Personnel Employment Services Frequently Asked Questions

GENERAL PROGRAM QUESTIONS
  1. What law governs personnel employment services?
  2. Is there a difference between “personnel service” and “personnel employment service”?
  3. Who qualifies as a “Personnel Service” or a “Personnel Employment Service” under the Act?
  4. Are there any exceptions under the Act?
  5. Who is required to have a certificate of authority under the Act? Are there any exceptions?

1. What law governs personnel employment services?

Texas Occupations Code Chapter 2501, the Personnel Services statute (“Act”), governs personnel employment services.

2. Is there a difference between “personnel service” and “personnel employment service”?

No. TDLR uses the terms interchangeably.

3. Who qualifies as a “Personnel Service” or a “Personnel Employment Service” under the Act?

The Act applies to any person who offers or attempts to find permanent employment for an applicant or finds or attempts to find a permanent employee for an employer. It does not matter whether or not the person charges a fee for this service.

The Act also applies to a person who advertises as:

  • an executive search or consulting service;
  • an out-placement service;
  • an overseas placement service;
  • a job listing service;
  • a personnel consulting service; or
  • a resume service that provides job market investigation, research, or evaluation.

4. Are there any exceptions under the Act?

The Act does not apply to:

  • a personnel service operated by the United States, the State of Texas, or a municipality of Texas;
  • 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;
  • a labor union; or
  • a professional counselor licensed under Texas Occupations Code Chapter 503.

5. Who is required to have a certificate of authority under the Act? Are there any exceptions?

Any person that owns a personnel employment service that operates in Texas must have a certificate of authority issued by TDLR, except management search consultants.

A “management search consultant” is defined in the Act as a type of personnel employment service that:

  • is retained by, acts solely on behalf of, and is compensated only by an employer; AND
  • does not directly or indirectly collect a fee from an applicant as payment for a service performed by the personnel service.

Personnel employment services that qualify as management search consultants do not have to obtain a certificate of authority from TDLR, although they must still comply with all other provisions of the Act.

LICENSING QUESTIONS
  1. Do I need a “license” or a “certificate of authority”?
  2. How much does it cost to obtain a certificate of authority?
  3. For how long is a certificate of authority valid?
  4. What are the requirements to obtain a certificate of authority?
  5. What are the financial security requirements for a personnel employment service?
  6. How do I obtain a surety bond?
  7. What are the requirements for using a surety bond?
  8. How do I submit the cash deposit?
  9. How long do I have to maintain the financial security?
  10. Do I have to post a certificate of authority at each location where my personnel employment service operates?
  11. How do I obtain a duplicate certificate of authority from the Department?
  12. How do I change my address on my certificate of authority?

1. Do I need a “license” or a “certificate of authority”?

TDLR issues “certificates of authority” for personnel employment services as required by the Act. A certificate of authority allows a personnel employment service to operate in Texas. Certificates of authority are similar to licenses or registrations issued under other TDLR programs.

2. How much does it cost to obtain a certificate of authority?

The initial certificate of authority fee is $75.

3. For how long is a certificate of authority valid?

A certificate of authority is valid for a one-year period from the date of issue. 

4. What are the requirements to obtain a certificate of authority?

To obtain an initial certificate of authority, you must provide TDLR with all of the following required information, using the most recent TDLR forms available:

  • A completed application form;
  • A certificate of account status, if applicable;
  • Proof of financial security; and
  • Initial certificate of authority fee of $75.

The forms and instructions are located on the website under Personnel Employment Services Forms.

5. What are the financial security requirements for a personnel employment service?

A personnel employment service must submit one of the following forms of financial security:

  • A surety bond for $5,000; or
  • A cash deposit of $5,000.

6. How do I obtain a surety bond?

You should contact an insurance company or a bonding company to obtain a surety bond. You can search the Texas Department of Insurance website or call 1-800-578-4677 (Texas only) or 512-463-6169 to find out if a specific insurance or bonding company is authorized to write bonds.

7. What are the requirements for using a surety bond?

A surety bond must:

  • be issued by a surety company authorized to do business in the state of Texas;
  • conform to the Texas Insurance Code;
  • be on a TDLR-approved form; and
  • be payable to the state on behalf of aggrieved persons.

