Bill Text: TX HB2989 | 2011-2012 | 82nd Legislature | Comm Sub

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Bill Title: Relating to establishing the Workplace Fraud Prevention Act; providing penalties.

Sponsorship: Bipartisan Bill

Status: (Introduced - Dead) 2011-05-06 - Considered in Calendars [HB2989 Detail]

Download: Texas-2011-HB2989-Comm_Sub.html

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82R19592 RWG-F
By: Deshotel H.B. No. 2989
Substitute the following for H.B. No. 2989:
By: Quintanilla C.S.H.B. No. 2989

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 313 to read as follows:
CHAPTER 313. WORKPLACE FRAUD PREVENTION ACT
Sec. 313.001. SHORT TITLE. This chapter may be cited as the
Workplace Fraud Prevention Act.
Sec. 313.002. 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, unless it is shown to
the satisfaction of the commission that the individual's
performance of the service has been and will continue to be free
from control or direction under the contract and in fact.
(4) "Independent contractor" means a person lawfully
engaged in business who performs a 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 social security number and:
(i) has unique skills; or
(ii) owns and operates a significant
investment in equipment.
(5) "Performing service" means the performance of
construction service for payment.
Sec. 313.003. APPLICABILITY. 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.
Sec. 313.004. EMPLOYEE STATUS. A contractor shall properly
classify an individual performing construction services as an
employee.
Sec. 313.005. 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
corporation, or other business entity, or pay or collect a fee for
use of a corporation, partnership, limited liability corporation,
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. 313.006. TELEPHONE HOTLINE AND INTERNET WEBSITE. The
commission shall provide a toll-free telephone number and website
for use by the public in reporting violations of this chapter.
Information obtained by the commission under this chapter is
confidential.
Sec. 313.007. DUTY TO INVESTIGATE. The commission shall
investigate, in a timely manner, any credible complaint made under
Section 313.006 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. 313.008. ADMINISTRATIVE PENALTY. (a) If the
commission determines that a contractor or other person has
violated this chapter, the contractor or other person shall pay to
the commission a penalty in an amount not to exceed:
(1) $500 per individual who is not properly designated
as an employee of the contractor for the first violation of Section
313.005(1);
(2) $5,000 per individual who is not properly
designated as an employee of the contractor for each subsequent
violation of Section 313.005(1);
(3) $500 for the first violation of Section 313.005(2)
or (3); and
(4) $5,000 for each subsequent violation of Section
313.005(2) or (3).
(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. 313.009. 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 interagency agreements
with another state agency and adopt any rules necessary to
administer this section.
Sec. 313.010. 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 website under Section 313.006;
(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 313.009 and the outcomes of those
referrals.
(b) The commission shall submit the report annually to the
governor and legislature.
Sec. 313.011. 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. 313.012. 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 attesting
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 pursuant to the contract follow the provisions of this
chapter.
(b) Violation of this section by a contractor is grounds for
rescission of the contract by the state or political subdivision.
(c) A contractor who knowingly provides a false affidavit
under Subsection (a) is subject to the penalty of perjury for the
first violation and shall be barred from contracting with this
state or a political subdivision of this state for three years on a
subsequent violation.
Sec. 313.013. 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
313.008.
SECTION 2. Section 313.012, 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, 2011.