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