Deshotel's bill could curtail undocumented workers in construction jobs

By Heather Nolan

Published 07:00 p.m., Wednesday, May 4, 2011

Rep. Joe Deshotel, whose district includes parts of Jefferson and Orange counties, authored HB 2989, which would penalize construction industry employers who misclassify workers - many of which are undocumented and paid in cash.

Deshotel, who is chair of the House Business and Industry committee, said employers who list workers as independent contractors rather than employees don't pay employee taxes on that worker. Many times, he said, the employer doesn't even put the worker on the books.

That puts employers who do play by the rules at an unfair advantage, he said.

A 2010 study by Build a Better Texas cited a Texas Workforce Commission audit which found the construction industry misclassifies more workers than any other industry in Texas. The group estimated Texas is losing at least $35 million in unemployment taxes each year.

Deshotel's bill, which must be voted on in the House before May 12 or will die this session, would require employers who don't properly classify employees to pay a fine of $500 per individual for the first violation.

Employers would pay $5,000 per individual for each subsequent violation, according to the bill's text.

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