By: Estes S.B. No. 1408
A BILL TO BE ENTITLED
AN ACT
relating to the review of wage claim disputes by the Texas Workforce
Commission.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 301.0015. Labor Code, is amended to read
as follows:
(a) In administering its functions under this title or
another law, the commission shall limit its activities to:
(1) setting commission policies, including policies
that clearly separate the policymaking responsibilities of the
commission and the management responsibilities of the executive
director and commission staff;
(2) giving general direction to the executive director
regarding the implementation of the commission's policies, and
holding the executive director accountable for implementing the
policies;
(3) approving the commission's budget recommendation
to the legislature;
(4) reviewing under Subchapter D, Chapter 212, the
decision of an appeal tribunal regarding unemployment
compensation;
(5) reviewing under Subchapter D, Chapter 61, the
decision of a wage claim appeal tribunal regarding wage claims;
(56) adopting rules necessary to administer the
commission's policies, including rules necessary for the
administration of this title and rules governing required reports,
procedures, and orders;
(67) responding to questions and comments that are
directed to the commission by the executive director and that
relate to setting or clarifying commission policies or relate to
other matters of general interest to the commission; and
(78) requesting information from commission staff.
(b) Except as provided by Subsection (c), the commission may
conduct the activities listed in Subsection (a) only when acting as
a governmental body.
(c) The commission, acting as a governmental body, or an
individual member of the commission may conduct the activities
listed in Subsections (a)(6) and (7).
(d) In administering its functions under this title or
another law, the commission, acting as a governmental body, or an
individual member of the commission may not:
(1) direct the day-to-day operations of the executive
director or other commission staff; or
(2) establish the details for the implementation of
commission policies or direct the executive director or other
commission staff about those details.
SECTION 2. Section 301.006. Labor Code, is amended to read
as follows:
(a) The governor shall designate the chair of the commission
from among the members of the commission. The chair shall serve in
that capacity at the pleasure of the governor for a two-year term.
The governor may redesignate the same member to serve consecutive
terms.
(b) Notwithstanding Subsection (a), the member of the
commission who represents the public shall serve as chair:
(1) when the commission acts under Subchapter D,
Chapter 212; and
(2) in commission hearings involving unemployment
insurance issues regarding tax coverage, contributions, or
reimbursements.; and
(3) when the commission acts under Subchapter D,
Chapter 61.
SECTION 3. DEFINITIONS. Section 61.001, Labor Code, is
amended to read as follows:
(1) "Commission" means the Texas EmploymentWorkforce
Commission or its designee.
(2) "Day" means a calendar day.
(3) "Employee" means an individual who is employed by
an employer for compensation. The term does not include:
(A) a person related to the employer or the
employer's spouse within the first or second degree by
consanguinity or affinity, as determined under Chapter 573,
Government Code; or
(B) an independent contractor.
(4) "Employer" means a person who:
(A) employs one or more employees; or
(B) acts directly or indirectly in the interests
of an employer in relation to an employee.
(5) "Employment" means any service, including service
in interstate commerce, that is performed for wages or under a
contract of hire, whether written or oral or express or implied.
The term does not include any service performed by an individual for
wages if it is shown that the individual is free from control or
direction in the performance of the service, both under any
contract of service and in fact.
(6) "Mail" means to deposit for mailing with the
United States Postal Service.
(7) "Wages" means compensation owed by an employer
for:
(A) labor or services rendered by an employee,
whether computed on a time, task, piece, commission, or other
basis; and
(B) vacation pay, holiday pay, sick leave pay,
parental leave pay, or severance pay owed to an employee under a
written agreement with the employer or under a written policy of the
employer.
SECTION 4. PRELIMINARY WAGE DETERMINATION ORDER. Section
61.052, Labor Code, is amended to read as follows:
(a) The A commission examiner shall analyze each wage claim
filed under Section 61.051 and, if the claim alleges facts
actionable under this chapter, shall investigate the claim and
issue a preliminary wage determination order:
(1) dismissing the wage claim; or
(2) ordering payment of wages determined to be due and
unpaid.
