DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part of the
legislative instrument. The keyword, one-liner, abstract, and digest do not constitute part of the law
or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
HB 397 Original 2020 Regular Session Landry
Abstract: Increases the administrative penalties for employers who misclassify employees and fail
to pay unemployment insurance contributions.
Present law provides that when it is discovered that an employer has not properly classified
employees and has failed to pay contributions, that he shall receive a written warning if there is
evidence that his failure to properly classify and pay contributions was not knowing or willful.
Proposed law deletes present law regarding the written warning and instead provides that upon an
initial investigation through which it is determined that an employer has knowingly and willfully
misclassified employees, in addition to any contributions, interest, and penalties otherwise due, the
administrator may assess an administrative penalty of up to $5,000 per employee.
Present law provides that upon a second offense of misclassification, the administrator shall assess
a penalty of up to $250 for each misclassified employee, in addition to the contributions, interest,
and penalties owed.
Proposed law changes the penalty for a second offense from up to $250 to up to $10,000 per
misclassified employee in addition to the contributions, interest, and penalties owed.
Present law provides that upon a third and subsequent offense of misclassification, the administrator
shall assess a penalty of up to $500 for each misclassified employee, in addition to contributions,
interest, and penalties previously owed.
Proposed law changes the penalty for a second offense from up to $500 to up to $25,000 per
misclassified employee in addition to the contributions, interest, and penalties owed.
Present law requires that the administrator, in determining the amount of penalties, consider previous
violations, the seriousness of the violation, the good faith of the employer, and the size of the
business. Proposed law retains present law.
Present law provides that upon a subsequent offense of misclassification, the administrator shall
assess a penalty between $100 and $1,000 or imprisonment between 30 and 90 days or both, for each
misclassified employee, in addition to contributions, interest, and penalties previously owed.
Proposed law provides that in addition to any penalties assessed for a second or subsequent offense,
an employer is ineligible to receive any state tax rebates to which he is otherwise entitled. Proposed law changes the penalty for a subsequent offense from a fine between $100 and $1,000 or
imprisonment between 30 and 90 days or both to a fine up to $50,000 and imprisonment of not more
than 90 days, per misclassified employee in addition to the contributions, interest, and penalties
owed.
(Amends R.S. 23:1711(G)(1))