2013 -- S 0368 SUBSTITUTE A AS AMENDED

=======

LC01198/SUB A/3

=======

STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2013

____________

A N A C T

RELATING TO LABOR AND LABOR RELATIONS -- EMPLOYMENT SECURITY--

GENERAL PROVISIONS

     Introduced By: Senators McCaffrey, Goodwin, Lombardi, Miller, and Gallo

     Date Introduced: February 13, 2013

     Referred To: Senate Labor

It is enacted by the General Assembly as follows:

1-1

     SECTION 1. Section 28-14-19 of the General Laws in Chapter 28-14 entitled "Payment

1-2

of Wages" is hereby amended to read as follows:

1-3

     28-14-19. Enforcement powers and duties of director of labor and training. -- (a) It

1-4

shall be the duty of the director to insure compliance with the provisions of this chapter 28-14 and

1-5

28-12. The director or his or her designee may investigate any violations thereof, institute or

1-6

cause to be instituted actions for the collection of wages and institute action for penalties or other

1-7

relief as provided for within and pursuant to those chapters. The director or his or her authorized

1-8

representatives are empowered to hold hearings and he or she shall cooperate with any employee

1-9

in the enforcement of a claim against his or her employer in any case whenever, in his or her

1-10

opinion, the claim is just and valid.

1-11

      (b) Upon receipt of a complaint or conducting an inspection under applicable law, the

1-12

director or his or her appropriate departmental designee is authorized to investigate to determine

1-13

compliance with the chapters 28-12 and/or 28-14.

1-14

      (c) With respect to all complaints deemed just and valid, the director or his or her

1-15

designee shall order a hearing thereon at a time and place to be specified, and shall give notice

1-16

thereof, together with a copy of the complaint or the purpose thereof, or a statement of the facts

1-17

disclosed upon investigation, which notice shall be served personally or by mail on any person,

1-18

business, corporation, or entity of any kind affected thereby. The hearing shall be scheduled

1-19

within thirty (30) days of service of a formal complaint as provided herein. The person, business,

2-1

corporation, or entity shall have an opportunity to be heard in respect to the matters complained

2-2

of at the time and place specified in the notice. The hearing shall be conducted by the director or

2-3

his or her designee. The hearing officer in the hearing shall be deemed to be acting in a judicial

2-4

capacity, and shall have the right to issue subpoenas, administer oaths, and examine witnesses.

2-5

The enforcement of a subpoena issued under this section shall be regulated by Rhode Island civil

2-6

practice law and rules. The hearing shall be expeditiously conducted and upon such hearing the

2-7

hearing officer shall determine the issues raised thereon and shall make a determination and enter

2-8

an order within thirty (30) days of the close of the hearing, and forthwith serve a copy of the

2-9

order, with a notice of the filing thereof, upon the parties to the proceeding, personally or by mail.

2-10

In the event that any party or entity joined as a party to a formal claim, complaint or other

2-11

proceeding asserts, as a related claim or defense, the absence of an employer-employee

2-12

relationship or that the agent or operative employed by the contractor is an independent

2-13

contractor, the director of the department of labor and training or his or her designee shall refer

2-14

the matter forthwith to the Rhode Island workers' compensation court for an evidentiary hearing

2-15

and determination of employment status in accordance with subsection 28-30-13(c). The order

2-16

shall dismiss the complaint or direct payment of any wages and/or benefits found to be due and/or

2-17

award such other appropriate relief or penalties authorized under chapter 28-12 and/or 28-14, and

2-18

the order may direct payment of reasonable attorneys' fees and costs to the complaining party.

2-19

Interest at the rate of twelve percent (12%) per annum shall be awarded in the order from the date

2-20

of the nonpayment to the date of payment.

2-21

      (d) The order shall also require payment of a further sum as a civil penalty in an amount

2-22

up to two (2) times the total wages and/or benefits found to be due, exclusive of interest, which

2-23

shall be shared equally between the department and the aggrieved party. In determining the

2-24

amount of any penalty to impose, the director or his or her designee shall consider the size of the

2-25

employer's business, the good faith of the employer, the gravity of the violation, the previous

2-26

violations and whether or not the violation was an innocent mistake or willful.