(b) If a commission examiner imposes an administrative
penalty is imposed under Section 61.053, the preliminary wage
determination order must include an order for payment of the
penalty.
(c) The commission examiner shall mail notice of the
preliminary wage determination order to each party at that party's
last known address, as reflected by commission records.
SECTION 5. BAD FAITH; ADMINISTRATIVE PENALTY. Section
61.053, Labor Code, is amended to read as follows:
(a) If the commission examiner, a wage claim appeal
tribunal, or the commission determines that an employer acted in
bad faith in not paying wages as required by this chapter, the
commission examiner, a wage claim appeal tribunal, or the
commission, in addition to ordering the payment of the wages, may
assess an administrative penalty against the employer.
(b) If the commission examiner, a wage claim appeal
tribunal, or the commission determines an employee acted in bad
faith in bringing a wage claim, the commission examiner, a wage
claim appeal tribunal, or the commission may assess an
administrative penalty against the employee.
(c) An administrative penalty assessed under this section
may not exceed the lesser of:
(1) the amount of the wages in question or claimed; or
(2) $1,000.
(d) In determining the amount of an administrative penalty
assessed under this section, the commission examiner, a wage claim
appeal tribunal, or the commission shall consider:
(1) the seriousness of the violation;
(2) the history of previous violations;
(3) the amount necessary to deter a future violation;
and
(4) any other appropriate matter, including
mitigating circumstances.
SECTION 6. REQUEST FOR HEARING ON PRELIMINARY ORDER.
Section 61.054, Labor Code, is amended to read as follows:
(a) Either party may request a hearing to contestappeal a
preliminary wage determination order.
(b) The request for hearing must be made in writing not
later than the 21st day after the date the commission examiner mails
the notice of the preliminary wage determination order.
SECTION 7. PRELIMINARY ORDER FINAL IF HEARING NOT
REQUESTED. Section 61.055, Labor Code, is amended to read as
follows:
(A) If neither party requests a hearing to
contestappeal a preliminary wage determination order within the
period prescribed by Section 61.054, the order becomes the final
order of the commission for all purposes, and neither party is
entitled to judicial review of the order under this subchapter.
SECTION 8. PAYMENT REQUIRED IF HEARING NOT REQUESTED.
Section 61.056, Labor Code, is amended to read as follows:
(a) An employer that does not request a hearing within the
period prescribed by Section 61.054 to contestappeal a preliminary
wage determination order shall pay the amount ordered to the
commission not later than the 21st day after the date the commission
examiner mails notice of the order. The payment must equal the net
amount of outstanding wages after any valid deductions and must
include an itemized list of those deductions.
(b) Payment to the commission constitutes payment to the
employee for all purposes.
SECTION 9. ESTABLISHMENT OF WAGE CLAIM APPEAL TRIBUNALS.
Section 61.057, Labor Code, is amended to read as follows:
(a) The commission shall establish one or more impartial
wage claim appeal tribunals to hear and decide disputed wage claims
if the establishment of those wage claim appeal tribunals is
necessary to ensure prompt disposal of wage claims cases on appeal.
(b) A wage claim appeal tribunal is composed of a salaried
examiner.
SECTION 10. NOTICE; TIME FOR HEARING. Section 61.0578,
Labor Code, is amended to read as follows:
(a) A notice regarding an administrative hearing conducted
under this subchapter must be mailed by the commissionwage claim
appeal tribunal not later than the 21st day after the date a request
for the hearing is received by the commission.
(b) As soon as practicable, but not later than the 45th day
after the date a notice is mailed under Subsection (a), the
commissionwage claim appeal tribunal shall conduct the hearing.
