Texas 2023 - 88th Regular

Texas House Bill HB1054 Compare Versions

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1	1	88R2990 RDS-F
2	2	By: Turner H.B. No. 1054
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the classification of certain construction workers and
8	8	the eligibility of those workers for unemployment benefits;
9	9	providing an administrative penalty.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Subchapter E, Chapter 201, Labor Code, is
12	12	amended by adding Section 201.079 to read as follows:
13	13	Sec. 201.079. SERVICE BY INDEPENDENT CONTRACTOR IN
14	14	CONSTRUCTION. (a) In this section, "construction" has the meaning
15	15	assigned by Section 301.201.
16	16	(b) In this subtitle, "employment" does not include
17	17	construction performed by an individual as an independent
18	18	contractor.
19	19	SECTION 2. Chapter 301, Labor Code, is amended by adding
20	20	Subchapter L to read as follows:
21	21	SUBCHAPTER L. CLASSIFICATION OF INDIVIDUAL EMPLOYED IN
22	22	CONSTRUCTION
23	23	Sec. 301.201. DEFINITIONS. In this subchapter:
24	24	(1) "Construction" means work related to the erection,
25	25	improvement, alteration, repair, renovation, maintenance, or
26	26	remodeling of a building, structure, appurtenance, road, highway,
27	27	bridge, dam, levee, canal, jetty, or other improvement to or on real
28	28	property, including moving, demolishing, dredging, shoring,
29	29	scaffolding, drilling, blasting, and excavating real property.
30	30	(2) "Contractor" means a person who contracts to
31	31	perform construction.
32	32	(3) "Employee" has the meaning assigned by Section
33	33	61.001.
34	34	Sec. 301.202. APPLICABILITY. (a) An individual may not be
35	35	considered an employee based solely on the fact that the person for
36	36	whom the individual is providing construction services requires
37	37	that any employee hired by the individual must:
38	38	(1) submit to a criminal background check or
39	39	preemployment drug screening; or
40	40	(2) possess a certain license or certification
41	41	relating to the work the employee will perform.
42	42	(b) A person for whom an individual is providing
43	43	construction services is not required to report to the commission
44	44	under Subtitle A that the individual is an employee of the person if
45	45	the person:
46	46	(1) shows that the individual is an independent
47	47	contractor;
48	48	(2) provides to the individual an Internal Revenue
49	49	Service Form 1099, or a similar form issued by, or that meets the
50	50	compliance guidelines of, the Internal Revenue Service, on which
51	51	the person reports the amount paid to the individual in accordance
52	52	with Internal Revenue Service requirements; and
53	53	(3) files the form described by Subdivision (2) with
54	54	the Internal Revenue Service in accordance with Internal Revenue
55	55	Service requirements.
56	56	(c) This subchapter does not apply to services performed by
57	57	an individual in the employ of:
58	58	(1) a state, a political subdivision of a state, or an
59	59	Indian tribe or an instrumentality of a state, political
60	60	subdivision of a state, or Indian tribe that is wholly owned by one
61	61	or more states, political subdivisions, or Indian tribes, provided
62	62	that the services are excluded from employment as defined in the
63	63	Federal Unemployment Tax Act (26 U.S.C. Section 3301 et seq.)
64	64	solely because of Section 3306(c)(7) of that Act; or
65	65	(2) a religious, charitable, educational, or other
66	66	organization, provided that the services are excluded from
67	67	employment as defined in the Federal Unemployment Tax Act (26
68	68	U.S.C. Section 3301 et seq.) solely because of Section 3306(c)(8)
69	69	of that Act.
70	70	Sec. 301.203. EMPLOYEE STATUS. A contractor shall properly
71	71	classify each individual providing construction services as either
72	72	an employee or an independent contractor in accordance with
73	73	commission rules.
74	74	Sec. 301.204. INFORMATION REGARDING COMPLAINTS. The
75	75	commission shall provide on its Internet website information
76	76	regarding the procedure for the public to report violations of this
77	77	subchapter.
78	78	Sec. 301.205. ADMINISTRATIVE PENALTY. (a) The commission
79	79	may impose an administrative penalty on a contractor who violates
80	80	Section 301.203. The amount of the penalty may not exceed:
81	81	(1) $100 for each individual who is not properly
82	82	classified; and
83	83	(2) $1,000 for each individual who is not properly
84	84	classified for each subsequent violation that occurs after the
85	85	imposition of a penalty for a prior violation.
86	86	(b) Any penalty issued under this section applies to a
87	87	successor business entity that:
88	88	(1) has one or more owners who jointly control at least
89	89	50 percent of the:
90	90	(A) original employer; and
91	91	(B) successor business entity; and
92	92	(2) is engaged in the same or similar business
93	93	activity.
94	94	(c) An administrative penalty imposed under this section
95	95	shall be imposed in the same manner as the commission imposes an
96	96	administrative penalty under other law.
97	97	Sec. 301.206. NOTIFICATION TO GOVERNMENTAL ENTITY. If the
98	98	commission determines that a contractor has violated this
99	99	subchapter, the commission shall provide notice of the violation to
100	100	each governmental entity that the commission reasonably believes
101	101	has received construction services provided by the contractor. The
102	102	notice must identify the contractor and, for each violation,
103	103	specify the type of service provided and the location at which the
104	104	service was provided, if known to the commission. In this section,
105	105	"governmental entity" has the meaning assigned by Section 406.096.
106	106	Sec. 301.207. ANNUAL REPORT. The commission shall issue an
107	107	annual report regarding compliance with and enforcement of this
108	108	subchapter. The report must include:
109	109	(1) the number of complaints received from the public;
110	110	(2) the number of investigated complaints and any
111	111	resulting findings; and
112	112	(3) the amount of unemployment taxes, interest,
113	113	administrative penalties, and fines actually collected as a result
114	114	of:
115	115	(A) violations of this subchapter; or
116	116	(B) the exclusion of construction performed by an
117	117	individual from the application of Subtitle A, unless the services
118	118	are excluded by application of Section 201.079.
119	119	SECTION 3. The change in law made by this Act applies only
120	120	to a claim for unemployment compensation benefits that is filed
121	121	with the Texas Workforce Commission on or after the effective date
122	122	of this Act. A claim filed before the effective date of this Act is
123	123	governed by the law in effect on the date the claim was filed, and
124	124	the former law is continued in effect for that purpose.
125	125	SECTION 4. This Act takes effect September 1, 2023.