Texas 2011 - 82nd Regular

Texas House Bill HB2989 Compare Versions

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1	1	82R19592 RWG-F
2	2	By: Deshotel H.B. No. 2989
3	3	Substitute the following for H.B. No. 2989:
4	4	By: Quintanilla C.S.H.B. No. 2989
5	5
6	6
7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to establishing the Workplace Fraud Prevention Act;
10	10	providing penalties.
11	11	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	12	SECTION 1. Subtitle B, Title 4, Labor Code, is amended by
13	13	adding Chapter 313 to read as follows:
14	14	CHAPTER 313. WORKPLACE FRAUD PREVENTION ACT
15	15	Sec. 313.001. SHORT TITLE. This chapter may be cited as the
16	16	Workplace Fraud Prevention Act.
17	17	Sec. 313.002. DEFINITIONS. In this chapter:
18	18	(1) "Construction" means work related to the erection,
19	19	improvement, alteration, repair, renovation, maintenance, or
20	20	remodeling of a building, structure, appurtenance, road, highway,
21	21	bridge, dam, levee, canal, jetty, or other improvement to or on real
22	22	property, including moving, demolishing, dredging, shoring,
23	23	scaffolding, drilling, blasting, and excavating real property.
24	24	(2) "Contractor" means a person who contracts to
25	25	perform construction services, including a subcontractor.
26	26	(3) "Employee" means an individual who provides a
27	27	service, including service in interstate commerce, for wages or
28	28	under an express or implied contract of hire, unless it is shown to
29	29	the satisfaction of the commission that the individual's
30	30	performance of the service has been and will continue to be free
31	31	from control or direction under the contract and in fact.
32	32	(4) "Independent contractor" means a person lawfully
33	33	engaged in business who performs a service, under contract, for
34	34	another person free from the control or specific direction of that
35	35	person, and who:
36	36	(A) is registered with the secretary of state and
37	37	possesses a filing number; or
38	38	(B) possesses a valid social security number and:
39	39	(i) has unique skills; or
40	40	(ii) owns and operates a significant
41	41	investment in equipment.
42	42	(5) "Performing service" means the performance of
43	43	construction service for payment.
44	44	Sec. 313.003. APPLICABILITY. This chapter does not apply
45	45	to a common law or statutory action for tort liability and does not
46	46	change or affect the common law interpretation of independent
47	47	contractor status as it relates to tort liability or a workers'
48	48	compensation claim.
49	49	Sec. 313.004. EMPLOYEE STATUS. A contractor shall properly
50	50	classify an individual performing construction services as an
51	51	employee.
52	52	Sec. 313.005. PROHIBITED ACTS. It is a violation of this
53	53	chapter for:
54	54	(1) a contractor to fail to properly designate an
55	55	individual as an employee of the contractor;
56	56	(2) a person to knowingly form or assist in the
57	57	formation of a corporation, partnership, limited liability
58	58	corporation, or other business entity, or pay or collect a fee for
59	59	use of a corporation, partnership, limited liability corporation,
60	60	or other business entity, for the purpose of facilitating a
61	61	violation of this chapter; or
62	62	(3) a person to knowingly assist, aid, or conspire
63	63	with an individual in committing a violation of this chapter.
64	64	Sec. 313.006. TELEPHONE HOTLINE AND INTERNET WEBSITE. The
65	65	commission shall provide a toll-free telephone number and website
66	66	for use by the public in reporting violations of this chapter.
67	67	Information obtained by the commission under this chapter is
68	68	confidential.
69	69	Sec. 313.007. DUTY TO INVESTIGATE. The commission shall
70	70	investigate, in a timely manner, any credible complaint made under
71	71	Section 313.006 that contains the name and contact information of
72	72	the person alleged to have committed a violation, the job site
73	73	location at which the alleged violation occurred, and a description
74	74	of the alleged violation.
75	75	Sec. 313.008. ADMINISTRATIVE PENALTY. (a) If the
76	76	commission determines that a contractor or other person has
77	77	violated this chapter, the contractor or other person shall pay to
78	78	the commission a penalty in an amount not to exceed:
79	79	(1) $500 per individual who is not properly designated
80	80	as an employee of the contractor for the first violation of Section
81	81	313.005(1);
82	82	(2) $5,000 per individual who is not properly
83	83	designated as an employee of the contractor for each subsequent
84	84	violation of Section 313.005(1);
85	85	(3) $500 for the first violation of Section 313.005(2)
86	86	or (3); and
87	87	(4) $5,000 for each subsequent violation of Section
88	88	313.005(2) or (3).
