By: Louderback H.B. No. 1488

A BILL TO BE ENTITLED

AN ACT

relating to employment practices of governmental entities, state contractors, and private employers in this state regarding the legal status of employees, including requiring participation in the federal electronic verification of employment authorization program, or E-verify program, and authorizing the suspension of certain licenses held by private employers for certain conduct in relation to the employment of persons not lawfully present; providing an administrative penalty.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. The heading to Chapter 2264, Government Code, is amended to read as follows:

CHAPTER 2264. CERTAIN RESTRICTIONS ON [USE OF CERTAIN] PUBLIC SUBSIDIES AND STATE CONTRACTS

SECTION 2. Section 2264.101, Government Code, is transferred to Subchapter B, Chapter 2264, Government Code, redesignated as Section 2264.054, Government Code, and amended to read as follows:

Sec. 2264.054 [2264.101]. RECOVERY. (a) A public agency, local taxing jurisdiction, or economic development corporation, or the attorney general on behalf of the state or a state agency, may bring a civil action to recover any amounts owed to the public agency, state or local taxing jurisdiction, or economic development corporation under this subchapter [chapter].

(b) The public agency, local taxing jurisdiction, economic development corporation, or attorney general, as applicable, shall recover court costs and reasonable attorney's fees incurred in an action brought under Subsection (a).

(c) A business is not liable for a violation of this subchapter [chapter] by a subsidiary, affiliate, or franchisee of the business, or by a person with whom the business contracts.

SECTION 3. The heading to Subchapter C, Chapter 2264, Government Code, is amended to read as follows: SUBCHAPTER C. E-VERIFY PROGRAM [ENFORCEMENT]

SECTION 4. Subchapter C, Chapter 2264, Government Code, is amended by adding Sections 2264.1011, 2264.102, and 2264.103 to read as follows:

Sec. 2264.1011. DEFINITIONS. In this subchapter:

(1) "E-verify program" has the meaning assigned by Section 673.001.

(2) "State agency" has the meaning assigned by Section 2103.001.

Sec. 2264.102. VERIFICATION BY CONTRACTORS. (a) A state agency may not award a contract for goods or services within this state to a contractor unless the contractor and any subcontractor register with and participate in the E-verify program to verify employee information. The contractor and any subcontractor must continue to participate in the program during the term of the contract.

(b) Each contract with a state agency must include the following statement:

"_______(name of contractor) certifies that _______(name of contractor) is not ineligible to receive this contract under Subchapter C, Chapter 2264, Government Code, and acknowledges that if this certification is inaccurate or becomes inaccurate during the term of the contract, the contractor may be barred from participating in state contracts."

(c) If a state agency determines that a contractor was ineligible to have the contract awarded under Subsection (a), that a contractor has ceased participation in the E-verify program during the term of the contract, or that a subcontractor is not registered with or is not participating in the E-verify program, the state agency shall refer the matter to the comptroller for action.

(d) Each state agency shall develop procedures for the administration of this section.

Sec. 2264.103. BARRING FROM STATE CONTRACTS. (a) Using procedures prescribed under Section 2155.077, the comptroller may bar a contractor from participating in state contracts if the comptroller determines that the contractor:

(1) was awarded a contract in violation of Section 2264.102;

(2) has ceased participation in the E-verify program during the term of the contract; or

(3) hired a subcontractor to perform work under the contract who is not registered with or is not participating in the E-verify program.

(b) Debarment under this section is for a period of one year except that the debarment may be extended by the comptroller for additional one-year periods if the commission determines that the grounds for debarment under this section continue to exist.

SECTION 5. Subtitle B, Title 2, Labor Code, is amended by adding Chapter 53 to read as follows:

CHAPTER 53. VERIFICATION OF EMPLOYEE INFORMATION

Sec. 53.001. DEFINITIONS. In this chapter:

(1) "Commission" means the Texas Workforce Commission.

(2) "Employee" means an individual who is employed by an employer for compensation. The term includes an individual employed on a part-time basis.

(3) "Employer" means a person, other than a governmental entity, who:

(A) employs one or more employees; or

(B) acts directly or indirectly in the interests of an employer in relation to an employee.

(4) "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.

(5) "E-verify program" has the meaning assigned by Section 673.001, Government Code.

Sec. 53.002. EMPLOYEE STATUS. An employer may not classify an individual performing services for the employer as an independent contractor instead of as an employee of the employer solely for the purpose of avoiding the requirements applicable to an employer under this chapter.

Sec. 53.003. VERIFICATION. An employer shall register and participate in the E-verify program to verify information of all new employees.

Sec. 53.004. ENFORCEMENT BY STATE AGENCIES; RULES. (a) Notwithstanding any other law, each appropriate state agency shall ensure that employers in this state comply with Section 53.003 and may require compliance with that section as a condition of a license, certificate, registration, permit, or other authorization issued by the agency that is required for a person to practice or engage in a particular business, occupation, or profession in this state.

