Senate subcommittee weighs PEO regulation after witnesses warn of possible workers'‑comp coverage gaps

State Senator Randy Robertson presiding over the Insurance and Labor subcommittee recommended further work and signaled he would ask the full committee to consider House Bill 250 after testimony that split over whether the measure protects workers or risks a new coverage gap.

Representative Sheryl Taylor introduced HB250, saying the bill would define "professional employer organizations," require registration and fees, and give state regulators tools to identify legitimate operators and remove bad actors. "This is a Small Business Act," Taylor said, presenting the bill as a way to bring clarity to an industry that provides payroll, benefits and human‑resources services to small employers.

John Walraven, introduced by Taylor, told the subcommittee PEOs perform outsourced HR functions—"it's like outsourcing HR"—and argued that requiring registration, financial standards and reporting would join Georgia with more than 40 other states that regulate PEOs. "This will help the industry identify the good actors from bad actors," Walraven said, describing language in the substitute that would allow the insurance commissioner to revoke registrations in cases of malfeasance.

Industry testimony drew direct questions about workers' compensation. Michael Kreider, who said he represents Insperity, described PEOs as a way for small businesses to access benefits and compliance services they cannot otherwise afford. "PEOs help small businesses grow faster and retain employees," Kreider said, and told senators the substitute mirrors model language used elsewhere and would not "upend" existing law.

Dustin Osborne, a workers'‑compensation defense attorney, told the committee the bill clarifies relationships that already exist in practice and treats both the PEO and the client as employers for workers'‑compensation purposes, while leaving vertical liability rules in construction intact. "It provides the predictable structure that aligns responsibility with how the relationships are meant to operate on a day‑to‑day basis," Osborne said, adding the bill is tailored to PEO relationships and is not intended to replace OCGA 34‑9‑8.

Not all testimony was reassuring. Bobby Potter, who said he chairs the State Board's Advisory Council for workers' compensation matters, said the bill still permits PEO master policies to cover only listed or "covered" employees, leaving others—particularly construction or high‑risk field workers—outside the PEO's coverage. Potter described a hypothetical in which a worker who was injured on Wednesday would not appear on a PEO's payroll report until Friday and could be excluded from coverage. "That's the coverage gap," Potter said, urging that if a PEO covers any client employees it should cover them all, or otherwise that the statute be revised to avoid leaving injured workers without coverage.

Committee members and sponsors acknowledged multiple LC versions were circulating and that the next‑to‑last page of the substitute contains six NCCI‑approved lines intended to clarify exclusive remedy language and preserve compliance obligations. Chair Robertson said he appreciated the concerns and would reach out to the chair of the full Insurance Committee to recommend calling HB250 up after the drafting questions are resolved.

The subcommittee did not vote on HB250. Members asked staff to reconcile competing LC versions and said they would continue talks to insert clarifying language and address the coverage‑gap concerns raised by the State Board's advisory council; the committee adjourned without taking formal action.