SECTION 11. HEARING PROCEDURES. Section 61.0589, Labor
Code, is amended to read as follows:
(a) A hearing conducted under this subchapter is subject to
the rules and hearings procedures used by the commission in the
determination of a claim for unemployment compensation benefits.
(b) The hearing is not subject to Chapter 2001, Government
Code.
SECTION 12. COMMISSIONWAGE CLAIM APPEAL TRIBUNAL
CONSIDERATION OF PRELIMINARY WAGE DETERMINATION ORDER. Section
61.05960, Labor Code, is amended to read as follows:
(a) The commission wage claim appeal tribunal may modify,
affirm, or rescind a preliminary wage determination order.
SECTION 13. ORDER AFTER HEARING. Section 61.06061, Labor
Code, is amended to read as follows:
After a hearing, the commissionwage claim appeal tribunal
shall enter a written order for the payment of wages that the
commissionwage claim appeal tribunal determines to be due or for
the payment of any penalty the commissionwage claim appeal
tribunal assesses.
SECTION 14. NOTICE AND FINALITY OF ORDER. Section
61.06162, Labor Code, is amended as follows:
(a) The commissionwage claim appeal tribunal shall mail to
each party to the appeal notice of:
(1) the decision;
(2) the amount of wages subject to the order; and
(3) the amount of any penalty assessed; and
(4) the parties' right to judicial review of the order.
(b) The notice shall be mailed to a party's last known
address, as shown by commission records.
(c) The order becomes final 14 days after the date on which
it is mailed unless further appeal is initiated as provided by
Section 61.064 before that date:
(1) a party to the appeal files a written motion for
rehearing; or
(2) the commission reopens the hearing.
SECTION 15. REMOVAL OR TRANSFER OF CLAIM PENDING BEFORE
WAGE CLAIM APPEAL TRIBUNAL. Section 61.063, Labor Code, is amended
as follows:
(a) The commission may remove to itself or transfer to
another wage claim appeal tribunal the proceedings on a wage claim
pending before a wage claim appeal tribunal.
(b) A quorum of the commission shall hear a proceeding
removed to the commission under Subsection (a).
(c) The commission promptly shall mail to the parties before
it a notice of its order.
SECTION 16. COMMISSION REVIEW OF WAGE CLAIM APPEAL TRIBUNAL
ORDER. Section 61.064, Labor Code, is amended as follows:
The commission may:
(1) on its own motion:
(A) affirm, modify, or set aside any order issued
under Section 61.062 on the basis of the evidence previously
submitted in the case; or
(B) direct the taking of additional evidence; or
(2) permit any of the parties to the order to initiate
a further appeal before the commission.
SECTION 17. NOTICE OF COMMISSION ACTION. Section 61.065,
Labor Code, is amended as follows:
(a) The commission shall mail to each party to the appeal
notice of:
(1) the decision;
(2) the amount of wages subject to the order;
(3) the amount of any penalty assessed; and
(4) the parties' right to judicial review of the order.
(b) The notice shall be mailed to a party's last known
address, as shown by commission records.
SECTION 18. FINALITY OF COMMISSION ORDER. Section
61.066, Labor Code, is amended as follows:
An order of the commission becomes final 14 days after the
date the order is mailed unless before that date:
(1) the commission by order reopens the appeal; or
(2) a party to the appeal files a written motion for
rehearing.
SECTION 19. JUDICIAL REVIEW. Section 61.0627, Labor
Code, is amended as follows:
(a) A party who has exhausted the party's administrative
remedies under this chapter may bring a suit to appeal the order.
(b) The exhaustion of those remedies does not include a
motion for rehearing.
(bc) The suit must be filed not later than the 30th day after
the date the final order is mailed.
(cd) The commission and any other party to the proceeding
before the commission must be made defendants in the suit.
(de) The suit must be brought in the county of the
claimant's residence. If the claimant is not a resident of this
state, the suit must be brought in the county in this state in which
the employer has its principal place of business.
