AB939: Bill Text

LRB-4644/1

GMM&JTK:bjk:rs

2009 - 2010 LEGISLATURE

2009 Assembly BILL 939

April 7, 2010 - Introduced by Representatives Parisi, Sinicki and Van Akkeren, cosponsored by Senators Wirch, Coggs, Hansen and Lehman. Referred to Committee on Labor.

AB939,1,4 An Act to amend 103.005 (10); and to create 103.06 of the statutes; relating to: compliance by employers with certain laws whose enforcement depends on the proper classification of persons as employees or nonemployees and providing penalties.

Analysis by the Legislative Reference Bureau

Under current law, an employer engaged in the construction of roads, bridges, highways, sewers, water mains, utilities, public buildings, factories, housing, or similar construction projects (employer) who misclassifies an employee as a nonemployee willfully and with intent to evade any requirements of the laws relating to worker's compensation or unemployment insurance is subject to a $25,000 fine for each violation.

This bill requires the Department of Workforce Development (DWD), for purposes of promoting and achieving compliance by employers with certain employment laws through the proper classification of persons performing services for an employer as employees and nonemployees, to do all of the following:

1. Educate employers, employees, nonemployees, and the public about the proper classification of persons performing services for an employer as employees and nonemployees.

2. Refer complaints of misclassification of employees as nonemployees to other state or local agencies that administer laws whose enforcement depends on the proper classification of employees and cooperate with those state or local agencies in the investigation and enforcement of those laws.

The bill also permits DWD, for purposes of ensuring that an employer is properly classifying the persons performing services for the employer as employees and nonemployees, to investigate allegations that an employer is in violation of certain requirements under the employment laws. Those requirements (employment law requirements) are as follows:

1. That the employer is maintaining records identifying all persons performing work for the employer, including the name, address, and social security number of each of those persons.

2. That the employer is maintaining worker's compensation coverage for its employees as required under the worker's compensation law.

3. That the employer has provided to DWD the information that employers are required to provide with respect to newly hired employees.

4. That the employer is maintaining records of the hours worked by its employees, the wages paid to those employees, any deductions from those wages, and any other information that the employer is required to keep under rules promulgated by DWD relating to hours of labor and the minimum wage, and is listing deductions from wages as required under current law.

5. That the employer is in compliance with the unemployment insurance laws.

If DWD determines that an employer has failed to demonstrate compliance with the employment law requirements, DWD may serve on the employer a notice of DWD's intent to issue an order requiring the employer to stop work (stop work order) at the locations specified in the notice. The notice must advise the employer that the stop work order will be issued within three business days after the date of the notice unless the employer provides information satisfactory to DWD indicating that the employer is in compliance with the employment law requirements at each location specified in the notice.

If within three business days after service of the notice an employer does not demonstrate compliance with the employment law requirements, DWD may serve a stop work order on the employer, which takes effect as provided in the order unless the employer appeals the order by requesting a hearing to review the stop work order, in which case the stop work order is automatically stayed until the date on which a decision on the appeal is issued. An employer that does not stop work as required under a stop work order may be required to forfeit $250 for each day beginning on the day on which the stop work order is served and ending on the day on which the employer provides evidence satisfactory to DWD that it has stopped work or is in compliance with the employment law requirements, whichever occurs first. The stop work order remains in effect until the employer provides evidence satisfactory to DWD that it is in compliance with the employment law requirements and pays the forfeiture required under the bill.

A request for a hearing to review a stop work order must be filed within ten days after service of the order. If a request for a hearing is filed within those ten days, an appeal tribunal, which is an attorney licensed to practice in this state who is appointed by DWD to conduct review hearings, must hold the hearing within 14 days after receipt of the request and issue a decision in writing within seven days after the hearing affirming, reversing, or modifying the order to stop work and forfeiture. If the appeal tribunal finds that the employer has not complied with the employment law requirements, the automatic stay of the stop work order is lifted and the order remains in effect until the employer provides evidence satisfactory to DWD that the employer is in compliance with the employment law requirements and pays the forfeiture.

The employer or DWD may request a review of an appeal tribunal's decision by petitioning the Labor and Industry Review Commission (LIRC) for review of the decision within 21 days after the decision was mailed to the employer's last-known address and may commence an action for the judicial review of a decision of LIRC within 30 days after the decision was mailed to the employer's last-known address. A stop work order that is in effect remains in effect during the pendency of a review by LIRC or an action for judicial review. An employer that violates a final stop work order of DWD or final decision of an appeal tribunal, LIRC, or a court affirming such an order is subject to a forfeiture of $1,000 for each day of violation. An employer may seek review of a forfeiture imposed for a violation of a final stop work order or final decision affirming such an order in the same manner as an initial stop work order is reviewed under the bill.

