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Mason Contractors: Misclassify Employees in Texas, Get Penalized

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Mason Contractors: Misclassify Employees in Texas, Get Penalized

Construction subcontractors are celebrating new laws in Texas that will allow them to enforce government contracts, penalize competitors that get an unfair advantage by misclassifying employees as independent contractors, prohibit bid shopping by government entities, and create a pathway to careers in the construction industry.

“The legislation recently signed into law will improve the business environment for construction subcontractors and make the construction process more efficient and potentially less costly,” said 2012-13 American Subcontractors Association President Walter Bazan Jr., Bazan Painting Co., St. Louis, Mo.

On June 14, Texas Gov. Rick Perry (R) signed into law three bills:

  • HB 586 waives the state’s sovereign immunity in construction contract disputes, allowing certain design and construction companies to sue state agencies for breach of contract.
  • HB 2015 amends the Labor Code, requiring that employers ensure that workers performing under government contracts are properly classified as an employee or independent contractor.
  • HB 1050 prohibits bid shopping after a government entity has made a selection and changes design-build requirements. The new law also restricts a local government entity from entering a contract in an amount greater than $50,000 “to purchase construction-related goods or services through a purchasing cooperative” under certain circumstances.

On June 10, Gov. Perry also signed into law HB 5, which creates increased opportunities for high school students to pursue vocational education. “This law takes a huge step toward addressing our state’s shortage of skilled workers by giving young people a pathway to lucrative careers in construction trades construction, including welding, logistics, automotive technology, agricultural science, and heating, ventilation, and air conditioning,” said ASA of Texas President Mackie Bounds, Brazos Masonry Inc., Waco, Texas.

All of the new laws will take effect on Sept. 1, 2013, except HB 2015, the worker classification act, which will take effect on Jan. 1, 2014.

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