2014 -- S 3035 SUBSTITUTE A

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2014

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A N   A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT - UNDERGROUND ECONOMY

AND EMPLOYEE MISCLASSIFICATION ACT

     

     Introduced By: Senators McCaffrey, Goodwin, DaPonte, Ruggerio, and Miller

     Date Introduced: May 28, 2014

     Referred To: Senate Finance

     It is enacted by the General Assembly as follows:

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     SECTION 1. Title 42 of the General Laws entitled "STATE AFFAIRS AND

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GOVERNMENT" is hereby amended by adding thereto the following chapter:

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CHAPTER 155

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UNDERGROUND ECONOMY AND EMPLOYEE MISCLASSIFICATION ACT

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     42-155-1. Short Title. -- This chapter shall be known as the "Underground Economy and

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Employee Misclassification Act".

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     42-155-2. Declaration of purpose. -- (a) The general assembly finds and declares that

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this state's economy, its workers and its businesses are harmed by the existence of an illegal

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underground economy in which individuals and businesses conceal their activities from

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government licensing, regulatory and taxing authorities. The underground economy, and in

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particular, the practice of employee misclassification:

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     (1) Exploits vulnerable workers and deprives them of legal benefits and protections;

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     (2) Gives unlawful businesses an unfair competitive advantage over lawful businesses by

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illegally driving down violators' taxes, wages, and other overhead costs;

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     (3) Defrauds the government of substantial tax revenues; and

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     (4) Harms consumers who suffer at the hands of unlicensed businesses that fail to

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maintain minimum levels of skills and knowledge.

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     (b) The creation of a task force has proven to be an effective mechanism for enhancing

 

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interagency cooperation, information sharing, and the prosecution of violators.

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     42-155-3. Task Force. -- (a) There is hereby established a task force on the underground

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economy and employee misclassification. The task force shall consist of the following members

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or their designees:

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     (1) The director of labor and training, or designee;

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     (2) The tax administrator, or designee;

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     (3) The director of business regulations, or designee;

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     (4) The head of the workforce regulation and safety division, or designee;

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     (5) The attorney general, or designee;

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     (6) The commissioner of the department of public safety, or designee; and

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     (7) The chief judge of the workers' compensation court, or designee.

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     (b) The director of labor and training shall chair the task force.

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     42-155-4. Duties and Responsibilities. -- The task force shall:

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     (1) Coordinate joint efforts to combat the underground economy and employee

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misclassification;

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     (2) Foster voluntary compliance with the law by educating business owners and

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employees about applicable requirements;

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     (3) Conduct joint, targeted investigations and enforcement actions against violators;

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     (4) Protect the health, safety and benefit rights of workers; and

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     (5) Restore competitive equality for law-abiding businesses.

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     42-155-5. Sharing of Information. -- Notwithstanding any other law or regulation to the

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contrary, the task force shall facilitate timely information sharing between and among task force

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members, including the establishment of protocols by which participating agencies will advise or

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refer to other agencies matters of potential investigative interest.

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     44-155-6. Annual Report.-- No later than March 15, 2015, and every March 15

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thereafter, the task force shall submit a report to the governor and the chairpersons of the house

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finance committee and senate finance committee summarizing the task force's activities during

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the preceding year. The report shall, without limitation:

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     (1) Describe the task force's efforts and accomplishments during the year;

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     (2) Identify any administrative or legal barriers impeding the more effective operation of

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the task force, including any barriers to information sharing or joint action; and propose

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appropriate administrative, legislative, or regulatory changes to strengthen the task force's

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operations and enforcement efforts and reduce or eliminate any barriers to those efforts.

 

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     SECTION 2. The act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT - UNDERGROUND ECONOMY

AND EMPLOYEE MISCLASSIFICATION ACT

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     This act would establish a task force to investigate and seek out underground economy

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and employee misclassification. The task force would foster voluntary compliance with the law

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by educating business owners and employees about applicable requirements concerning

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classification of employees.

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     The act would take effect upon passage.

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