The Personnel Employment Services Bond (Form #001 PES) is located on the website under Personnel Employment Services Forms.

8. How do I submit the cash deposit?

The cash deposit of $5,000 shall be submitted as an irrevocable assignment of security issued by a national or state bank or savings and loan association, subject to the express approval of the Executive Director of TDLR. To file an assignment of security with TDLR, please use the Assignment of Security (Form #003 PES) located on the website under Personnel Employment Services Forms.

9. How long do I have to maintain the financial security?

A personnel employment service must maintain the financial security for the entire time the company continues to do business in this state plus an additional two years after the company ceases to operate as a personnel employment service in this state.

When a personnel employment service applies for a new or renewal certificate of authority, it must submit proof of financial security to TDLR that will cover the one-year period for the certificate of authority plus two years after the certificate of authority expires.

10. Do I have to post a certificate of authority at each location where my personnel employment service operates?

Yes. Each location must post an original certificate of authority or a duplicate certificate of authority obtained from the Department. The fee for each duplicate certificate of authority is $25.

11. How do I obtain a duplicate certificate of authority from the Department?

Send a check or money order in the amount of $25 payable to TDLR with a written request for a duplicate certificate of authority to: Texas Department of Licensing and Regulation, P.O. Box 12157, Austin, TX 78711-2157.

12. How do I change my address on my certificate of authority?

You will need to submit a written request, the original Certificate of Authority, and a $25 fee to: Texas Department of Licensing and Regulation, P.O. Box 12157, Austin, Texas 78711-2157.

RENEWAL QUESTIONS
  1. How often is a Personnel Employment Service required to renew its certificate of authority?
  2. How much does it cost to renew my certificate of authority?
  3. What are the requirements to renew a certificate of authority?
  4. Do I have to submit financial security documents upon renewal every year?
  5. My certificate of authority has expired. What do I do to get it back?

1. How often is a Personnel Employment Service required to renew its certificate of authority?

In order for a personnel employment service to lawfully continue operating in Texas, a certificate of authority must be renewed annually. A certificate of authority is valid for a period of one year from the date of issue.

2. How much does it cost to renew my certificate of authority?

The renewal fee for a certificate of authority is $75.

3. What are the requirements to renew a certificate of authority?

To renew your certificate of authority, you must provide TDLR with all of the following required information, using the most recent TDLR forms available:

  • A completed application form;
  • A certificate of account status, if applicable;
  • Proof of new or continuing financial security; and
  • Renewal certificate of authority fee of $75.

The forms and instructions are located on the website under Personnel Employment Services Forms.

4. Do I have to submit financial security documents upon renewal every year?

Yes. Every year a personnel employment service must submit proof of new or continuing financial security coverage. The financial security must be for the term of the renewed certificate of authority plus an additional two years.

5. My certificate of authority has expired. What do I do to get it back?

You must submit a renewal application, all required attachments, and the appropriate late renewal fees:

  • 1 - 90 days after expiration: $112.50.
  • 91 days – less than 1 year after expiration: $150.00.

If your certificate of authority has been expired for one year or more, you may not renew your certificate of authority. You must reapply for a new certificate of authority.

If your renewal application is received postmarked before your expiration date, it is considered a timely renewal.

COMPLIANCE QUESTIONS
  1. My personnel employment service qualifies as a “management search consultant” under the Act.  Am I required to obtain a certificate of authority? Am I still required to comply with the rest of the Act?
  2. Do I have to post a certificate of authority at each location where my personnel employment service operates?
  3. Do I need to file a bond for each location where my personnel employment service operates?
  4. Are there any prohibitions regarding operating a personnel employment service in Texas that I should be aware of?
  5. I own a personnel employment service. Are there any restrictions on the fees I can charge applicants?

1. My personnel employment service qualifies as a “management search consultant” under the Act.  Am I required to obtain a certificate of authority? Am I still required to comply with the rest of the Act?

Since your company qualifies as a management search consultant, you are not required to obtain a certificate of authority; however, you are required to comply with all other provisions of the Act.

2. Do I have to post a certificate of authority at each location where my personnel employment service operates?

Yes. Each location must post an original certificate of authority or a duplicate certificate of authority obtained from the Department. The certificate of authority must be displayed in a prominent place in each location at which the personnel employment service operates its business on a daily basis.