(b) Each appropriate state agency shall adopt rules and prescribe forms as necessary to implement this section.

SECTION 6. Sec. 301.009(a), Government Code, is amended to read as follows:

Sec. 301.009. COMMISSION DIVISIONS. (a) The Commission shall have:

(1) a division of workforce development;

(2) a division of unemployment compensation; [and]

(3) a civil rights division[.]; and

(4) a legal hiring compliance division.

SECTION 7. Chapter 301, Labor Code, is amended by adding Subchapter L. to read as follows:

SUBCHAPTER L. LEGAL HIRING COMPLIANCE DIVISION

Sec. 301.201. LEGAL HIRING COMPLIANCE DIVISION. The commission shall establish and operate a legal hiring compliance division to ensure private employer compliance with E-verify requirements under Chapter 53, Labor Code.

Sec. 301.202. POWERS AND DUTIES OF COMMISSION. (a) The commission has the power to conduct investigations of employers suspected of violating hiring laws and regulations regarding unauthorized workers and noncompliance with E-verify requirements.

(b) The commission may receive complaints or reports from any individual, organization, or government agency regarding suspected violations of legal hiring practices. The commission shall review all complaints and shall initiate investigations to determine compliance with E-verify requirements under Chapter 53, Labor Code.

(c) A complaint filed with the commission must include the following information:

(1) the name of the complainant;

(2) the name of the employer; and

(3) the nature and description of any alleged violation.

Sec. 301.203. CONFIDENTIALITY. (a) Information obtained in connection with an investigation under this subchapter is confidential and not subject to public disclosure, except as otherwise provided by law.

(b) The commission may disclose information:

(1) to other state agencies for the purposes of reporting continued noncompliance with Chapter 53, Labor Code; and

(2) to the comptroller for the purposes of determining continued eligibility for state contracts under Chapter 2264, Subchapter C, Government Code.

Sec. 301.204. ADMINISTRATIVE PENALTY. (a) The commission shall impose on an employer who violates this chapter an administrative penalty in an amount equal to $5,000 for each violation, unless the employer takes corrective action to achieve compliance.

(b) If, following an investigation under Section 301.202(b), the commission determines that the employer violated this chapter, the commission may recover from the employer reasonable investigative costs incurred by the commission in conducting the investigation, regardless of whether the employer has taken an action described by Subsection (a).

Sec. 301.205. NOTICE TO LICENSING AGENCIES. If the commission determines that an employer has refused to take corrective action as required by this subchapter, the commission shall send notice of continued noncompliance to each state agency that issues a license to the employer for action under Sec. 53.004, Labor Code.

Sec. 301.206. MODEL POLICIES AND COMPLIANCE GUIDANCE. (a) The commission shall develop model policies and standardized forms to support private employers in fulfilling legal hiring obligations. Model policies adopted under this section must include procedures and compliance checklists to ensure adherence to E-Verify regulations and prevent unauthorized hiring practices.

(b) The commission shall provide publicly available information regarding:

(1) how to report suspected violations of mandatory E-verify regulations; and

(2) the commission's jurisdiction and authority regarding investigations of E-verify noncompliance.

Sec. 301.207. RULES. The commission shall adopt rules as necessary to implement and enforce this subchapter.

SECTION 8. Subtitle C, Title 5, Local Government Code, is amended by adding Chapter 181 to read as follows:

CHAPTER 181. VERIFICATION OF EMPLOYEE INFORMATION

Sec. 181.001. DEFINITIONS. In this chapter:

(1) "E-Verify program" has the meaning assigned by Section 673.001, Government Code.

(2) "Political subdivision" means a county, municipality, school district, junior college district, other special district, or other subdivision of state government.

Sec. 181.002. VERIFICATION. A political subdivision shall register and participate in the E-Verify program to verify information of all new employees.

Sec. 181.003. TERMINATION OF EMPLOYMENT. An employee of a political subdivision who is responsible for verifying information of new employees of the political subdivision as required by Section 181.002 is subject to immediate termination of employment if the employee fails to comply with that section.

SECTION 9. SEVERABILITY. If any provision of this Act or its application to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of this Act that can be given effect without the invalid provision or application, and to this end, the provisions of this Act are declared to be severable.

SECTION 10. As soon as practicable after the effective date of this Act, the commission shall develop model policies required by Sec. 301.206, Government Code.

SECTION 11. Sections 2264.1011, 2264.102, and 2264.103, Government Code, as added by this Act, apply only in relation to a contract for which the request for bids or proposals or other applicable expression of interest is made public on or after the effective date of this Act.

SECTION 12. This Act applies to employment decisions or contracts made on or after the effective date of this Act. A contract of employment signed before the effective date of this Act are governed by the law that was in effect immediately before the effective date of this Act, and the former law is continued in effect for that purpose.

SECTION 13. 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, 2025.