Relating to the regulation of professional employer organizations.

SB 1254 regulates professional employer organizations (PEOs) in Texas by requiring them to hold valid licenses to provide payroll and employee benefits services. The bill establishes a 18-month grace period after a license expires during which PEOs may continue serving covered employees, but they lose this status and face penalties if they continue operating beyond that period without renewal. It also expands disciplinary actions against PEOs that provide services without a current license or while their license is expired, suspended, or inactive. This law directly affects PEOs operating in Texas, requiring them to maintain active licensing to legally provide these services.