Maryland 2023 Regular Session

Maryland House Bill HB1261 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1
2	2
3	3	EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
4	4	[Brackets] indicate matter deleted from existing law.
5	5	hb1261
6	6
7	7	HOUSE BILL 1261
8	8	K3, P2, Q3 3lr3048
9	9	CF SB 838
10	10	By: Delegate Valderrama
11	11	Introduced and read first time: February 17, 2023
12	12	Assigned to: Rules and Executive Nominations
13	13
14	14	A BILL ENTITLED
15	15
16	16	AN ACT concerning 1
17	17
18	18	Workplace Fraud and Prevailing Wage – Violations – Penalties and Referrals 2
19	19
20	20	FOR the purpose of establishing certain criminal penalties for employers knowingly failing 3
21	21	to properly classify individuals as employees and contractors and subcontractors 4
22	22	knowingly violating State prevailing wage laws; requiring the Commissioner of 5
23	23	Labor and Industry to refer to the Comptroller certain complaints that allege a 6
24	24	violation of certain tax laws under certain circumstances; and generally relating to 7
25	25	violations of the workplace fraud and State prevailing wage laws. 8
26	26
27	27	BY repealing and reenacting, with amendments, 9
28	28	Article – Labor and Employment 10
29	29	Section 3–909 and 3–910 11
30	30	Annotated Code of Maryland 12
31	31	(2016 Replacement Volume and 2022 Supplement) 13
32	32
33	33	BY adding to 14
34	34	Article – State Finance and Procurement 15
35	35	Section 17–227 16
36	36	Annotated Code of Maryland 17
37	37	(2021 Replacement Volume and 2022 Supplement) 18
38	38
39	39	SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 19
40	40	That the Laws of Maryland read as follows: 20
41	41
42	42	Article – Labor and Employment 21
43	43
44	44	3–909. 22
45	45
46	46	(a) An employer found to have knowingly failed to properly classify an individual 23
47	47	in violation of § 3–904 of this subtitle: 24 2 HOUSE BILL 1261
48	48
49	49
50	50
51	51	(1) shall be assessed a civil penalty of up to $5,000 for each employee who 1
52	52	was not properly classified; AND 2
53	53
54	54	(2) IS GUILTY OF A MISDE MEANOR AND ON CONVIC TION IS SUBJECT 3
55	55	TO A FINE NOT TO EXC EED $5,000 OR IMPRISONMENT NOT EXCEEDING 60 DAYS OR 4
56	56	BOTH FOR EACH EMPLOY EE WHO WAS NOT PROPE RLY CLASSIFIED . 5
57	57
58	58	(b) In determining the amount of the penalty TO BE ASSESSED UNDER 6
59	59	SUBSECTION (A)(1) OF THIS SECTION, the Commissioner or the administrative law judge 7
60	60	shall consider: 8
61	61
62	62	(1) the gravity of the violation; 9
63	63
64	64	(2) the size of the employer’s business; 10
65	65
66	66	(3) the employer’s good faith; 11
67	67
68	68	(4) the employer’s history of violations under this subtitle; and 12
69	69
70	70	(5) whether the employer: 13
71	71
72	72	(i) has been found, by a court or an administrative unit, to have 14
73	73	deprived the employee of any rights to which the employee would have been entitled under 15
74	74	a State protective labor law, including but not limited to: 16
75	75
76	76	1. any provision of this article; 17
77	77
78	78	2. the State prevailing wage law, under §§ 17–221 and 18
79	79	17–222 of the State Finance and Procurement Article; or 19
80	80
81	81	3. the living wage law, under § 18–108 of the State Finance 20
82	82	and Procurement Article; and 21
83	83
84	84	(ii) has made restitution and come into compliance with all such 22
85	85	State protective labor laws with respect to the employee. 23
86	86
87	87	(c) If the court or an administrative unit determines that an individual or class 24
88	88	of individuals is entitled to restitution as a result of the employer’s violation of § 3–904 of 25
89	89	this subtitle, the court or administrative unit: 26
90	90
91	91	(1) shall award each individual any restitution to which the individual may 27
