoining the defendant from violating this

chapter;

(2) any order necessary to restore to the plaintiff any property

acquired by the defendant in violation of this chapter; or

(3) other relief the court considers proper, including:

(A) the appointment of a receiver if the judgment against the

defendant is not satisfied within three months after the date of

the final judgment;

(B) the revocation of a certificate authorizing the defendant to

engage in business in this state; or

service.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 6, eff. June 1,

2003.

Sec. 2501.203. AWARD OF ATTORNEY'S FEES. (a) A plaintiff who

prevails in an action filed under Section 2501.201 is entitled to

receive court costs and reasonable and necessary attorney's fees.

(b) On finding that an action filed under Section 2501.201 is

groundless and was brought in bad faith or for the purpose of

harassment, the court may award court costs and reasonable

attorney's fees to the defendant.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 6, eff. June 1,

2003.

Sec. 2501.204. DECEPTIVE TRADE PRACTICE. A violation of this

chapter is a false, misleading, or deceptive act or practice

within the meaning of Section 17.46, Business & Commerce

Code, and any public or private right or remedy authorized by

Subchapter E, Chapter 17, Business & Commerce Code, may be

used to enforce this chapter.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 6, eff. June 1,

2003.

SUBCHAPTER F. PENALTIES

Sec. 2501.251. CRIMINAL PENALTY. (a) A person commits an

offense if the person knowingly violates this chapter.

(b) An offense under this section is a Class A misdemeanor.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 6, eff. June 1,

2003.

Sec. 2501.252. TRADE SECRET. A service file is a trade secret

for purposes of Section 31.05, Penal Code.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 6, eff. June 1,

2003.

Sec. 2501.253. ADMINISTRATIVE PENALTY. (a) In addition to the

amount awarded to a complainant under Section 2501.154(b), the

executive director may impose on the personnel service an

administrative penalty equal to two times the amount awarded

under that subsection. A penalty collected under this section

shall be deposited in the state treasury.

(b) A penalty imposed under this section is in lieu of a

criminal penalty provided by this chapter for a violation of

Section 2501.102.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 6, eff. June 1,

2003. Amended by Acts 2003, 78th Leg., ch. 816, Sec. 26.075, eff.

Sept. 1, 2003; Acts 2003, 78th Leg., ch. 1276, Sec. 14A.710, eff.

Sept. 1, 2003.

Sec. 2501.254. EFFECT ON OTHER REMEDIES AND ENFORCEMENT POWERS.

This chapter does not affect a public or private remedy or

enforcement power available under other law.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 6, eff. June 1,

2003.

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

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