2-27

      (e) The director may institute any action to recover unpaid wages or other compensation

2-28

or obtain relief as provided under this section with or without the consent of the employee or

2-29

employees affected.

2-30

      (f) No agreement between the employee and employer to work for less than the

2-31

applicable wage and/or benefit rate or to otherwise work under and/or conditions in violation of

2-32

applicable law is a defense to an action brought pursuant to this section.

2-33

      (g) The director shall notify the contractors' registration board of any order issued or any

2-34

determination hereunder that an employer has violated chapters 28-12, 28-14 and/or 37-13. The

3-1

director shall notify the tax administrator of any determination hereunder that may affect liability

3-2

for an employer's payment of wages and/or payroll taxes.

3-3

     SECTION 2. Section 28-30-13 of the General Laws in Chapter 28-30 entitled "Workers'

3-4

Compensation Court" is hereby amended to read as follows:

3-5

     28-30-13. Controversies submitted to court. -- (a) Any controversy over which the

3-6

workers' compensation court has jurisdiction in accordance with chapters 29 -- 38 and chapter 53

3-7

of this title, including compensation, reasonableness of medical and hospital bills, degree of

3-8

functional impairment and/or disability, a dispute between an insurance carrier and an employer

3-9

under a workers' compensation insurance contract, except disputes under the jurisdiction of the

3-10

workers' compensation appeals board established pursuant to section 27-9-29, failure of an

3-11

employer to secure the payment of compensation under chapters 29 -- 38 and chapter 53 of this

3-12

title and any controversy in which the state or any of its political subdivisions is a party, and

3-13

appeals from an order of the retirement board pursuant to Rhode Island general law section 45-

3-14

21.2-9 shall be submitted to the court in the manner provided in chapters 33 and 35 of this title.

3-15

      (b) Disputes between an insurance carrier and an employer under a workers'

3-16

compensation insurance contract shall not be subject to a pretrial conference in accordance with

3-17

section 28-35-20, but shall be assigned consistent with the rules and regulations of the workers'

3-18

compensation court.

3-19

     (c) Where any party or entity joined as a party to a formal claim, complaint or other

3-20

proceeding brought before the director of the department of labor and training or his or her

3-21

designee, pursuant to sections 28-14-19, 28-40-11 and 37-13-14.1, asserts the absence of an

3-22

employer-employee relationship or the existence of an independent contractor relationship as a

3-23

related claim or defense, the director or his or her designee shall refer the matter to the workers'

3-24

compensation court for an evidentiary hearing and determination of employment status. Such

3-25

disputes shall not be subject to a pretrial conference in accordance with section 28-35-20. Rather,

3-26

the court shall assign the matter for trial within twenty-one (21) days of the date on which the

3-27

matter is docketed at the court. The judge to whom the matter is assigned shall hear and decide all

3-28

questions of law and fact relating to the disputed employment status and shall render a decision in

3-29

accordance with the workers' compensation laws regarding the determination of employment

3-30

status and shall enter an order reflecting his or her findings and decisions. Costs, counsel or

3-31

witness fees shall not be awarded by the court to the prevailing party. Any party aggrieved by the

3-32

entry of the order by a judge relating to employment status under this section may appeal said

3-33

order to the appellate division pursuant to the provisions of section 28-35-28. Upon the entry of a

3-34

final order of the court, the matter shall be remanded to the department of labor and training for

4-1

further proceedings consistent with the court's order.

4-2

     (d) The process created by subsection 28-30-13(c) shall not apply to "employment" that

4-3

are exempt from the workers' compensations statutory scheme, pursuant to section 28-42-8.

4-4

     (e) Actors, comedians, and dancers performing in an entertainment venue shall not be

4-5

deemed employees.

