Payroll providers would obtain bonds sized to estimated payroll taxes

Payroll service providers would have to offer a business client the option to hold the client's funds in an insured bank account owned by the client. This applies to payroll service providers and their business clients. The account must be insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund. The requirement would take effect July 1, 2026, if the bill becomes law.

Payroll service providers would have to obtain a performance bond equal to a business client's total annual estimated payroll taxes. The bond amount is measured against a business client's total annual estimated payroll taxes. This requirement would take effect July 1, 2026, if the bill becomes law.