Contract Compliance: Preventing Misclassification of Workers
Act
Issue: Defending Workers & Families
Target Level of Office: State
Policy Origin: Texas State Legislature
Poilcy/Bill Number: House Bill 2015
Link: www.YEONetwork.org/2013policy/?i=196
Summary Narrative of the Policy: This bill establishes and enforces the proper classification of
workers performing services in connection with government contracts, and provides a penalty
for contractors found in violation.
Relevant Talking Points & Important Information:
• According to the U.S. Department of Labor, the misclassification of employees as
something other than employees, such as independent contractors, presents a serious
problem for affected employees, employers, and to the entire American economy.
Misclassified employees are often denied access to critical benefits and protections to
which they are entitled, such as family and medical leave, overtime, minimum wage, and
unemployment insurance.
• In addition to these workplace protection losses, misclassified employees also lose the
right to join a union, face an increased tax burden, often suffer from wage theft, and may
have no recourse for workplace injury violations and disability-related disputes.
• Misclassification is an increasing trend and often a cost-cutting measure taken on by the
employer. It is, in fact, a tax dodge because it causes federal, state, and local governments
to suffer revenue losses. Additionally, employers may misclassify workers as a way to
circumvent workplace civil rights including prohibitions of employment discrimination
based on age, race, gender, or disability.
• Chaptered in 2013, this law enacts a $200 penalty for each misclassified worker.
16
State Level
Policy
2014 Book