Louderback E-Verify Bill’s $5,000 Penalty Vanishes Once Employers Sign Up

The text as introduced · 1,867 words

By: Louderback
H.B. No. 1488

A BILL TO BE ENTITLED

AN ACT

relating to employment practices of governmental entities, state

contractors, and private employers in this state regarding the

legal status of employees, including requiring participation in the

federal electronic verification of employment authorization

program, or E-verify program, and authorizing the suspension of

certain licenses held by private employers for certain conduct in

relation to the employment of persons not lawfully present;

providing an administrative penalty.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. The heading to Chapter 2264, Government Code, is

amended to read as follows:

CHAPTER 2264. CERTAIN RESTRICTIONS ON [ USE OF CERTAIN ] PUBLIC

SUBSIDIES AND STATE CONTRACTS

SECTION 2. Section 2264.101, Government Code, is

transferred to Subchapter B, Chapter 2264, Government Code,

redesignated as Section 2264.054, Government Code, and amended to

read as follows:

Sec. 2264.054 [ 2264.101 ]. RECOVERY. (a) A public agency,

local taxing jurisdiction, or economic development corporation, or

the attorney general on behalf of the state or a state agency, may

bring a civil action to recover any amounts owed to the public

agency, state or local taxing jurisdiction, or economic development

corporation under this subchapter [ chapter ].

(b) The public agency, local taxing jurisdiction, economic

development corporation, or attorney general, as applicable, shall

recover court costs and reasonable attorney's fees incurred in an

action brought under Subsection (a).

(c) A business is not liable for a violation of this

subchapter [ chapter ] by a subsidiary, affiliate, or franchisee of

the business, or by a person with whom the business contracts.

SECTION 3. The heading to Subchapter C, Chapter 2264,

Government Code, is amended to read as follows:

SUBCHAPTER C. E-VERIFY PROGRAM [ ENFORCEMENT ]

SECTION 4. Subchapter C, Chapter 2264, Government Code, is

amended by adding Sections 2264.1011, 2264.102, and 2264.103 to

read as follows:

Sec. 2264.1011. DEFINITIONS. In this subchapter:

(1) "E-verify program" has the meaning assigned by

Section 673.001.

(2) "State agency" has the meaning assigned by Section

2103.001.

Sec. 2264.102. VERIFICATION BY CONTRACTORS. (a) A state

agency may not award a contract for goods or services within this

state to a contractor unless the contractor and any subcontractor

register with and participate in the E-verify program to verify

employee information. The contractor and any subcontractor must

continue to participate in the program during the term of the

contract.

(b) Each contract with a state agency must include the

following statement:

"_______(name of contractor) certifies that _______(name of

contractor) is not ineligible to receive this contract under

Subchapter C, Chapter 2264, Government Code, and acknowledges that

if this certification is inaccurate or becomes inaccurate during

the term of the contract, the contractor may be barred from

participating in state contracts."

(c) If a state agency determines that a contractor was

ineligible to have the contract awarded under Subsection (a), that

a contractor has ceased participation in the E-verify program

during the term of the contract, or that a subcontractor is not

registered with or is not participating in the E-verify program,

the state agency shall refer the matter to the comptroller for

action.

(d) Each state agency shall develop procedures for the

administration of this section.

Sec. 2264.103. BARRING FROM STATE CONTRACTS. (a) Using

procedures prescribed under Section 2155.077, the comptroller may

bar a contractor from participating in state contracts if the

comptroller determines that the contractor:

(1) was awarded a contract in violation of Section

2264.102;

(2) has ceased participation in the E-verify program

during the term of the contract; or

(3) hired a subcontractor to perform work under the

contract who is not registered with or is not participating in the

E-verify program.

(b) Debarment under this section is for a period of one year

except that the debarment may be extended by the comptroller for

additional one-year periods if the commission determines that the

grounds for debarment under this section continue to exist.

SECTION 5. Subtitle B, Title 2, Labor Code, is amended by

adding Chapter 53 to read as follows:

CHAPTER 53. VERIFICATION OF EMPLOYEE INFORMATION

Sec. 53.001. DEFINITIONS. In this chapter:

(1) "Commission" means the Texas Workforce

Commission.

(2) "Employee" means an individual who is employed by

an employer for compensation. The term includes an individual

employed on a part-time basis.

(3) "Employer" means a person, other than a

governmental entity, who:

(A) employs one or more employees; or

(B) acts directly or indirectly in the interests

of an employer in relation to an employee.

(4) "Employment" means any service, including service

in interstate commerce, that is performed for wages or under a

contract of hire, whether written or oral or express or implied.

The term does not include any service performed by an individual for

wages if it is shown that the individual is free from control or

direction in the performance of the service, both under any

contract of service and in fact.

(5) "E-verify program" has the meaning assigned by

Section 673.001, Government Code.

Sec. 53.002. EMPLOYEE STATUS. An employer may not classify

an individual performing services for the employer as an

independent contractor instead of as an employee of the employer

solely for the purpose of avoiding the requirements applicable to

an employer under this chapter.

Sec. 53.003. VERIFICATION. An employer shall register and

participate in the E-verify program to verify information of all

new employees.

Sec. 53.004. ENFORCEMENT BY STATE AGENCIES; RULES. (a)

Notwithstanding any other law, each appropriate state agency shall

ensure that employers in this state comply with Section 53.003 and

may require compliance with that section as a condition of a

license, certificate, registration, permit, or other authorization

issued by the agency that is required for a person to practice or

engage in a particular business, occupation, or profession in this

state.

