Sen. Settle files bill amending North Carolina Senate’s Professional Employer Organization Act

A new bill filed by Sen. Settle seeks to update financial definitions and licensing requirements within the Professional Employer Organization Act to improve regulatory clarity and oversight, according to the North Carolina State Senate.

The bill, filed as SB 268 on March 12 during the 2025 regular session, was formally listed with the short title: ‘Amend NC PEO Act.-AB’

The following is our breakdown, based on the actual bill text, and may include interpretation to clarify its provisions.

In essence, this bill enacts various amendments to the North Carolina Professional Employer Organization Act as recommended by the Department of Insurance. Key changes include the clarification of financial definitions such as “audited GAAP financial statement,” “tangible net worth,” and “working capital.” It permits multiple PEOs under common control to be licensed as a group, given each guarantees the obligations of others within the group. The application process now requires full biographical details of controlling individuals, an audited GAAP financial statement, and fingerprints for background checks. Applicants must demonstrate a tangible net worth of at least $50,000 and positive working capital, although alternative audited statements may be accepted at the Commissioner’s discretion. The bill also defines grounds for license denial, such as non-disclosure of material facts or financial irresponsibility. It offers a process for denial review and permits affirmative defenses regarding the dismissal of controlling individuals. The act becomes effective upon becoming law and applies to license applications or renewals submitted thereafter.

Of the three sponsors of this bill, Todd Johnson proposed the most bills (28) during the 2025 regular session.

Bills in North Carolina follow a multi-step process before becoming law. A lawmaker starts by filing a bill, which is assigned to a committee for review. The bill must be read three times in each chamber. If one chamber changes the bill after the other passes it, both must agree on the final version. Once both chambers approve the same bill, it goes to the governor, who has 10 days (or 30 if the legislature is not in session) to sign, veto, or let it become law without a signature.

You can read more about the bills and other measures here.

Settle graduated from Wilkes Community College in 1979 with an AA.

Settle, a Republican, was elected to the North Carolina State Senate in 2023 to represent the state’s 36th Senate district, replacing previous state senator Paul Newton.