Current law requires DWD to assess an administrative penalty against an
employer engaged in construction projects or in the painting or drywall finishing of
buildings or other structures who knowingly and intentionally provides false
information to DWD for the purpose of misclassifying or attempting to misclassify
an individual who is an employee of the employer as a nonemployee under the UI law.
The penalty under current law is $500 for each employee who is misclassified, not
to exceed $7,500 per incident. Current law additionally requires DWD to assess an
administrative penalty against such an employer who, through coercion, requires an
individual to adopt the status of a nonemployee in the amount of $1,000 for each
individual so coerced, but not to exceed $10,000 per calendar year. Penalties are
deposited in the unemployment program integrity fund.
The bill removes the $7,500 and $10,000 limitations on these penalties and
provides that the penalties double for each act occurring after the date of the first
determination of a violation. The bill also removes the limitations on the types of
employers that the penalties apply to, allowing them to be assessed against any type
of employer that violates the above prohibitions.
Worker's compensation; penalties for uninsured employers
Under current law, DWD is required to assess an administrative penalty
against an employer who requires an employee to pay for any part of worker's
compensation insurance or who fails to provide mandatory worker's compensation
insurance coverage. If the employer violates those requirements, for the first 10
days, the penalty under current law is not less than $100 and not more than $1,000
for such a violation. If the employer violates those requirements for more than 10
days, the penalty under current law is not less than $10 and not more than $100 for
each day of such a violation.
The bill provides that the penalty for violations occurring after the second such
violation is $3,000 per violation, or three times the amount of the insurance premium
that would have been payable, whichever is greater. The bill also provides that the
penalty for violations occurring after the third such violation is $4,000 per violation,
or four times the amount of the insurance premium that would have been payable,
whichever is greater.
Also under current law, if an employer who is required to provide worker's
compensation insurance coverage provides false information about the coverage to
his or her employees or contractors who request information about the coverage, or
who fails to notify a person who contracts with the employer that the coverage has
been canceled in relation to the contract, DWD is required to assess a penalty of not
less than $100 and not more than $1,000 for each such violation.
The bill provides that the penalty for violations occurring after the third such
violation is $3,000 per violation, and $4,000 for violations occurring after the fourth
such violation.

Worker misclassification outreach
The bill requires the Department of Administration to direct state agencies,
constitutional offices, departments, independent agencies, and societies,
associations, and certain other agencies of state government for which
appropriations are made by law, to provide educational outreach regarding worker
misclassification to employers, workers, and organizations that serve vulnerable
populations.
Worker misclassification information
The bill requires the Department of Financial Institutions to provide
informational materials and resources on worker misclassification to each person
who files with DFI documents forming a business corporation, nonstock corporation,
limited liability company, limited liability partnership, or limited partnership.
For further information see the state and local 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:
AB1128,1 1Section 1 . 16.40 (24) of the statutes is created to read:
AB1128,3,82 16.40 (24) Worker misclassification outreach. Direct all departments to
3provide targeted educational outreach regarding worker misclassification in
4English, Spanish, and other languages spoken by a significant number of individuals
5in this state, to employers, workers, and organizations that serve vulnerable
6populations, including individuals with limited English proficiency. The outreach
7shall emphasize the appropriate departments to contact and the rights of individuals
8to remain anonymous when reporting worker misclassification.
AB1128,2 9Section 2 . 102.85 (1) (a) of the statutes is amended to read:
AB1128,3,1310 102.85 (1) (a) An For each act occurring before the date of the first
11determination of a violation of this subsection, an
employer who fails to comply with
12s. 102.16 (3) or 102.28 (2) for less than 11 days shall forfeit not less than $100 nor and
13not
more than $1,000.
AB1128,3 14Section 3 . 102.85 (1) (b) of the statutes is amended to read:
AB1128,4,5
1102.85 (1) (b) An For each act occurring after the date of the first or second
2determination of a violation of this subsection, an
employer who fails to comply with
3s. 102.16 (3) or 102.28 (2) for more than 10 days shall forfeit not less than $10 nor and
4not
more than $100 for each day on which the employer fails to comply with s. 102.16
5(3) or 102.28 (2).
AB1128,4 6Section 4 . 102.85 (1) (c) of the statutes is created to read:
AB1128,4,107 102.85 (1) (c) For each act occurring after the date of the 3rd determination of
8a violation of this subsection, the employer shall be assessed a penalty in the amount
9of $3,000 for each act, or 3 times the amount of the premium that would have been
10payable, whichever is greater.
AB1128,5 11Section 5 . 102.85 (1) (d) of the statutes is created to read:
AB1128,4,1512 102.85 (1) (d) For each act occurring after the date of the 4th determination of
13a violation of this subsection, the employer shall be assessed a penalty in the amount
14of $4,000 for each act, or 4 times the amount of the premium that would have been
15payable, whichever is greater.