(b) Each appropriate state agency shall adopt rules and

prescribe forms as necessary to implement this section.

SECTION 6. Sec. 301.009(a), Government Code, is amended to

read as follows:

Sec. 301.009. COMMISSION DIVISIONS. (a) The Commission

shall have:

(1) a division of workforce development;

(2) a division of unemployment compensation; [ and ]

(3) a civil rights division[ . ] ; and

(4) a legal hiring compliance division.

SECTION 7. Chapter 301, Labor Code, is amended by adding

Subchapter L. to read as follows:

SUBCHAPTER L. LEGAL HIRING COMPLIANCE DIVISION

Sec. 301.201. LEGAL HIRING COMPLIANCE DIVISION. The

commission shall establish and operate a legal hiring compliance

division to ensure private employer compliance with E-verify

requirements under Chapter 53, Labor Code.

Sec. 301.202. POWERS AND DUTIES OF COMMISSION. (a) The

commission has the power to conduct investigations of employers

suspected of violating hiring laws and regulations regarding

unauthorized workers and noncompliance with E-verify requirements.

(b) The commission may receive complaints or reports from

any individual, organization, or government agency regarding

suspected violations of legal hiring practices. The commission

shall review all complaints and shall initiate investigations to

determine compliance with E-verify requirements under Chapter 53,

Labor Code.

(c) A complaint filed with the commission must include the

following information:

(1) the name of the complainant;

(2) the name of the employer; and

(3) the nature and description of any alleged

violation.

Sec. 301.203. CONFIDENTIALITY. (a) Information obtained

in connection with an investigation under this subchapter is

confidential and not subject to public disclosure, except as

otherwise provided by law.

(b) The commission may disclose information:

(1) to other state agencies for the purposes of

reporting continued noncompliance with Chapter 53, Labor Code; and

(2) to the comptroller for the purposes of determining

continued eligibility for state contracts under Chapter 2264,

Subchapter C, Government Code.

Sec. 301.204. ADMINISTRATIVE PENALTY. (a) The commission

shall impose on an employer who violates this chapter an

administrative penalty in an amount equal to $5,000 for each

violation, unless the employer takes corrective action to achieve

compliance.

(b) If, following an investigation under Section

301.202(b), the commission determines that the employer violated

this chapter, the commission may recover from the employer

reasonable investigative costs incurred by the commission in

conducting the investigation, regardless of whether the employer

has taken an action described by Subsection (a).

Sec. 301.205. NOTICE TO LICENSING AGENCIES. If the

commission determines that an employer has refused to take

corrective action as required by this subchapter, the commission

shall send notice of continued noncompliance to each state agency

that issues a license to the employer for action under Sec. 53.004,

Labor Code.

Sec. 301.206. MODEL POLICIES AND COMPLIANCE GUIDANCE. (a)

The commission shall develop model policies and standardized forms

to support private employers in fulfilling legal hiring

obligations. Model policies adopted under this section must

include procedures and compliance checklists to ensure adherence to

E-Verify regulations and prevent unauthorized hiring practices.

(b) The commission shall provide publicly available

information regarding:

(1) how to report suspected violations of mandatory

E-verify regulations; and

(2) the commission's jurisdiction and authority

regarding investigations of E-verify noncompliance.

Sec. 301.207. RULES. The commission shall adopt rules as

necessary to implement and enforce this subchapter.

SECTION 8. Subtitle C, Title 5, Local Government Code, is

amended by adding Chapter 181 to read as follows:

CHAPTER 181. VERIFICATION OF EMPLOYEE INFORMATION

Sec. 181.001. DEFINITIONS. In this chapter:

(1) "E-Verify program" has the meaning assigned by

Section 673.001, Government Code.

(2) "Political subdivision" means a county,

municipality, school district, junior college district, other

special district, or other subdivision of state government.

Sec. 181.002. VERIFICATION. A political subdivision shall

register and participate in the E-Verify program to verify

information of all new employees.

Sec. 181.003. TERMINATION OF EMPLOYMENT. An employee of a

political subdivision who is responsible for verifying information

of new employees of the political subdivision as required by

Section 181.002 is subject to immediate termination of employment

if the employee fails to comply with that section.

SECTION 9. SEVERABILITY. If any provision of this Act or

its application to any person or circumstance is held invalid, the

invalidity does not affect other provisions or applications of this

Act that can be given effect without the invalid provision or

application, and to this end, the provisions of this Act are

declared to be severable.

SECTION 10. As soon as practicable after the effective date

of this Act, the commission shall develop model policies required

by Sec. 301.206, Government Code.

SECTION 11. Sections 2264.1011, 2264.102, and 2264.103,

Government Code, as added by this Act, apply only in relation to a

contract for which the request for bids or proposals or other

applicable expression of interest is made public on or after the

effective date of this Act.

SECTION 12. This Act applies to employment decisions or

contracts made on or after the effective date of this Act. A

contract of employment signed before the effective date of this Act

are governed by the law that was in effect immediately before the

effective date of this Act, and the former law is continued in

effect for that purpose.

SECTION 13. This Act takes effect immediately if it

receives a vote of two-thirds of all the members elected to each

house, as provided by Section 39, Article III, Texas Constitution.

If this Act does not receive the vote necessary for immediate

effect, this Act takes effect September 1, 2025.