(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.

(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;

(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;

(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;

(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) 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;

(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.