Employer Requirements and Restrictions
The bill would also place the following requirements and restrictions on employers:
- No employer shall fail to designate an individual who performs services for the employer as an employee unless the individual’s services are excluded from employment under the proposed uniform definition.
- The director of commerce shall not use an employer’s failure to withhold federal or state income taxes with respect to an individual or to include remuneration paid to an individual on workers’ compensation and unemployment compensation reports when making a determination as to whether the employer violated this division.
- The director shall not use an individual’s election to obtain workers’ compensation coverage as a sole proprietor or a partnership in making a determination as to whether the individual has violated this division.
- The burden of proof is on the party asserting that an individual is not an employee.
- No employer shall retaliate through discharge, or in any other manner, against any individual for exercising any rights granted under this bill.
- No employer shall retaliate against an individual if the individual does any of the following:
- Makes a complaint to an employer, coworker, community organization, or to a federal or state agency or at a public hearing, stating that provisions of this chapter allegedly have been violated;
- Causes to be instituted any proceeding under or related to this chapter;
- Testifies or prepares to testify in an investigation or proceeding under this chapter;
- Opposes misclassification.
- No employer shall attempt to cause or cause an individual to waive the provisions of this bill or to enter into a predispute waiver.
- No employer shall violate a rule adopted by the director for the administration and enforcement of this bill.
- No person shall require or request an individual to enter into an agreement or sign a document that results in the misclassification of the individual as an independent contractor or otherwise does not accurately reflect the individual’s relationship with an employer.
Application to Construction Services
The provisions of this bill also apply to all subcontractors or lower tier subcontractors.
A contractor is liable for the failure of any subcontractor or lower tier subcontractor to properly classify individuals performing services related to construction as employees. A subcontractor is liable for the failure of any lower tier subcontractor to properly classify individuals performing services related to construction as employees.
For purposes of the above, â€œcontractor” means any sole proprietorship, partnership, firm, corporation, limited liability company, association, or other entity permitted by law to do business within this state that engages in construction. “Contractor” does not include:
- The state or its officers, agencies, or political subdivisions;
- The federal government.
“Subcontractor” means any person who undertakes to perform construction services under a contract with any individual other than the owner, part owner, or lessee.
Complaint Procedures, Investigations, and Hearings
Any aggrieved party, including employees that believe they have been injured by an employer’s alleged violation, may file a complaint with the director of commerce against an employer if the aggrieved party reasonably believes that the employer is in violation of any of the employer requirements and restrictions in this bill.
Any investigator employed by the division of industrial compliance within the department of commerce is authorized to do both of the following:
- Visit and inspect, at all reasonable times, all of the offices and job sites maintained by the employer who is the subject of the complaint;
- Inspect and audit, at all reasonable times, all documents necessary to determine whether an individual performing services for the employer is an employee.
The director may compel, by subpoena, the attendance and testimony of witnesses and the production of books, payrolls, records, papers, and other evidence in any investigation, and may administer oaths to witnesses.
Upon completion of an investigation, the investigator shall submit the results to the superintendent of industrial compliance. If the superintendent determines that reasonable evidence of a violation exists, the superintendent shall send a written notice to the director of commerce. Within seven days after receiving a written report, the director shall send a written notice to the employer who is the subject of the investigation specifying that a hearing will be held and specifying the date, time, and place of the hearing. If an employer who allegedly committed a violation fails to appear for a hearing, the director may request the court of common pleas of the county where the alleged violation occurred to compel the person to appear before the director for a hearing.
Penalties – Generally
If the director, after the hearing, determines a violation has occurred, the director may discipline the employer by doing any of the following:
- Issue and cause to be served on any party an order to cease and desist from further violation of that section;
- Take affirmative or other action the director considers reasonable to eliminate the effect of the violation;
- Collect the amount of any wages, salary, employment benefits, or other compensation denied or lost to an individual because the employer misclassified the individual;
- Assess a civil penalty in the amount of:
- $1,500 for each violation.
- If the violation occurred within five years after the date the director made a determination that resulted in the director assessing the employer a civil penalty, not less than $1,500 or more than $2,500 for each violation found by the director that occurred during that five-year period.
- Each violation constitutes a separate violation for each individual or rule involved and for each day the violation continues.
- The director shall base the amount of the civil penalty assessed upon the director’s determination of the gravity of the violations committed by the employer.
If the director assesses an employer a civil penalty for a violation and the employer fails to pay that civil penalty within the time period prescribed by the director, the director shall forward to the attorney general the name of the employer and the amount of the civil penalty for the purpose of collecting that civil penalty. In addition to the civil penalty assessed pursuant to this section, the employer also shall pay any fee assessed by the attorney general for collection of the civil penalty.
