83R19131 MAW-F
By: J. Davis of Harris H.B. No. 1925
Substitute the following for H.B. No. 1925:
By: Murphy C.S.H.B. No. 1925
A BILL TO BE ENTITLED
AN ACT
relating to the classification of certain construction workers and
complaints filed with the Texas Workforce Commission; providing a
penalty.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter B, Chapter 213, Labor Code, is
amended by adding Sections 213.026 and 213.027 to read as follows:
Sec. 213.026. CONSTRUCTION EMPLOYER REQUIREMENT TO REPORT
EMPLOYEES; PENALTY. (a) In this section, "construction employer"
means an employer who employs an individual to provide services
directly related to the erection, alteration, repair, renovation,
maintenance, or remodeling of a building, structure, appurtenance,
road, highway, bridge, dam, levee, canal, jetty, or other
improvement to or on real property, including moving, demolishing,
dredging, shoring, scaffolding, drilling, blasting, or excavating
real property.
(b) A construction employer shall properly report the
employment status of each employee of the construction employer for
the purposes of this subtitle and as required by commission rule.
(c) In addition to any other penalty under this subchapter,
a construction employer who violates this section shall pay to the
commission:
(1) a penalty in the amount of $100 for each employee
not properly reported for an initial violation by the employer; and
(2) a penalty not to exceed $1,000 for each employee
not properly reported for each subsequent violation that occurs
after an initial violation by the employer.
(d) In determining the amount of a penalty under Subsection
(c)(2), the commission shall consider:
(1) the seriousness of the violation, including the
nature, circumstances, consequences, extent, and gravity of the
violation;
(2) any history of previous violations by the
construction employer;
(3) the demonstrated good faith of the construction
employer, including actions taken to rectify the consequences of
the violation;
(4) the amount of a penalty necessary to deter future
violations; and
(5) any other matter that justice may require.
(e) Based on the criteria listed in Subsection (d), the
commission by rule shall adopt a schedule of penalties for a
violation described by Subsection (c)(2) to ensure that the amount
of a penalty imposed is appropriate to the violation.
(f) For a construction employer's initial violation of this
section, the commission shall assess a penalty against the employer
as provided by Subsection (c)(1) for each violation determined by
the commission to have occurred, regardless of the reporting period
in which the violation occurred.
(g) An unpaid penalty assessed under this section applies to
a successor business entity that:
(1) has one or more owners who jointly control at least
50 percent of the:
(A) original employer; and
(B) successor business entity; and
(2) is engaged in the same or a similar business
activity as the original employer.
(h) Except as provided by Subsection (g), the employer of an
employee who is not properly reported is the only person liable for
a penalty assessed under this section.
Sec. 213.027. APPEAL REGARDING CONSTRUCTION EMPLOYER
REQUIREMENT TO REPORT EMPLOYEES. (a) In this section,
"construction employer" has the meaning assigned by Section
213.026.
(b) A determination that a construction employer has
violated Section 213.026 and any penalty assessed for the violation
may be reviewed and appealed in the same manner as a disputed claim
under Subchapters C, D, and E, Chapter 212.
(c) In ruling on an appeal, the facts and circumstances
supporting the construction employer's appeal must be considered,
including:
(1) the contents of any written contract between the
construction employer and the individual whose employment status
was not properly reported;
(2) documentation that the individual represents that
the individual is an independent contractor;
(3) an Internal Revenue Service Form W-9 pertaining to
the individual or a similar form providing the same information as
that form;
(4) an Internal Revenue Service Form 1099, or similar
form issued by, or that meets the compliance guidelines of, the
Internal Revenue Service, on which the construction employer has
reported the amount paid to the individual and that was filed in
accordance with Internal Revenue Service requirements;
(5) whether the individual is not prohibited from
hiring employees;
(6) whether the individual has a substantial
investment in, and is required to furnish, necessary equipment;
(7) whether the individual is free to perform services
for others;
(8) whether the individual has provided evidence of
any insurance for the individual's business activity;
(9) the construction employer's need to control the
work of the individual if:
(A) customary to the type of work being
performed; or
(B) required by a general contractor or
construction project owner in order that the general contractor or
owner may maintain specific control and direction of the worksite
or the flow of work being performed; or
(10) whether the failure to properly report the
employment status was intentional.
SECTION 2. Section 301.023, Labor Code, is amended to read
as follows:
Sec. 301.023. COMPLAINTS AGAINST COMMISSION. (a) The
commission shall maintain a file on each written complaint filed
with the commission and each complaint received by telephone or
submitted through the commission's Internet website. The file must
include:
(1) the name of the person who filed the complaint, if
available;
(2) the date the complaint is received by the
commission;
(3) the subject matter of the complaint;
(4) the name of each person contacted in relation to
the complaint;
(5) a summary of the results of the review or
investigation of the complaint; and
(6) an explanation of the reason the file was closed,
if the commission closed the file without taking action other than
to investigate the complaint.
(b) The commission shall provide to the person filing the
complaint, if the person's name and contact information are
available, and to each person who is a subject of the complaint a
copy of the commission's policies and procedures relating to
complaint investigation and resolution.
(c) The commission, at least quarterly until final
disposition of the complaint, shall notify the person filing the
complaint, if the person's name and contact information are
available, and each person who is a subject of the complaint of the
status of the investigation unless the notice would jeopardize an
undercover investigation.
SECTION 3. Subchapter D, Chapter 301, Labor Code, is
amended by adding Section 301.0612 to read as follows:
Sec. 301.0612. DUTIES REGARDING CONSTRUCTION INDUSTRY. (a)
It is the policy of this state that each worker in the construction
industry must be properly classified as an employee or independent
contractor.
(b) The commission shall review its policies and procedures
for the enforcement of Subtitle A and any commission rule regarding
the construction industry. The commission shall adopt rules and
procedures to encourage and enforce the proper classification of
workers in the construction industry as employees or independent
contractors.
(c) As soon as practicable after the end of each fiscal
year, the commission shall submit a report to the governor and the
legislature regarding the efforts of the commission to ensure the
proper classification of workers in the construction industry. The
report must include with respect to the construction industry:
(1) the number of investigated complaints by the
commission and any findings; and
(2) the amount of unemployment taxes, interest, and
administrative penalties collected as a result of enforcement
actions taken under Chapter 213.
(d) The report under Subsection (c) may not include
identifying information about a person subject to this title or a
complainant.
SECTION 4. Section 213.026, Labor Code, as added by this
Act, applies only to conduct that occurs on or after the effective
date of this Act. Conduct that occurs before the effective date of
this Act is governed by the law in effect immediately before the
effective date of this Act, and the former law is continued in
effect for that purpose.
SECTION 5. The Texas Workforce Commission shall submit the
first report required by Section 301.0612, Labor Code, as added by
this Act, not later than December 1, 2014.
SECTION 6. This Act takes effect January 1, 2014.