| |
| |
|
|
A BILL TO BE ENTITLED
|
|
|
AN ACT
|
|
|
relating to establishing the Workplace Fraud Prevention Act; |
|
|
providing penalties. |
|
|
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
|
|
SECTION 1. Subtitle B, Title 4, Labor Code, is amended by |
|
|
adding Chapter 315 to read as follows: |
|
|
CHAPTER 315. WORKPLACE FRAUD PREVENTION ACT |
|
|
Sec. 315.001. SHORT TITLE. This chapter may be cited as the |
|
|
Workplace Fraud Prevention Act. |
|
|
Sec. 315.002. DEFINITIONS. In this chapter: |
|
|
(1) "Construction" means work related to the erection, |
|
|
improvement, 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, and excavating real property. |
|
|
(2) "Contractor" means a person who contracts to |
|
|
perform construction services, including a subcontractor. |
|
|
(3) "Employee" means an individual who provides a |
|
|
service, including service in interstate commerce, for wages or |
|
|
under an express or implied contract of hire. |
|
|
(4) "Independent contractor" means a person lawfully |
|
|
engaged in business who performs a construction service, under |
|
|
contract, for another person free from the control or specific |
|
|
direction of that person, and who: |
|
|
(A) is registered with the secretary of state and |
|
|
possesses a filing number; or |
|
|
(B) possesses a valid tax identification number |
|
|
and: |
|
|
(i) has unique skills; or |
|
|
(ii) owns and operates a significant |
|
|
investment in equipment. |
|
|
Sec. 315.003. APPLICABILITY. (a) This chapter does not |
|
|
apply to a common law or statutory action for tort liability and |
|
|
does not change or affect the common law interpretation of |
|
|
independent contractor status as it relates to tort liability or a |
|
|
workers' compensation claim. |
|
|
(b) An individual is not an employee for purposes of this |
|
|
chapter if the individual's performance of construction services is |
|
|
determined by the commission to be free from the control or |
|
|
direction of the person for whom the services are performed. |
|
|
Sec. 315.004. EMPLOYEE STATUS. A contractor shall properly |
|
|
classify an individual performing construction services as an |
|
|
employee. |
|
|
Sec. 315.005. PROHIBITED ACTS. It is a violation of this |
|
|
chapter for: |
|
|
(1) a contractor to fail to properly designate an |
|
|
individual as an employee of the contractor; |
|
|
(2) a person to knowingly form or assist in the |
|
|
formation of a corporation, partnership, limited liability |
|
|
company, or other business entity, or pay or collect a fee for use |
|
|
of a corporation, partnership, limited liability company, or other |
|
|
business entity, for the purpose of facilitating a violation of |
|
|
this chapter; or |
|
|
(3) a person to knowingly assist, aid, or conspire |
|
|
with an individual in committing a violation of this chapter. |
|
|
Sec. 315.006. TELEPHONE HOTLINE AND INTERNET WEBSITE. The |
|
|
commission shall provide a toll-free telephone number and Internet |
|
|
website for use by the public in reporting violations of this |
|
|
chapter. Information obtained by the commission under this chapter |
|
|
is confidential. |
|
|
Sec. 315.007. DUTY TO INVESTIGATE. The commission shall |
|
|
investigate, in a timely manner, any credible complaint made under |
|
|
Section 315.006 that contains the name and contact information of |
|
|
the person alleged to have committed a violation, the job site |
|
|
location at which the alleged violation occurred, and a description |
|
|
of the alleged violation. |
|
|
Sec. 315.008. ADMINISTRATIVE PENALTY. (a) The commission |
|
|
may impose an administrative penalty on a contractor or other |
|
|
person who violates this chapter. The amount of the penalty may not |
|
|
exceed: |
|
|
(1) $500 for each individual who is not properly |
|
|
designated as an employee of the contractor for the first violation |
|
|
of Section 315.005(1); |
|
|
(2) $5,000 for each individual who is not properly |
|
|
designated as an employee of the contractor for each subsequent |
|
|
violation of Section 315.005(1) that occurs after the imposition of |
|
|
a penalty for a prior violation of that subdivision and before the |
|
|
fifth anniversary of the date of that imposition; |
|
|
(3) $500 for the first violation of Section 315.005(2) |
|
|
or (3); and |
|
|
(4) $5,000 for each subsequent violation of Section |
|
|
315.005(2) or (3) that occurs after the imposition of a penalty for |
|
|
a prior violation of either subdivision and before the fifth |
|
|
anniversary of the date of that imposition. |
|
|
(b) Any penalty issued under this chapter applies to a |
|
