| TO: | Honorable John Davis, Chair, House Committee on Economic & Small Business Development |
| FROM: | Ursula Parks, Director, Legislative Budget Board |
| IN RE: | HB1925 by Davis, John (Relating to the classification of certain construction workers and complaints filed with the Texas Workforce Commission; providing a penalty.), Committee Report 1st House, Substituted |
| Fiscal Year | Probable Net Positive/(Negative) Impact to General Revenue Related Funds |
|---|---|
| 2014 | $0 |
| 2015 | $0 |
| 2016 | $0 |
| 2017 | $0 |
| 2018 | $0 |
| Fiscal Year | Probable (Cost) from Unempl Comp Sp Adm Acct 165 |
Change in Number of State Employees from FY 2013 |
|---|---|---|
| 2014 | ($258,472) | 0.5 |
| 2015 | ($43,929) | 0.5 |
| 2016 | ($43,929) | 0.5 |
| 2017 | ($43,929) | 0.5 |
| 2018 | ($43,929) | 0.5 |
The bill would amend the Labor Code relating to the classification of certain construction workers and complaints filed with the Texas Workforce Commission (TWC).
The bill would require TWC to maintain a file on each complaint received by telephone or submitted through the commission's Internet website; notify the person filing the complaint if the person's name and contact information are available; requires TWC to review its policies and procedures for enforcement and any commission rule regarding the construction industry; requires TWC to adopt rules and procedures to encourage and enforce the proper classification of workers in the construction industry as employees or independent contractors; and requires the commission to 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. TWC shall submit the first report not later than December 1, 2014.
The bill would take effect January 1, 2014.
For the three calendar year period 2010-2012, TWC conducted an average of 547 audits of employers in the construction industry, based on the employers' North American Industry Classification System (NAICS) codes. The audits resulted in an average of 1,438 misclassified workers. Audits are conducted based upon: (1) Department of Labor quota requirements; (2) unemployment insurance claims which prompt wage investigations; and (3) complaints from the public alleging potential misclassification.
To implement the provisions of the bill, TWC estimates a total five-year cost of $434,188. TWC estimates it would require 0.5 new program staff at a cost of $42,165 each fiscal year in the tax department to address complaints received. TWC also estimates a technology cost of $188,785 in fiscal year 2014 to make programming changes to the Unemployment Insurance tax system. Other administrative costs are estimated at $27,522 in fiscal year 2014 and $1,764 in fiscal years 2015-2018.
Based on information provided by the Department of Insurance and the Office of the Attorney General, it is assumed that duties and responsibilities associated with implementing the provisions of the bill could be accomplished by utilizing existing resources. This analysis does not consider any penalty revenue that may be generated from the implementation of the provisions of the bill.
| Source Agencies: | 320 Texas Workforce Commission, 302 Office of the Attorney General, 304 Comptroller of Public Accounts, 454 Department of Insurance
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| LBB Staff: | UP, NV, RB, MW
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