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(1) A person may not:
(a) offer or provide a professional employer service if the person is not licensed under this chapter;
(b) use one of the following names if the person is not licensed under this chapter:
(i) "administrative employer";
(ii) "employee leasing";
(iii) "PEO";
(iv) "professional employer organization";
(v) "staff leasing"; or
(vi) other name that represents the provision of a professional employer service;
(c) knowingly provide false or fraudulent information to the commissioner:
(i) in conjunction with an application to be licensed or to renew a license under this chapter; or
(ii) in a report required under this chapter;
(d) knowingly make a material misrepresentation to the commissioner or other governmental agency;
(e) fail to make a filing with a state agency that is required by this chapter or the professional employer agreement within 30 days of the day on which the filing is due;
(f) fail to make a payment to a state agency that is required by this chapter or the professional employer agreement within 30 days of the day on which the payment is due;
(g)
(i) offer a covered employee a self-funded medical plan unless the self-funded medical plan is maintained for the sole benefit of covered employees;
(ii) misrepresent that a self-funded medical plan it offers is other than self-funded; or
(iii) offer to a covered employee a self-funded or partially self-funded medical plan without delivering to a plan participant a summary plan description that accurately describes the terms of the plan, including disclosure that the plan is self-funded or partially self-funded;
(h) subject to Subsection (2), divert to another purpose or use other than as designated funds paid by a client to the professional employer organization and designated for:
(i) compensation of a covered employee;
(ii) a benefit of a covered employee;
(iii) a payroll-related tax;
(iv) an unemployment insurance contribution;
(v) withholding of compensation for a covered employee;
(vi) a workers' compensation premium; or
(vii) another assessment paid by a professional employer organization to or on behalf of a covered employee under a professional employer agreement;
(i) provide a covered employee to a client under a provision, term, or condition that is not contained in a professional employer arrangement between the professional employer organization and client;
(j) engage in a willful, fraudulent, or deceitful act that:
(i) is by a professional employer organization, caused by a professional employer organization, or at a professional employer organization's direction; and
(ii) causes material injury to a client or covered employee;
(k) fail to comply with a federal law or state law, to the extent state law is not preempted by federal law, regarding an employee benefit offered to an employee; or
(l) willfully or recklessly violate this chapter or an order or rule issued by the commissioner under this chapter.
(2) If a client defaults on a professional employer agreement or otherwise fails to pay a professional employer organization, the professional employer organization is not in violation of this section if the professional employer organization allocates the deficient payment to the portions of an invoice.