92	92	be entitled; and 28
93	93
94	94	(2) may award each individual an additional amount up to three times the 29
95	95	amount of such restitution. 30 HOUSE BILL 1261 3
96	96
97	97
98	98
99	99	(d) An employer in violation of § 3–904 of this subtitle may be assessed double the 1
100	100	administrative penalties set forth in subsection [(a)] (A)(1) of this section if the employer 2
101	101	has been found previously to have violated this subtitle by a final order of a court or an 3
102	102	administrative unit. 4
103	103
104	104	(e) An employer who has been found by a final order of a court or an 5
105	105	administrative unit to have violated § 3–904 of this subtitle three or more times may be 6
106	106	assessed an administrative penalty of up to $20,000 for each employee. 7
107	107
108	108	(f) (1) An employer may be assessed civil penalties under this section or § 8
109	109	8–201.1 or § 9–402.1 of this article by only one final order of a court or administrative unit 9
110	110	for the same actions constituting a violation of this subtitle. 10
111	111
112	112	(2) Notwithstanding paragraph (1) of this subsection, an employer may be 11
113	113	ordered to make restitution, pay any interest due, and otherwise comply with all applicable 12
114	114	laws and regulations by orders of a court and all relevant administrative units, including 13
115	115	the Comptroller, the Office of Unemployment Insurance, the Insurance Administration, 14
116	116	and the Workers’ Compensation Commission. 15
117	117
118	118	(g) Any penalty issued under SUBSECTION (A)(1) OF this section against an 16
119	119	employer shall be in effect against any successor corporation or business entity that: 17
120	120
121	121	(1) has one or more of the same principals or officers as the employer 18
122	122	against whom the penalty was assessed, unless the principal or officer did not or with the 19
123	123	exercise of reasonable diligence could not know of the violation for which the penalty was 20
124	124	imposed; and 21
125	125
126	126	(2) is engaged in the same or equivalent trade or activity. 22
127	127
128	128	3–910. 23
129	129
130	130	(A) As authorized by State and federal law, units within the Maryland 24
131	131	Department of Labor and the Department of Budget and Management, the Secretary of 25
132	132	State, the Comptroller, the Maryland Insurance Administration, and other State agencies 26
133	133	shall cooperate and share information concerning any suspected failure to properly classify 27
134	134	an individual as an employee. 28
135	135
136	136	(B) ON A SHOWING BY CLEAR AND CONVINCING EVIDE NCE THAT A 29
137	137	VIOLATION OF § 3–904 OF THIS SUBTITLE HAS OCCURRED AND AS AUTH ORIZED BY 30
138	138	FEDERAL AND STATE LAW , THE COMMISSIONER SHALL RE FER TO THE 31
139	139	COMPTROLLER ANY COMPL AINT THAT ALLEGES A VIOLATION OF § 13–1007 OR § 32
140	140	13–1024 OF THE TAX – GENERAL ARTICLE. 33
141	141
142	142	Article – State Finance and Procurement 34
143	143	4 HOUSE BILL 1261
144	144
145	145
146	146	17–227. 1
147	147
148	148	(A) IN ADDITION TO ANY OT HER PENALTIES AUTHOR IZED UNDER THIS 2
149	149	SUBTITLE, A CONTRACTOR OR SUBC ONTRACTOR FOUND TO H AVE KNOWINGLY 3
150	150	VIOLATED THIS SUBTIT LE IS GUILTY OF A MI SDEMEANOR AND ON CONVIC TION IS 4
151	151	SUBJECT TO A FINE NO T TO EXCEED $5,000 OR IMPRISONMENT NOT EXCEEDING 60 5
152	152	DAYS OR BOTH FOR EAC H VIOLATION. 6
153	153
154	154	(B) ON A SHOWING BY CLEAR AND CONVINCING EVIDE NCE THAT A 7
155	155	VIOLATION OF THIS SU BTITLE HAS OCCURRED , THE COMMISSIONER SHALL REFER 8
156	156	TO THE COMPTROLLER ANY COMPL AINT THAT ALLEGES A VIOLATION OF § 13–1007 9
157	157	OR § 13–1024 OF THE TAX – GENERAL ARTICLE. 10
158	158
159	159	SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 11
160	160	October 1, 2023. 12
161	161