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.