(ef) An appeal under this subchapter is by trial de novo
with the substantial evidence rule being the standard of review in
the manner as applied to an appeal from a final decision under
Subtitle A, Title 4.
SECTION 20. PAYMENT TO COMMISSION; ESCROW PENDING REVIEW;
WAIVER. Section 61.0638, Labor Code, is amended as follows.
(a) Not later than the 30th day after the date a commission
order becomes final, the party required to pay wages or a penalty
shall:
(1) pay the amount to the commission; or
(2) if the party files a petition for judicial review
in a court of competent jurisdiction contesting the final order,
send the amount to the commission for deposit in an
interest-bearing escrow account.
(b) Unless the party files an affidavit of inability to pay
with the clerk of the court within the period specified in
Subsection (a), failure to send the amount within that period
constitutes a waiver of the right to judicial review.
(c) If after judicial review it is determined that some or
all of the wages are not owed or the penalty is reduced or is not
assessed, the commission shall remit the appropriate amount to the
party assessed the wage payment or penalty, plus the interest
accrued on the escrowed amount. Interest under this section shall
be paid for the period beginning on the date the assessed amount is
paid to the commission and ending on the date the amount is remitted
to the party.
SECTION 21. PAYMENT TO EMPLOYEE. Section 61.0649, Labor
Code, is amended as follows:
Not later than the 30th day after the date on which a claim is
finally adjudicated or otherwise resolved, the commission shall pay
to the claimant wages collected under this subchapter and any
interest earned on those wages.
SECTION 22. DEPOSIT OF PENALTY. Section 61.06570, Labor
Code, is amended as follows:
The commission shall deposit a penalty collected under this
subchapter in the unemployment compensation special administration
fund established under Subchapter E, Chapter 203.
SECTION 23. COMMISSION ACTION; ENFORCEMENT OF ORDER.
Section 61.06671, Labor Code, is amended as follows:
(a) The commission, in the name of the state and the
attorney general, may:
(1) bring a suit in a district court in Travis County
to enforce a final order from which an appeal under this chapter has
not been taken; or
(2) serve on the defaulting party a notice of
assessment stating the amount due.
(b) A notice of assessment served under this section is
prima facie evidence of the contents of the notice. However, the
defaulting party may show the incorrectness of the notice of
assessment.
(c) The notice shall be served in the manner provided by law
for service of process on a defendant in a civil action in district
court.
(d) A person aggrieved by the determination of the
commission as stated in the notice of assessment may seek judicial
review of the assessment by filing a petition for judicial review in
a Travis County district court not later than the 30th day after the
date on which the notice of assessment is served. A copy of the
petition shall be served in the manner prescribed by law for service
of process on a defendant in a civil action in district court on:
(1) a member of the commission; or
(2) a person designated by the commission for service
of process.
(e) If the party on whom a notice of assessment is served
does not seek judicial review as provided by this section, the
assessment is final for all purposes. An assessment that is not
contested or that is upheld after judicial review shall be
recorded, enforced, renewed, and otherwise treated as the final
judgment of a district court.
(f) Unless the adverse party prevails in the civil action or
the notice of assessment is reversed by a reviewing court, the
adverse party shall pay all costs of either action, including
attorney's fees, investigation costs, service costs, court costs,
and other applicable costs.
SECTION 24. RECIPROCAL COLLECTION ARRANGEMENTS. Section
61.06772, Labor Code, is amended as follows:
The commission may enter into reciprocal arrangements with
appropriate authorized agencies of the United States or other
states for the collection of wage claims that are final under the
laws of the jurisdictions in which they were filed.
SECTION 25. EFFECTIVE DATE. This Act takes effect
immediately if it receives a vote of two thirds of all the members
elected to each house, as provided by Section 39, Article III, Texas
Constitution. If this Act does not receive the vote necessary for
immediate effect, this Act takes effect September 1, 2005.