|
successor business entity that: |
|
|
(1) has one or more officers in common with the |
|
|
original employer; and |
|
|
(2) is engaged in the same or similar business |
|
|
activity. |
|
|
(c) An administrative penalty imposed under this section |
|
|
shall be imposed in the same manner as the commission imposes an |
|
|
administrative penalty under other law. |
|
|
Sec. 315.009. NOTIFICATION OF OTHER VIOLATIONS. (a) If the |
|
|
commission determines that a contractor or other person has |
|
|
violated this chapter, the commission shall: |
|
|
(1) initiate enforcement proceedings under Chapter |
|
|
213 to collect unpaid unemployment taxes plus interest; |
|
|
(2) notify the Texas Department of Insurance of the |
|
|
violation and any possible violations of the Insurance Code; and |
|
|
(3) notify the attorney general and any other |
|
|
appropriate prosecuting authority of any possible violation of |
|
|
other law. |
|
|
(b) The commission may enter into an interagency agreement |
|
|
with another state agency and adopt any rules necessary to |
|
|
administer this section. |
|
|
Sec. 315.010. ANNUAL REPORT. (a) The commission shall |
|
|
issue an annual report regarding compliance with and enforcement of |
|
|
this chapter. The report must include: |
|
|
(1) the number of complaints received through the |
|
|
hotline or Internet website under Section 315.006; |
|
|
(2) the number of investigated complaints and any |
|
|
resulting findings; |
|
|
(3) the amount of unemployment taxes, interest, |
|
|
administrative penalties, and fines collected under this chapter; |
|
|
and |
|
|
(4) the number of referrals to other agencies or |
|
|
authorities under Section 315.009 and the outcomes of those |
|
|
referrals. |
|
|
(b) The commission shall submit the report annually to the |
|
|
governor and legislature. |
|
|
Sec. 315.011. POSTED NOTICE. A contractor shall post in a |
|
|
conspicuous location on the job site in English and Spanish the |
|
|
following notice: |
|
|
(1) Every individual working for a contractor has the |
|
|
right to be properly classified by the contractor as an |
|
|
employee or independent contractor if the individual |
|
|
meets the requirements under the Workplace Fraud |
|
|
Prevention Act. |
|
|
(2) If you believe you or someone else has not been |
|
|
properly classified as an employee or independent |
|
|
contractor under the Workplace Fraud Prevention Act, |
|
|
contact the Texas Workforce Commission. |
|
|
Sec. 315.012. CONTRACTOR AFFIDAVIT REQUIRED FOR CONTRACT |
|
|
WITH STATE OR POLITICAL SUBDIVISION; PENALTY. (a) A contract |
|
|
between this state or a political subdivision of this state and a |
|
|
contractor performing construction services must require: |
|
|
(1) the contractor to submit an affidavit executed |
|
|
under penalty of perjury stating that: |
|
|
(A) each individual performing services for the |
|
|
contractor has been properly classified as an employee or |
|
|
independent contractor under this chapter; |
|
|
(B) the contractor is in compliance with the |
|
|
requirements of Subchapter B, Chapter 234, Family Code; and |
|
|
(C) the contractor is not barred from contracting |
|
|
with this state or a political subdivision of this state under |
|
|
Subsection (c); and |
|
|
(2) that a contractor performing construction |
|
|
services under the contract must comply with this chapter. |
|
|
(b) A violation of this section by a contractor is grounds |
|
|
for rescission of the contract by this state or a political |
|
|
subdivision of this state. |
|
|
(c) A contractor who knowingly violates Subsection (a) on |
|
|
more than one occasion by providing false affidavits shall be |
|
|
barred from contracting with this state or a political subdivision |
|
|
of this state until the third anniversary of the date of the most |
|
|
recent violation. |
|
|
Sec. 315.013. WORKPLACE FRAUD PREVENTION ENFORCEMENT FUND. |
|
|
The workplace fraud prevention enforcement fund is established to |
|
|
fund the enforcement of this chapter. The commission shall |
|
|
administer the fund. The fund consists of money appropriated to the |
|
|
fund by the legislature and any penalties collected under Section |
|
|
315.008. |
|
|
SECTION 2. Section 315.012, Labor Code, as added by this |
|
|
Act, applies to a contract entered into on or after the effective |
|
|
date of this Act. A contract entered into before the effective date |
|
|
of this Act is governed by the law in effect on the date the contract |
|
|
was entered into, and the former law is continued in effect for that |
|
|
purpose. |
|
|
SECTION 3. This Act takes effect September 1, 2013. |