What is a Texas Professional Employer Organization Bond?

Understand what a Professional Employer Organization Bond is today!

Texas Professional Employer Organization BondA Professional Employer Organization (PEO) Bond is a requirement of the Texas Department of Licensing and Regulations in accordance with the provisions of Chapter 91 of the Texas Labor Code.

The surety bond is needed to ensure that if the PEO violates any of the conditions, the Texas Department of Licensing and Regulations can make a claim on the bond for the benefit of the aggrieved person.

A Professional Employer Organization (PEO) is a co-employer of various companies by means of providing a complete human resource service that includes handling payroll, tax remittance, and employee benefits among others.


What is the bond amount?

The surety bond amount will depend on the number of employees the Professional Employer Organization (PEO) has.




Less than 250 employees$50,000
250-750 employees$75,000
750 employees or more$100,000


What are the bond conditions?

  • The Professional Employer Organization Bond is a legally binding agreement between these three parties:

Principal – Professional Employer Organization (PEO)

Obligee – The Texas Department of Licensing and Regulation

Surety – surety bond company

  • The bond should be made payable to the Texas Department of Licensing and Regulation
  • The bond will remain valid until canceled. In the case of cancellation, a 60-day notice is required.


How can I acquire this type of bond?

You can obtain this Professional Employer Organization license requirement by seeking the assistance of a surety bond company. The surety bond company should be licensed to conduct business in Texas. A surety bond agent will assist you in the entire bond process starting with the Professional Employer Organization Bond application.

You will go through the prequalification stage wherein an underwriter will evaluate your financial history, business performance history, and your credit score.

Once qualified, the surety bond company will prepare your bond by completing the Professional Employer Organization Bond form. Your surety bond will be sent to you for submission.


What are the PEO license requirements?

Aside from the surety bond, you need to do the following:

  • Submit a completed Professional Employer Organization license application form
  • Submit a completed Controlling Person Personal Information Form (Form #003) for each Controlling Person. A controlling person is someone who:
  • Has direct or indirect control of 25 percent or more of the voting securities of a PEO corporation
  • Has the authority to set policy and direct management of a PEO company
  • Is employed, appointed, or authorized by a PEO company
  • An officer or director of a PEO corporation or a general partner of a partnership
  • Submit a Controlling Corporation Corporate Information Form (Form #005) for corporations that have a controlling interest in the Professional Employer Organization company.
  • Pay the necessary application fee

$300: 0 – 249 employees

$450: 250 – 749 employees

$700: 750 or more employees

Do you need this bond immediately? Call today!

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