The director’s determination of a violation is an order that the person may appeal.
Penalties – Knowing Violations or Obstruction of Inspection
If anyone knowingly commits a violation, or obstructs the director of commerce or any other person authorized to inspect places of employment they are liable for up to double the normal penalties. Additionally, they are also liable to the employee who was injured by the employer’s violation for punitive damages in an amount equal to the amount of the penalties assessed against the employer in the previous sentence. The director shall impose the penalties described in this paragraph if a preponderance of the evidence demonstrates that the employer acted knowingly when committing the violation.
An employer or person that knowingly violates any of the employer requirements or restrictions, excluding the prohibition on waivers, for the first offense, is guilty of a misdemeanor of the fourth degree. For any subsequent violation committed within a five-year period beginning on the date the employer or person previously was convicted of or pleaded guilty to the first violation, the employer or entity is guilty of a felony of the fifth degree. Whoever violates the prohibition on waivers is guilty of a misdemeanor of the fourth degree. If the director of commerce determines that an alleged violation has occurred that may result in the penalties in this paragraph, the director shall refer the matter to the appropriate prosecutorial authority.
If the director of commerce believes that any employer allegedly has violated a valid order issued by the director, the director may commence an action in the court of common pleas in the county where the alleged violation has occurred and obtain from the court an order compelling the employer to obey the order of the director or be found guilty of contempt of court and punished accordingly.
An aggrieved party may bring a civil action, on behalf of the aggrieved party or on behalf of any other individual who is similarly situated to the aggrieved party, in the court of common pleas in the county where the alleged violation occurred or where any individual who is party to the action resides, without regard to exhaustion of any alternative administrative remedies provided in this bill. An aggrieved party shall bring such action not later than three years after the last day the aggrieved individual or individual for whom the aggrieved party is bringing the action performed services for an employer who has allegedly committed a violation. The three-year period is tolled if the employer has deterred the ability of an individual to bring an action under this section or to file a complaint.
If a court or a jury in such civil action determines that a violation has occurred, the court shall award to the plaintiff all of the following:
- The amount of any wages, salary, employment benefits, or other compensation denied or lost to an individual by reason of the violation, plus an equal amount in liquidated damages;
- Compensatory damages and an amount up to $500 for each violation;
- In the case of a violation of the prohibitions on retaliation, all legal or equitable relief that the court determines appropriate;
- Attorney’s fees and costs.
If the director of commerce has determined that an employer is subject to a civil penalty for a violation, an aggrieved party, within ninety days after the director issues that determination, may bring a civil action in the court of common pleas in the county where the violation occurred to enforce that penalty. If an aggrieved party elects to bring such an action, the aggrieved party shall notify the director of that election in writing. During that ninety-day period, the attorney general shall not bring an action to enforce that penalty. After the ninety-day period expires, only the attorney general, on behalf of the director and in accordance with this chapter, may bring an action to collect the civil penalty. In any civil action brought by an aggrieved party pursuant to this paragraph, the court shall award the aggrieved party ten percent of the amount of the penalty owed by the employer, and the remaining amount recovered shall be awarded to the director.
List of Violators
The director of commerce shall create a list of employers who have committed multiple violations. The director shall add an employer’s name to the list if the director assesses against the employer a civil penalty for a violation that occurred within five years after the date the director made a determination that resulted in the assessment of a previous civil penalty. The list shall include the name of the employer and the date that the employer committed the employer’s most recent violation. The director shall notify an employer that the employer will be added to this list within five days after the director determines that the employer will be added to the list. The director shall publish the list on the web site maintained by the department of commerce. No state agency shall enter into a contract with an employer included in that list for a period of four years after the date of the employer’s most recent violation. The director shall remove an employer’s name and information from the list upon expiration of the time period of the employer’s debarment.
Required Sharing of Information Between State Agencies
The director of commerce, the director of job and family services, the tax commissioner, and the administrator of workers’ compensation shall share information concerning any suspected misclassification by an employer or entity of one or more of the employer’s employees as independent contractors. Upon determining that an employer has misclassified an employee as an independent contractor, the director of commerce shall notify the director of job and family services, the tax commissioner, and the administrator, each of whom shall determine whether the employer’s violation results in the employer not complying with the requirements of the various areas of law to which this bill applies. The director of commerce shall make that determination with respect to minimum wage, payments of wages, and prevailing wages laws. The determination made by the director of commerce that an employer has misclassified an employee as an independent contractor is binding on the director of job and family services, the tax commissioner, and the administrator unless the individual is otherwise not considered an employee under the applicable law.
Limitations of Bill
Nothing in this bill shall be construed as to limit the application of any other remedies available at law or in equity.