Bill Text: TX HB3656 | 2021-2022 | 87th Legislature | Comm Sub
Bill Title: Relating to the classification of certain construction workers and the eligibility of those workers for unemployment benefits; providing penalties.
Spectrum: Partisan Bill (Democrat 12-0)
Status: (Introduced - Dead) 2021-05-13 - Statement(s) of vote recorded in Journal [HB3656 Detail]
Download: Texas-2021-HB3656-Comm_Sub.html
| 87R20656 RDS-F | |||
| By: Turner of Tarrant | H.B. No. 3656 | ||
| Substitute the following for H.B. No. 3656: | |||
| By: Turner of Tarrant | C.S.H.B. No. 3656 | ||
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| relating to the classification of certain construction workers and | ||
| the eligibility of those workers for unemployment benefits; | ||
| providing penalties. | ||
| 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, 2021. | ||
