YEO Policy Books 2014 Policy Book | Page 16

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