DAN MORALES

.ATTTORSEY GESERAL 

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Honorable 0. H. “Ike”Harris Chair Committee on State Affairs Texas State Senate P.O. Box 12068 Austin, Texas 78711 August 12,1993 Opinion No. DM-243
Re: Whether a person who provides “common workers” to “third party users” under V.T.C.S. article 522la-10 is an employer for purposes of providing workers ’ compensation and unemployment

insuranw (RQ-540) Dear senator Hanis: Article 522la-10, V.T.C.S. (the “act”), adopted in 1991. imposes licensing and other requirements on persons who provide “common workers” to “third party users.” Acts 1991, 72d Leg., ch. 480, at 1708. You ask whether a such a peraon is the

“employer” of a common worker for purposes of providing workers ’ compensation and unemployment insurance. You ask this question with respect to two time periods: September 1. 1991 to December 31, 1991, and January 1, 1992 to the present. We conclude that a person who provides “common workers” to “third party users” is an employer of such common workers under the act and is responsiblefor providingworkers ’ compensation and unemployment insurance during both time periods, to the extent required of employers by other law. Before answeringyour question we briefly examine the ads provisions. Section 2 of the act provides in pertinent part:

DEPINITIONS. In this Act:

. . (2) “Common worker” means an individual who performs labor involvingphysical tasks that do not require a particular skill, training in a particular occupation, craft, or trade, or practical knowledge of the principlesor processes of an art, science, cm& or trade.

. . (8) “Temporary common worker agent” or “temporary ccmtnon worker agency” means a temporary common worker employer. (9) ‘Temporary common worker, employer” means a person dial provides common worker empIoy?es to a thirdpar@ user.

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(10)“Thirdparlyuser”meansapersonwhousesthesavicesofa wmmon worker provided by a temporary common worker employer. p3nphasisadded.J Section 4 provides that a person must have a license to operate as a “temporary wmmon worker employer” in the state., Section 5 provides for the issuance of licenses by the Department of Licensing and Regulation. Section 6 places various duties and restrictions on “license holders.” It limits the charges that may be imposed on wmmon workers and the deductions that may be made &nn their wages; establishesconditions for the premises on which wmmon workers wait for assignments; provides that the license holder is an
“employer” ;and establishesrecord keepingrequirements. Section 7 exempts certain entities firornthe req&ements of the Ilct, including

“temporary skilled labor age% ” “employee leasing en&i*” “labor union hbing halls” andI3 overmental programs. Section 8 governs wncurrent mgulation of license holders by municipaIitiu or other govemmed sltbdivisions. Section 9 provides for annual Iicuue tknewal. Section 10 provides penalties for violations of the act and administrative ndesorordaradoptedtbaamda. Sections 11 and 12, which 8ppear to have prompted your requw govern the el%cdvedatesofdiEerentpartsoftheact. Section 11 providesthat”aperaonisnot requircdtoobuinalicaw”untilJunrary1.1992,~tbottbedepprtmaamust~o~ ruleaforadministeringtheactbythatdate.* Section12providesthattheacttakesetFect sepader 1,199l. “except that section!j 4 and 10 take e!Ibct January 1.1992. ” wrthrrspecttoywquestions,wefintaddnssthetimepaiodJanuary1.l992to the present. We wnchde that a person who operates as a “temporary wmmon worker employer,” i.e.. a person who provides commonworker anployees to a third party user, is the anployer of the wmmon worker employees for this period. This is the clear import of subsection (0 of section 6. which provides:

A license holder is the employer of the common worker. A license holdermayhire,reassign,wntro~direo&anddischargethelicense holder% empIoyeea. Section 4 of the act prohibii a person who opemtes as a temporary common worker employer &om doing so without a License. Thus, we conclude that a temponuy common worker employer has au of the responsibiities to his employees attendant with the employe&mployee relationship, including the obligation to provide workers ’ wmpensation or unemployment insurance to the extmt imposed on employers by other law. &e, e.g., V.T.C.S. art. 8308-3.23 (“employer”election to obtain workers ’wmpensation wverage for employees); art. 522%5 (“employer”unemploymentinsurance contributions).

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Our wnchtsion is no di&rent for the time period from September 1, 1991 to Dewmbu 3 1.1991. Section 11 delays the.effective date of section 4, the provision which requires a person who operates as a “temporary wtnmon worker employer” to obtain a license, and section 10, the provision which provides crimimdpenalties for violations of the act. It does not delay the eSbctive date of any other provision, inchtdingthe various requirements set forth in section 6. As noted above, under section 6, s§ion (f), a liwnse holder, a person who operate-s as a “temporary common worker employer,” is the employer of the commonworker employeeswhich he or she provides to third party users. We beliewe

that such a person was an employer during this time period even though he or she was not required to obtain a licenseuntil January 1, 1992, and therefore may not have had a license and bear a kense holder until that date. The requirements of section 6 are obviously intended to apply to ah persons who operate as “temporary wtnmon worker employerq” not just those who have obtained licenses. This reading is consistent with section1oftheactwhichde&resthatitis”~ to provide for the health, safety and weBire of workers throughout the state” and that the act “shah be carried out in accordanw with this putpose. ” Awordingly, we wnchde that since September 1, 1991, a person who has provided wnunon workers to third party users has been the “employer”of those common workers under article 5221a-10,V.T.C.S., regardless whether he or she obtained a Ihnse as r@red by the act. Therefore, such a person has been responsible for providing workers ’ wmpensation and unemployment itwtam ikom September 1.1991 to the present, to the extent requhed of employersby other law.

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## SUMMARY SinccSqtmberI. 1991,apuaonw&ohprovickdwmmon workeratotbirdpulylJK!lahasbeenthc”anployeFofthosc wmmon workers tmda V.T.C.S. article 5221a-10, rqadkss whetherhcoraheobtaiacdalicuue8srequiredbythcact. Stir person has been rcsponiik for proidbg workers ’compensation and UMnploymen- fromseptrmbsr1,1991tothepresem,to theexte4ltqliredofanployersbyothcrkw.

DAN MORALES AttOlIK!yGGlIdOfTtX&? WlLL PRYOR FhtAsaktaaAttonteyGateral MARYKELLER Deputy Attomey General fbr Litigation RENEAHlcKs state solkitor MADELEINE B. JOHNSON Chair, Opiion Committee

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