89	89	(b) Any penalty issued under this chapter applies to a
90	90	successor business entity that:
91	91	(1) has one or more officers in common with the
92	92	original employer; and
93	93	(2) is engaged in the same or similar business
94	94	activity.
95	95	(c) An administrative penalty imposed under this section
96	96	shall be imposed in the same manner as the commission imposes an
97	97	administrative penalty under other law.
98	98	Sec. 313.009. NOTIFICATION OF OTHER VIOLATIONS. (a) If the
99	99	commission determines that a contractor or other person has
100	100	violated this chapter, the commission shall:
101	101	(1) initiate enforcement proceedings under Chapter
102	102	213 to collect unpaid unemployment taxes plus interest;
103	103	(2) notify the Texas Department of Insurance of the
104	104	violation and any possible violations of the Insurance Code; and
105	105	(3) notify the attorney general and any other
106	106	appropriate prosecuting authority of any possible violation of
107	107	other law.
108	108	(b) The commission may enter into interagency agreements
109	109	with another state agency and adopt any rules necessary to
110	110	administer this section.
111	111	Sec. 313.010. ANNUAL REPORT. (a) The commission shall
112	112	issue an annual report regarding compliance with and enforcement of
113	113	this chapter. The report must include:
114	114	(1) the number of complaints received through the
115	115	hotline or website under Section 313.006;
116	116	(2) the number of investigated complaints and any
117	117	resulting findings;
118	118	(3) the amount of unemployment taxes, interest,
119	119	administrative penalties, and fines collected under this chapter;
120	120	and
121	121	(4) the number of referrals to other agencies or
122	122	authorities under Section 313.009 and the outcomes of those
123	123	referrals.
124	124	(b) The commission shall submit the report annually to the
125	125	governor and legislature.
126	126	Sec. 313.011. POSTED NOTICE. A contractor shall post in a
127	127	conspicuous location on the job site in English and Spanish the
128	128	following notice:
129	129	(1) Every individual working for a contractor has the
130	130	right to be properly classified by the contractor as an
131	131	employee or independent contractor if the individual
132	132	meets the requirements under the Workplace Fraud
133	133	Prevention Act.
134	134	(2) If you believe you or someone else has not been
135	135	properly classified as an employee or independent
136	136	contractor under the Workplace Fraud Prevention Act,
137	137	contact the Texas Workforce Commission.
138	138	Sec. 313.012. CONTRACTOR AFFIDAVIT REQUIRED FOR CONTRACT
139	139	WITH STATE OR POLITICAL SUBDIVISION; PENALTY. (a) A contract
140	140	between this state or a political subdivision of this state and a
141	141	contractor performing construction services must require:
142	142	(1) the contractor to submit an affidavit attesting
143	143	that:
144	144	(A) each individual performing services for the
145	145	contractor has been properly classified as an employee or
146	146	independent contractor under this chapter;
147	147	(B) the contractor is in compliance with the
148	148	requirements of Subchapter B, Chapter 234, Family Code; and
149	149	(C) the contractor is not barred from contracting
150	150	with this state or a political subdivision of this state under
151	151	Subsection (c); and
152	152	(2) that a contractor performing construction
153	153	services pursuant to the contract follow the provisions of this
154	154	chapter.
155	155	(b) Violation of this section by a contractor is grounds for
156	156	rescission of the contract by the state or political subdivision.
157	157	(c) A contractor who knowingly provides a false affidavit
158	158	under Subsection (a) is subject to the penalty of perjury for the
159	159	first violation and shall be barred from contracting with this
160	160	state or a political subdivision of this state for three years on a
161	161	subsequent violation.
162	162	Sec. 313.013. WORKPLACE FRAUD PREVENTION ENFORCEMENT FUND.
163	163	The workplace fraud prevention enforcement fund is established to
164	164	fund the enforcement of this chapter. The commission shall
165	165	administer the fund. The fund consists of money appropriated to the
166	166	fund by the legislature and any penalties collected under Section
167	167	313.008.
168	168	SECTION 2. Section 313.012, Labor Code, as added by this
169	169	Act, applies to a contract entered into on or after the effective
170	170	date of this Act. A contract entered into before the effective date
171	171	of this Act is governed by the law in effect on the date the contract
172	172	was entered into, and the former law is continued in effect for that
173	173	purpose.
174	174	SECTION 3. This Act takes effect September 1, 2011.