LRB-4432/2
GMM&JTK:bjk:md
2009 - 2010 LEGISLATURE
April 7, 2010 - Introduced by Senators Wirch, Coggs, Hansen and Lehman,
cosponsored by Representatives
Parisi, Sinicki and
Van Akkeren. Referred to
Committee on Labor, Elections and Urban Affairs.
SB672,1,4
1An Act to amend 103.005 (10); and
to create 103.06 of the statutes;
relating
2to: compliance by employers with certain laws whose enforcement depends on
3the proper classification of persons as employees or nonemployees and
4providing 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:
SB672,3,63
103.005
(10) Except as provided in ss.
103.06 (5) (d), 103.275 (2) (bm) and (br),
4103.34 (10) (b) and (c), 103.91 (4) (b) and (c), 103.92 (6) and (7), 104.07 (5) and (6), and
5105.13 (2) and (3), orders of the department under chs. 103 to 106 shall be subject to
6review in the manner provided in ch. 227.
SB672, s. 2
7Section
2. 103.06 of the statutes is created to read:
SB672,3,8
8103.06 Worker classification compliance. (1) Definitions. In this section:
SB672,3,109
(a) "Business day" means any day on which the offices of the department are
10open.
SB672,4,1
1(b) "Employee" means any of the following who is employed by an employer:
SB672,4,32
1. For purposes of compliance with the requirement specified in sub. (3) (a) 1.,
3an employee, as defined in s. 103.001 (5).
SB672,4,54
2. For purposes of compliance with the requirement specified in sub. (3) (a) 2.,
5an employee, as defined in s. 102.07.
SB672,4,76
3. For purposes of compliance with the requirement specified in sub. (3) (a) 3.,
7an employee, as defined in rules promulgated under s. 103.05.
SB672,4,98
4. For purposes of maintaining records under sub. (3) (a) 4. as required under
9rules promulgated under s. 103.02, an employee, as defined in s. 103.001 (5).
SB672,4,1110
5. For purposes of maintaining records under sub. (3) (a) 4. as required under
11rules promulgated under s. 104.04, an employee, as defined in s. 104.01 (2).
SB672,4,1312
6. For purposes of listing deductions from wages under sub. (3) (a) 4. as required
13under s. 103.457, an employee, as defined in s. 103.001 (5).
SB672,4,1514
7. For purposes of compliance with the requirement specified in sub. (3) (a) 5.,
15an employee, as defined in s. 108.02 (12).
SB672,4,1716
(c) "Employer" means any of the following that is engaged in the work described
17in s. 108.18 (2) (c):
SB672,4,1918
1. For purposes of compliance with the requirement specified in sub. (3) (a) 1.,
19an employer, as defined in s. 103.001 (6).
SB672,4,2120
2. For purposes of compliance with the requirement specified in sub. (3) (a) 2.,
21an employer, as defined in s. 102.04.
SB672,4,2322
3. For purposes of compliance with the requirement specified in sub. (3) (a) 3.,
23an employer, as defined in rules promulgated under s. 103.05.
SB672,4,2524
4. For purposes of maintaining records under sub. (3) (a) 4. as required under
25rules promulgated under s. 103.02, an employer, as defined in s. 103.01 (1).
SB672,5,2
15. For purposes of maintaining records under sub. (3) (a) 4. as required under
2rules promulgated under s. 104.04, an employer, as defined in s. 104.01 (3).
SB672,5,43
6. For purposes of listing deductions from wages under sub. (3) (a) 4. as required
4under s. 103.457, an employer, as defined in s. 103.001 (6).
SB672,5,65
7. For purposes of compliance with the requirement specified in sub. (3) (a) 5.,
6an employer, as defined in s. 108.02 (13).
SB672,5,10
7(2) Worker classification compliance; duties of department. For purposes of
8promoting and achieving compliance by employers with the laws specified in sub. (3)
9(a) through the proper classification of persons performing services for an employer
10as employees and nonemployees, the department shall do all of the following:
SB672,5,1311
(a) Educate employers, employees, nonemployees, and the public about the
12proper classification of persons performing services for an employer as employees
13and nonemployees.
SB672,5,1814
(b) Receive and investigate complaints alleging violations of the requirements
15specified in sub. (3) (a), or investigate any such alleged violations on its own
16initiative, and, if the department finds that an employer is in violation of a
17requirement specified in sub. (3) (a), order the employer to stop work and pay a
18forfeiture as provided under sub. (5).
SB672,5,2119
(c) Refer complaints of misclassification of employees as nonemployees to other
20state or local agencies that administer laws whose enforcement depends on the
21proper classification of employees.
SB672,5,2422
(d) Cooperate with other state or local agencies in the investigation and
23enforcement of laws whose enforcement depends on the proper classification of
24employees.
SB672,6,2
1(e) Appoint attorneys licensed to practice in this state as appeal tribunals to
2conduct hearings and issue decisions under sub. (6) (b).
SB672,6,6
3(3) Compliance requirements. (a) For purposes of ensuring that an employer
4is properly classifying the persons performing services for the employer as employees
5and nonemployees, the department may require an employer to prove all of the
6following: