Bill Text: TX HB1054 | 2023-2024 | 88th Legislature | Engrossed


Bill Title: Relating to the classification of certain construction workers and the eligibility of those workers for unemployment benefits; providing an administrative penalty.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Engrossed - Dead) 2023-05-16 - Referred to Natural Resources & Economic Development [HB1054 Detail]

Download: Texas-2023-HB1054-Engrossed.html
  88R2990 RDS-F
 
  By: Turner H.B. No. 1054
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the classification of certain construction workers and
  the eligibility of those workers for unemployment benefits;
  providing an administrative penalty.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subchapter E, Chapter 201, Labor Code, is
  amended by adding Section 201.079 to read as follows:
         Sec. 201.079.  SERVICE BY INDEPENDENT CONTRACTOR IN
  CONSTRUCTION. (a) In this section, "construction" has the meaning
  assigned by Section 301.201.
         (b)  In this subtitle, "employment" does not include
  construction performed by an individual as an independent
  contractor.
         SECTION 2.  Chapter 301, Labor Code, is amended by adding
  Subchapter L to read as follows:
  SUBCHAPTER L.  CLASSIFICATION OF INDIVIDUAL EMPLOYED IN
  CONSTRUCTION
         Sec. 301.201.  DEFINITIONS.  In this subchapter:
               (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.
               (3)  "Employee" has the meaning assigned by Section
  61.001.
         Sec. 301.202.  APPLICABILITY. (a) An individual may not be
  considered an employee based solely on the fact that the person for
  whom the individual is providing construction services requires
  that any employee hired by the individual must:
               (1)  submit to a criminal background check or
  preemployment drug screening; or
               (2)  possess a certain license or certification
  relating to the work the employee will perform.
         (b)  A person for whom an individual is providing
  construction services is not required to report to the commission
  under Subtitle A that the individual is an employee of the person if
  the person:
               (1)  shows that the individual is an independent
  contractor;
               (2)  provides to the individual an Internal Revenue
  Service Form 1099, or a similar form issued by, or that meets the
  compliance guidelines of, the Internal Revenue Service, on which
  the person reports the amount paid to the individual in accordance
  with Internal Revenue Service requirements; and
               (3)  files the form described by Subdivision (2) with
  the Internal Revenue Service in accordance with Internal Revenue
  Service requirements.
         (c)  This subchapter does not apply to services performed by
  an individual in the employ of:
               (1)  a state, a political subdivision of a state, or an
  Indian tribe or an instrumentality of a state, political
  subdivision of a state, or Indian tribe that is wholly owned by one
  or more states, political subdivisions, or Indian tribes, provided
  that the services are excluded from employment as defined in the
  Federal Unemployment Tax Act (26 U.S.C. Section 3301 et seq.)
  solely because of Section 3306(c)(7) of that Act; or
               (2)  a religious, charitable, educational, or other
  organization, provided that the services are excluded from
  employment as defined in the Federal Unemployment Tax Act (26
  U.S.C. Section 3301 et seq.) solely because of Section 3306(c)(8)
  of that Act.
         Sec. 301.203.  EMPLOYEE STATUS. A contractor shall properly
  classify each individual providing construction services as either
  an employee or an independent contractor in accordance with
  commission rules.
         Sec. 301.204.  INFORMATION REGARDING COMPLAINTS. The
  commission shall provide on its Internet website information
  regarding the procedure for the public to report violations of this
  subchapter.
         Sec. 301.205.  ADMINISTRATIVE PENALTY. (a) The commission
  may impose an administrative penalty on a contractor who violates
  Section 301.203.  The amount of the penalty may not exceed:
               (1)  $100 for each individual who is not properly
  classified; and
               (2)  $1,000 for each individual who is not properly
  classified for each subsequent violation that occurs after the
  imposition of a penalty for a prior violation.
         (b)  Any penalty issued under this section applies to a
  successor business entity that:
               (1)  has one or more owners who jointly control at least
  50 percent of the:
                     (A)  original employer; and
                     (B)  successor business entity; 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. 301.206.  NOTIFICATION TO GOVERNMENTAL ENTITY.  If the
  commission determines that a contractor has violated this
  subchapter, the commission shall provide notice of the violation to
  each governmental entity that the commission reasonably believes
  has received construction services provided by the contractor.  The
  notice must identify the contractor and, for each violation,
  specify the type of service provided and the location at which the
  service was provided, if known to the commission.  In this section,
  "governmental entity" has the meaning assigned by Section 406.096.
         Sec. 301.207.  ANNUAL REPORT. The commission shall issue an
  annual report regarding compliance with and enforcement of this
  subchapter. The report must include:
               (1)  the number of complaints received from the public;
               (2)  the number of investigated complaints and any
  resulting findings; and
               (3)  the amount of unemployment taxes, interest,
  administrative penalties, and fines actually collected as a result
  of:
                     (A)  violations of this subchapter; or
                     (B)  the exclusion of construction performed by an
  individual from the application of Subtitle A, unless the services
  are excluded by application of Section 201.079.
         SECTION 3.  The change in law made by this Act applies only
  to a claim for unemployment compensation benefits that is filed
  with the Texas Workforce Commission on or after the effective date
  of this Act. A claim filed before the effective date of this Act is
  governed by the law in effect on the date the claim was filed, and
  the former law is continued in effect for that purpose.
         SECTION 4.  This Act takes effect September 1, 2023.
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