Last Friday, Governor Perry signed House Bill 2015, which creates penalties for employers who misclassify their employees as independent contractors on state contracts. This hallmark legislation marks the first time Texas has ever enacted a law creating a penalty for misclassification of workers as independent contractors. Misclassification, also known as payroll fraud, occurs when employers illegally classify workers as independent contractors and fail to deduct payroll taxes. Payroll fraud strips workers of their basic protections under the law, shifts the tax burden to working families, and results in over $1 billion in lost state and federal taxes from the construction industry alone. Check out this video to learn more about payroll fraud.
WDP collaborated with the Texas Workforce Commission and construction industry groups to pressure the legislature to take up and pass this important bill. Our groundbreaking report Build a Better Texas: Construction Working Conditions in the Lone Star State made the case for legislation to crack down on payroll fraud. Click here for the report. The new law will take effect on January 1st, 2014 and will pave the way for our efforts to ensure that all Texas workers are treated fairly on the job.