3. Do I need to file a bond for each location where my personnel employment service operates?

No.  An owner of a personnel employment service may satisfy the financial security requirements by filing one bond for the personnel employment service with TDLR, regardless of the number of locations at which the personnel employment service operates its business on a daily basis.

4. Are there any prohibitions regarding operating a personnel employment service in Texas that I should be aware of?

Yes.  A list of prohibited practices is found under Occupations Code Section 2501.101, Prohibited Practices. Please note that this list applies to the owner, operator, counselor, agent, or employee of a personnel employment service.

5. I own a personnel employment service. Are there any restrictions on the fees I can charge applicants?

Yes. You are prohibited from charging a fee to the applicant before the applicant accepts an employment offer from a referral made by your personnel employment service. You are also prohibited from charging an applicant a fee that exceeds 20 percent of the applicant's gross wages if the employment is terminated under certain conditions.

For additional information about charging fees, see Occupations Code Section 2501.102, Imposition of Fee Prohibited Before Employment Offer Accepted; and Occupations Code Section 2501.103, Charging of Fee in Excess of Certain Amount Prohibited if Employment Terminated.

CONSUMER PROTECTION QUESTIONS
  1. How can I find out if a Personnel Employment Service has a certificate of authority?
  2. How do I get a list of all Personnel Employment Services that have certificates of authority from the Department?
  3. Are there any restrictions on the fees a personnel employment service can charge me?
  4. Are there any other consumer protections for applicants who are using a personnel employment service to find a job?

1. How can I find out if a Personnel Employment Service has a certificate of authority?

To find out if a personnel employment service has a certificate of authority, you may search the Licensing Database on the TDLR website. You may also call TDLR at 1-800-803-9202 (Texas only) or 512-463-6599, and speak with a customer service representative.

Please note that under the Act not all personnel employment services are required to obtain certificates of authority. “Management search consultants,” who work on behalf of the employer and who do not charge fees to the applicants, are not required to obtain a certificate of authority. These companies will not appear in the Licensing Database.

2. How do I get a list of all Personnel Employment Services that have certificates of authority from the Department?

To get a list of all Personnel Employment Services that have a certificate of authority, you may search the Licensing Database on the TDLR website.  You may click on “Download License files” near the top of the page or select “Personnel Employment Services” as the license type under “Inquire by License Type.”

Please note that under the Act not all personnel employment services are required to obtain certificates of authority. “Management search consultants,” who work on behalf of the employer and who do not charge fees to the applicants, are not required to obtain a certificate of authority. These companies will not appear in the Licensing Database.

3. Are there any restrictions on the fees a personnel employment service can charge me?

Yes. A personnel employment service is prohibited from charging you a fee before you accept an employment offer from a referral made by the personnel employment service. The personnel employment service is also prohibited from charging you a fee that exceeds 20 percent of your gross wages if the employment is terminated under certain conditions.

4. Are there any other consumer protections for applicants who are using a personnel employment service to find a job?

Yes. A list of prohibited practices is found under Occupations Code Section 2501.101, Prohibited Practices. Please note that this list applies to the owner, operator, counselor, agent, or employee of a personnel employment service. 

ENFORCEMENT QUESTIONS
  1. How do I file a complaint against a personnel employment service?
  2. How do I find out if a Personnel Employment Service has been assessed penalties or sanctions for violating the Act or the rules?

1. How do I file a complaint against a personnel employment service?

To file a complaint, you may:

2. How do I find out if a Personnel Employment Service has been assessed penalties or sanctions for violating the Act or the rules?

To get a list of final enforcement actions against all Personnel Employment Services, you may search the Administrative Orders on the TDLR website. Select “Personnel Employment Services” as the license type.

HOW TO STAY INFORMED ON PROGRAM CHANGES
  1. How may I receive notification of new and changing information from your department?
  2. Who do I contact if I have questions regarding the regulation of personnel employment services in Texas?

1. How may I receive notification of new and changing information from your department?

You may sign up on the TDLR E-mail Subscriber Notification Lists on our website. These lists were established to allow subscribers to receive automated notification of new and changing information.

2. Who do I contact if I have questions regarding the regulation of personnel employment services in Texas?

Questions may be directed to TDLR at personnel.employment.services@tdlr.texas.gov.

 

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