Finally, the bill provides that an investigation, order, or decision under the bill does not preclude or otherwise impair or affect any other action that is required or permitted under the employment laws of this state to enforce a requirement under any of those laws.

For further information see the state fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB939, s. 1 Section 1. 103.005 (10) of the statutes, as affected by 2009 Wisconsin Act 3, is amended to read:

AB939,3,6 103.005 (10) Except as provided in ss. 103.06 (5) (d), 103.275 (2) (bm) and (br), 103.34 (10) (b) and (c), 103.91 (4) (b) and (c), 103.92 (6) and (7), 104.07 (5) and (6), and 105.13 (2) and (3), orders of the department under chs. 103 to 106 shall be subject to review in the manner provided in ch. 227.

AB939, s. 2 Section 2. 103.06 of the statutes is created to read:

AB939,3,8 103.06 Worker classification compliance. (1) Definitions. In this section:

AB939,3,10 (a) "Business day" means any day on which the offices of the department are open.

AB939,4,1 (b) "Employee" means any of the following who is employed by an employer:

AB939,4,3 1. For purposes of compliance with the requirement specified in sub. (3) (a) 1., an employee, as defined in s. 103.001 (5).

AB939,4,5 2. For purposes of compliance with the requirement specified in sub. (3) (a) 2., an employee, as defined in s. 102.07.

AB939,4,7 3. For purposes of compliance with the requirement specified in sub. (3) (a) 3., an employee, as defined in rules promulgated under s. 103.05.

AB939,4,9 4. For purposes of maintaining records under sub. (3) (a) 4. as required under rules promulgated under s. 103.02, an employee, as defined in s. 103.001 (5).

AB939,4,11 5. For purposes of maintaining records under sub. (3) (a) 4. as required under rules promulgated under s. 104.04, an employee, as defined in s. 104.01 (2).

AB939,4,13 6. For purposes of listing deductions from wages under sub. (3) (a) 4. as required under s. 103.457, an employee, as defined in s. 103.001 (5).

AB939,4,15 7. For purposes of compliance with the requirement specified in sub. (3) (a) 5., an employee, as defined in s. 108.02 (12).

AB939,4,17 (c) "Employer" means any of the following that is engaged in the work described in s. 108.18 (2) (c):

AB939,4,19 1. For purposes of compliance with the requirement specified in sub. (3) (a) 1., an employer, as defined in s. 103.001 (6).

AB939,4,21 2. For purposes of compliance with the requirement specified in sub. (3) (a) 2., an employer, as defined in s. 102.04.

AB939,4,23 3. For purposes of compliance with the requirement specified in sub. (3) (a) 3., an employer, as defined in rules promulgated under s. 103.05.

AB939,4,25 4. For purposes of maintaining records under sub. (3) (a) 4. as required under rules promulgated under s. 103.02, an employer, as defined in s. 103.01 (1).

AB939,5,2 5. For purposes of maintaining records under sub. (3) (a) 4. as required under rules promulgated under s. 104.04, an employer, as defined in s. 104.01 (3).

AB939,5,4 6. For purposes of listing deductions from wages under sub. (3) (a) 4. as required under s. 103.457, an employer, as defined in s. 103.001 (6).

AB939,5,6 7. For purposes of compliance with the requirement specified in sub. (3) (a) 5., an employer, as defined in s. 108.02 (13).

AB939,5,10 (2) Worker classification compliance; duties of department. For purposes of promoting and achieving compliance by employers with the laws specified in sub. (3) (a) through the proper classification of persons performing services for an employer as employees and nonemployees, the department shall do all of the following:

AB939,5,13 (a) Educate employers, employees, nonemployees, and the public about the proper classification of persons performing services for an employer as employees and nonemployees.

AB939,5,18 (b) Receive and investigate complaints alleging violations of the requirements specified in sub. (3) (a), or investigate any such alleged violations on its own initiative, and, if the department finds that an employer is in violation of a requirement specified in sub. (3) (a), order the employer to stop work and pay a forfeiture as provided under sub. (5).

AB939,5,21 (c) Refer complaints of misclassification of employees as nonemployees to other state or local agencies that administer laws whose enforcement depends on the proper classification of employees.