AB1128,6 16Section 6 . 102.85 (2) (intro.) of the statutes is amended to read:
AB1128,4,2017 102.85 (2) (intro.) An For each act occurring after the date of the first
18determination under this subsection, an
employer who is required to provide
19worker's compensation insurance coverage under this chapter shall forfeit not less
20than $100 nor and not more than $1,000 if the employer does any of the following:
AB1128,7 21Section 7 . 102.85 (2j) of the statutes is created to read:
AB1128,4,2422 102.85 (2j) For each act occurring after the date of the 3rd determination under
23sub. (2), an employer who is required to provide worker's compensation insurance
24coverage under this chapter shall forfeit $3,000 per violation.
AB1128,8 25Section 8 . 102.85 (2k) of the statutes is created to read:
AB1128,5,3
1102.85 (2k) For each act occurring after the date of the 4th determination
2under sub. (2), an employer who is required to provide worker's compensation
3insurance coverage under this chapter shall forfeit $4,000 per violation.
AB1128,9 4Section 9 . 103.005 (4m) of the statutes is created to read:
AB1128,5,75 103.005 (4m) (a) The department shall design and make available to employers
6a notice regarding worker classification laws, requirements for employers and
7employees, and penalties for noncompliance.
AB1128,5,118 (b) All employers shall post, in one or more conspicuous places where notices
9to employees are customarily posted, the notice designed by the department under
10par. (a). Any employer who violates this paragraph shall forfeit not more than $100
11for each offense.
AB1128,5,1512 (c) The department shall establish and maintain on the department's Internet
13site information regarding worker classification laws, requirements for employers
14and employees, penalties for noncompliance, and contact information at each state
15agency that administers worker classification laws.
AB1128,10 16Section 10 . 108.221 (1) (a) of the statutes is renumbered 108.221 (1) (a) (intro.)
17and amended to read:
AB1128,5,2318 108.221 (1) (a) (intro.) Any employer described in s. 108.18 (2) (c) or engaged
19in the painting or drywall finishing of buildings or other structures
who knowingly
20and intentionally provides false information to the department for the purpose of
21misclassifying or attempting to misclassify an individual who is an employee of the
22employer as a nonemployee shall, for each incident, be assessed a penalty by the
23department as follows:
AB1128,6,3
11. For each act occurring before the date of the first determination of a violation
2of this subsection, the employer shall be assessed a penalty
in the amount of $500
3for each employee who is misclassified, but not to exceed $7,500 per incident.
AB1128,11 4Section 11 . 108.221 (1) (a) 2. of the statutes is created to read:
AB1128,6,75 108.221 (1) (a) 2. For each act occurring after the date of the first determination
6of a violation of this subsection, the employer shall be assessed a penalty in the
7amount of $1,000 for each employee who is misclassified.
AB1128,12 8Section 12 . 108.221 (2) of the statutes is renumbered 108.221 (2) (intro.) and
9amended to read:
AB1128,6,1310 108.221 (2) (intro.) Any employer described in s. 108.18 (2) (c) or engaged in the
11painting or drywall finishing of buildings or other structures
who, through coercion,
12requires an individual to adopt the status of a nonemployee shall be assessed a
13penalty by the department as follows:
AB1128,6,16 14(a) For each act occurring before the date of the first determination of a
15violation of this subsection, the employer shall be assessed a penalty
in the amount
16of $1,000 for each individual so coerced, but not to exceed $10,000 per calendar year.
AB1128,13 17Section 13 . 108.221 (2) (b) of the statutes is created to read:
AB1128,6,2018 108.221 (2) (b) For each act occurring after the date of the first determination
19of a violation of this subsection, the employer shall be assessed a penalty in the
20amount of $2,000 for each individual so coerced.
AB1128,14 21Section 14 . 182.01 (7) of the statutes is created to read:
AB1128,6,2422 182.01 (7) Information to be provided with business formation filings. The
23department shall provide informational materials and resources on worker
24misclassification to each person who files with the department any of the following:
AB1128,7,1
1(a) Articles of incorporation under s. 180.0202 or 181.0202.
AB1128,7,22 (b) Articles of organization under s. 183.0202.
AB1128,7,33 (c) A statement of qualification under s. 178.0901.
AB1128,7,44 (d) A certificate of limited partnership under s. 179.11.
AB1128,15 5Section 15 . 601.41 (12) of the statutes is created to read:
AB1128,7,106 601.41 (12) Employee misclassification outreach and education. The
7commissioner shall, on at least an annual basis, conduct outreach and education to
8persons subject to regulation under chs. 600 to 655 on how to identify the
9misclassification of employees as independent contractors and how to report
10suspected misclassifications to the appropriate federal and state agencies.
AB1128,7,1111 (End)
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