4-6

     SECTION 3. Section 28-40-11 of the General Laws in Chapter 28-40 entitled

4-7

"Temporary Disability Insurance - Contributions" is hereby amended to read as follows:

4-8

     28-40-11. Determination of unreported contributions due. -- If an employer for any

4-9

reporting period fails to make any report used for the purpose of determining the amount of

4-10

contributions payable under chapters 39 -- 41 of this title at the time and in the manner required

4-11

by the prescribed rules and regulations, or if those reports when filed are incorrect or insufficient,

4-12

and the employer fails to file a corrected or sufficient report within twenty (20) days after the

4-13

director has required it by written notice, the director shall determine on the basis of such

4-14

information as the director may be able to obtain, the amount of contributions due from that

4-15

employer, and the director shall give written notice to any employer of the amount of

4-16

contributions so determined. That determination shall finally and irrevocably fix the amount of

4-17

contributions due unless the employer, within twenty (20) days after the giving of that notice,

4-18

applies to the board of review for a hearing, or unless the director on his or her own volition

4-19

reduces the amount. In the event that any party or entity joined as a party to a formal claim,

4-20

complaint or other proceeding asserts, as a related claim or defense, the absence of an employer-

4-21

employee relationship or that the agent or operative for whom a contribution has been assessed is

4-22

an independent contractor, the director of the department of labor and training or his or her

4-23

designee shall refer the matter forthwith to the Rhode Island workers' compensation court for an

4-24

evidentiary hearing and determination of employment status in accordance with subsection 28-

4-25

30-13(c).

4-26

     SECTION 4. Section 28-42-7 of the General Laws in Chapter 28-42 entitled

4-27

"Employment Security - General Provisions" is hereby amended to read as follows:

4-28

     28-42-7. Independent contractor and employee distinguished. -- The determination of

4-29

independent contractor or employee status for purposes of chapters 42 -- 44 of this title shall be

4-30

made by the Rhode Island workers' compensation court in accordance with subsection 28-30-

4-31

13(c) the same as those factors used by the Internal Revenue Service in its code and regulations.

4-32

     SECTION 5. Section 37-13-14.1 of the General Laws in Chapter 37-13 entitled "Labor

4-33

and Payment of Debts by Contractors" is hereby amended to read as follows:

5-34

     37-13-14.1. Enforcement -- Hearings. -- (a) Before issuing an order or determination,

5-35

the director of labor and training shall order a hearing thereon at a time and place to be specified,

5-36

and shall give notice thereof, together with a copy of the complaint or the purpose thereof, or a

5-37

statement of the facts disclosed upon investigation, which notice shall be served personally or by

5-38

mail on any person, firm, or corporation affected thereby. The person, firm, or corporation shall

5-39

have an opportunity to be heard in respect to the matters complained of at the time and place

5-40

specified in the notice, which time shall be not less than five (5) days from the service of the

5-41

notice personally or by mail. The hearing shall be held within ten (10) days from the order of

5-42

hearing. The hearing shall be conducted by the director of labor and training or his or her

5-43

designee. The hearing officer in the hearing shall be deemed to be acting in a judicial capacity,

5-44

and shall have the right to issue subpoenas, administer oaths, and examine witnesses. The

5-45

enforcement of a subpoena issued under this section shall be regulated by Rhode Island civil

5-46

practice law and rules. The hearing shall be expeditiously conducted and upon such hearing the

5-47

hearing officer shall determine the issues raised thereon and shall make a determination and enter

5-48

an order within ten (10) days of the close of the hearing, and forthwith serve a copy of the order,

5-49

with a notice of the filing thereof, upon the parties to the proceeding, personally or by mail. In the

5-50

event that any party or entity joined as a party to a formal claim, complaint or other proceeding

5-51

asserts, as a related claim or defense, the absence of an employer-employee relationship or that

5-52

the agent or operative employed by the contractor is an independent contractor, the director of the

5-53

department of labor and training or his or her designee shall refer the matter forthwith to the

5-54

Rhode Island workers' compensation court for an evidentiary hearing and determination of

5-55

employment status in accordance with subsection 28-30-13(c). The order shall dismiss the

5-56

charges or direct payment of wages or supplements found to be due, including interest at the rate

5-57

of twelve percentum percent (12%) per annum from the date of the underpayment to the date of

5-58

payment, and may direct payment of reasonable attorney's fees and costs to the complaining

5-59

party.

