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Bill

Bill

SB 263

Regards professional employer organizations and Unemployment Law

136th Legislature (2025-2026) Introduced by Kristina Roegner

SB 263 redefines Professional Employer Organization responsibilities under Ohio unemployment insurance law, adjusting cost allocation and claims procedures for workers covered through PEO arrangements.

Effective 9/17/26
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WeVote Research Nonpartisan
Bill Summary · SB 263

Legislative bill overview

SB 263 modifies Ohio's unemployment insurance laws as they apply to Professional Employer Organizations (PEOs). The bill adjusts how PEOs—companies that provide HR services and handle payroll for client businesses—are treated under the state's unemployment compensation system. This includes changes to employer responsibility, contribution requirements, and claims procedures involving PEO-covered workers.

Why is this important

PEOs serve thousands of Ohio small and medium-sized businesses by outsourcing HR functions, affecting tens of thousands of workers' unemployment insurance coverage and benefits. The specific regulatory treatment of PEOs directly impacts which entity bears unemployment costs when workers are laid off or between assignments, ultimately affecting both employer costs and worker eligibility for benefits.

Potential points of contention

  • Cost allocation uncertainty: Changes to which entity (PEO or client company) bears unemployment insurance costs could shift financial burdens, potentially making PEO services more or less attractive to businesses
  • Worker protections: Clarifying PEO responsibility may either strengthen or weaken protections for workers in determining benefit eligibility and claim processing
  • Administrative complexity: PEO arrangements already create multi-party relationships; regulatory changes could add compliance complexity or streamline it depending on implementation details

Compiled from official sources — confirm details with the bill’s official record.

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