Bill > HB1795

This bill, known as the Payroll Bond Act, requires payroll processors (companies that handle payroll services like issuing checks and filing tax reports) to annually provide proof of financial protection to the Pennsylvania Department of Revenue. Specifically, payroll processors must obtain either a fidelity bond, employee dishonesty bond, third-party fidelity coverage, or liability insurance with crime coverage, in an amount up to $5,000,000 or twice their highest weekly payroll from the previous year. Additionally, they must secure a surety bond between $50,000 and $500,000 that covers potential tax and unemployment insurance payment shortfalls, with the Secretary of Revenue designated as the payee. The bond must run continuously and cover the highest three-month volume of tax and insurance payments processed. Surety companies must notify the Secretary if the bond is canceled, with a 30-day notice period. Payroll processors who fail to maintain sufficient bonding will face penalties, including a $1,000 fine for the first offense and $5,000 for subsequent offenses, with all collected fines deposited into the state's General Fund. The act will take effect 60 days after passage.

Labor and Employment

https://www.legis.state.pa.us/cfdocs/billinfo/bill_history.cfm?syear=2025&sind=0&body=H&type=B&bn=1795