5-60

      (b) In addition to directing payment of wages or supplements including interest found to

5-61

be due, the order shall also require payment of a further sum as a civil penalty in an amount up to

5-62

three times the total amount found to be due. Further, if the amount of salary owed to an

5-63

employee pursuant to this chapter but not paid to the employee in violation of thereof exceeds

5-64

five thousand dollars ($5,000), it shall constitute a misdemeanor and shall be referred to the office

5-65

of the attorney general. The misdemeanor shall be punishable for a period of not more than one

5-66

year in prison and/or fined not more than one thousand dollars ($1,000). In assessing the amount

5-67

of the penalty, due consideration shall be given to the size of the employer's business, the good

5-68

faith of the employer, the gravity of the violation, the history of previous violations and the

6-1

failure to comply with recordkeeping or other nonwage requirements. The surety of the person,

6-2

firm, or corporation found to be in violation of the provisions of this chapter shall be bound to

6-3

pay any penalties assessed on such person, firm, or corporation. The penalty shall be paid to the

6-4

department of labor and training for deposit in the state treasury; provided, however, it is hereby

6-5

provided that the general treasurer shall establish a dedicated "prevailing wages enforcement

6-6

fund" for the purpose of depositing the penalties paid as provided herein. There is hereby

6-7

appropriated to the annual budget of the department of labor and training the amount of the fund

6-8

collected annually under this section, to be used at the direction of the director of labor and

6-9

training for the sole purpose of enforcing prevailing wage rates as provided in this chapter.

6-10

      (c) For the purposes of this chapter, each day or part thereof of violation of any provision

6-11

of this chapter by a person, firm, or corporation, whether the violation is continuous or

6-12

intermittent, shall constitute a separate and succeeding violation.

6-13

      (d) In addition to the above, any person, firm, or corporation found in violation of any of

6-14

the provisions of this chapter by the director of labor and training, an awarding authority, or the

6-15

hearing officer, shall be ineligible to bid on or be awarded work by an awarding authority or

6-16

perform any such work for a period of no less than eighteen (18) months and no more than thirty-

6-17

six (36) months from the date of the order entered by the hearing officer. Once a person, firm, or

6-18

corporation is found to be in violation of this chapter, all pending bids with any awarding

6-19

authority shall be revoked, and any bid awarded by an awarding authority prior to the

6-20

commencement of the work shall also be revoked.

6-21

      (e) In addition to the above, any person, firm, or corporation found to have committed

6-22

two (2) or more willful violations in any period of eighteen (18) months of any of the provisions

6-23

of this chapter by the hearing officer, which violations are not arising from the same incident,

6-24

shall be ineligible to bid on or be awarded work by an awarding authority or perform any work

6-25

for a period of sixty (60) months from the date of the second violation.

6-26

      (f) The order of the hearing officer shall remain in full force and effect unless stayed by

6-27

order of the superior court.

6-28

      (g) The director of labor and training, awarding authority, or hearing officer shall notify

6-29

the bonding company of any person, firm, or corporation suspected of violating any section of

6-30

this chapter. The notice shall be mailed certified mail, and shall enumerate the alleged violations

6-31

being investigated.

6-32

      (h) In addition to the above, any person, firm, or corporation found to have willfully

6-33

made a false or fraudulent representation on certified payroll records shall be referred to the

6-34

office of the attorney general. The false or fraudulent representation shall be considered a

7-1

misdemeanor and shall be punishable for a period of not more than one year in prison and/or

7-2

fined one thousand dollars ($1,000). Further, any person, firm, or corporation found to have

7-3

willfully made a false or fraudulent representation on certified payroll records shall be required to

7-4

pay a civil penalty to the department of labor and training in an amount of no less than two

7-5

thousand dollars ($2,000) and not greater than fifteen thousand dollars ($15,000) per

7-6

representation.

7-7

     SECTION 6. This act shall take effect upon passage.

=======

LC01198/SUB A/3

========

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO LABOR AND LABOR RELATIONS -- EMPLOYMENT SECURITY--

GENERAL PROVISIONS

***

8-1

     This act would grant jurisdiction to the workers' compensation court to decide whether an

8-2

individual is an employee or an independent contractor in a number of various labor contexts.

8-3

     This act would take effect upon passage.

=======

LC01198/SUB A/3

=======