Full Text of HB1289 99th General Assembly
HB1289ham001 99TH GENERAL ASSEMBLY | Rep. Robert Martwick Filed: 4/5/2016
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| 1 | | AMENDMENT TO HOUSE BILL 1289
| 2 | | AMENDMENT NO. ______. Amend House Bill 1289 by replacing | 3 | | everything after the enacting clause with the following:
| 4 | | "Section 1. Short title. This Act may be cited as the | 5 | | Independent Contractor Prompt Payment Act. | 6 | | Section 5. Definitions. In this Act: | 7 | | "Department" means the Department of Labor. | 8 | | "Director" means the Director of Labor. | 9 | | "Client" includes a corporation, limited liability | 10 | | company, partnership, association, or non-profit organization | 11 | | contracting with an independent contractor in any occupation, | 12 | | industry, trade, business, or service for compensation equal to | 13 | | or greater than $600. The term "client" does not include a | 14 | | governmental entity including, but not limited to, any agency, | 15 | | board, department, or commission of the State or any political | 16 | | subdivision thereof and does not include a person. The term |
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| 1 | | "client" does not include the owners of one-family dwellings | 2 | | and 2-family dwellings. | 3 | | "Compensation" means the earnings of an independent | 4 | | contractor. The term "compensation" also includes | 5 | | reimbursement for expenses. | 6 | | "Construction contractor" means any person, sole | 7 | | proprietor, partnership, firm, corporation, limited liability | 8 | | company, association, or other legal entity who by oneself or | 9 | | through others offers to undertake, holds oneself out as being | 10 | | able to undertake, or does undertake a construction project. | 11 | | "Construction project" means the providing of any labor or | 12 | | services, and the use of any materials or equipment in order to | 13 | | alter, build, excavate, add to, subtract from, improve, repair, | 14 | | maintain, renovate, move, wreck, or demolish any bridge, | 15 | | building, highway, road, railroad, land, tunnel, sewer, | 16 | | drainage or other structure, project, development, or | 17 | | improvement, or the doing of any part thereof, including the | 18 | | erection of scaffolding or other structures or works in | 19 | | connection therewith. | 20 | | "Independent contractor" means a sole proprietor who is not | 21 | | an employee and who is hired or retained by a client for an | 22 | | amount equal to or greater than $600; but does not include a | 23 | | construction contractor.
| 24 | | Section 10. Payment of independent contractors. An | 25 | | independent contractor shall be paid the compensation earned in |
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| 1 | | accordance with the agreed work terms. If an independent | 2 | | contractor and client did not agree on a date for payment of | 3 | | compensation earned, the independent contractor shall be paid | 4 | | the compensation earned not later than the last day of the | 5 | | month following the month in which the compensation is earned. | 6 | | The agreed work terms shall be reduced in writing, signed by | 7 | | both the client and the independent contractor, kept on file by | 8 | | the client for a period of not less than 6 years and made | 9 | | available to the Department upon request. The writing shall | 10 | | include a description of how compensation earned and payable | 11 | | shall be calculated. The failure of a client to produce such | 12 | | written work terms, upon request of the Department, shall give | 13 | | rise to a presumption that the terms that the independent | 14 | | contractor has presented are the agreed terms. | 15 | | Section 15. Investigation and adjustment of controversies. | 16 | | (a) The Department shall investigate and attempt to adjust | 17 | | equitably controversies between clients and independent | 18 | | contractors relating to this Act. | 19 | | (b) The Department may take assignments of claims for | 20 | | compensation from independent contractors or third parties in | 21 | | trust for such independent contractors or for the various funds | 22 | | for such independent contractors. Those assignments shall run | 23 | | to the Department. The Department may sue clients on | 24 | | compensation claims assigned to it. The Department may join in | 25 | | a single action any number of compensation claims against the |
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| 1 | | same company. | 2 | | (c) An independent contractor may file with the Department | 3 | | a complaint regarding a violation of this Act for an | 4 | | investigation of such complaint and statement setting the | 5 | | appropriate remedy, if any. Failure of a client to keep | 6 | | adequate records shall not operate as a bar to the filing of a | 7 | | complaint by an independent contractor. In such a case the | 8 | | client in violation has the burden of proving that the | 9 | | complaining independent contractor was paid compensation. | 10 | | (d) On behalf of any independent contractor paid less than | 11 | | the compensation to which he or she is entitled under the | 12 | | agreed work terms under the provisions of this Act, the | 13 | | Department may bring any legal action necessary, including | 14 | | administrative action, to collect such claim and as part of | 15 | | such legal action, in addition to any other remedies and | 16 | | penalties otherwise available under this Act, the Department | 17 | | shall assess against the client an additional amount as | 18 | | liquidated damages, unless the client proves a good faith basis | 19 | | for believing that its underpayment of compensation was in | 20 | | compliance with the law. Liquidated damages shall be calculated | 21 | | by the Department as no more than 100% of the total amount of | 22 | | compensation found to be due. In any action instituted in the | 23 | | courts upon a compensation claim by an independent contractor | 24 | | or the Department in which the independent contractor prevails, | 25 | | the court shall allow such independent contractor all | 26 | | reasonable attorney's fees, prejudgment interest as required |
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| 1 | | under the civil practice law and rules, and, unless the client | 2 | | proves a good faith basis to believe that its underpayment of | 3 | | compensation was in compliance with the law, an additional | 4 | | amount as liquidated damages equal to 100% of the total amount | 5 | | of compensation found to be due. The remedies provided by this | 6 | | article may be enforced simultaneously or consecutively so far | 7 | | as not inconsistent with each other. | 8 | | (e) Notwithstanding any other provision of law, an action | 9 | | to recover upon a liability imposed by this Act must be | 10 | | commenced within 6 years after the completion of the work. An | 11 | | independent contractor has the right to recover full | 12 | | compensation accrued during the 6 years previous to the | 13 | | commencing of the action, whether the action is instituted by | 14 | | the independent contractor or by the Department. | 15 | | (f) An independent contractor who files a complaint | 16 | | regarding a violation of this Act shall be provided with a | 17 | | written description of the anticipated processing of the | 18 | | complaint, including investigation, case conference, potential | 19 | | civil and criminal penalties, and collection procedures. | 20 | | (g) An independent contractor and his or her representative | 21 | | shall be notified in writing of any case conference before it | 22 | | is held and given the opportunity to attend. An independent | 23 | | contractor and his or her representative shall be notified in | 24 | | writing of any award and collection of back compensation and | 25 | | civil penalties, and of any intent to seek criminal penalties. | 26 | | If criminal penalties are sought, the independent contractor |
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| 1 | | and his or her representative shall be notified of the outcome | 2 | | of prosecution.
| 3 | | Section 20. Determination of violation; order directing | 4 | | compliance. | 5 | | (a) If the Department determines that a client has violated | 6 | | a provision of this Act, or a rule adopted under this Act, by | 7 | | failing to pay the compensation of its independent contractors, | 8 | | the Department shall issue to the client an order directing | 9 | | compliance, which shall describe particularly the nature of the | 10 | | alleged violation, and order the payment of interest at the | 11 | | rate of interest then in effect as prescribed under the | 12 | | Interest Act from the date of the underpayment to the date of | 13 | | the payment. In addition to directing payment of compensation | 14 | | found to be due, an order issued to a client who previously has | 15 | | been found in violation of this Act or rules or to a client | 16 | | whose violation is willful or egregious shall direct payment to | 17 | | the Department of an additional sum as a civil penalty in an | 18 | | amount equal to double the total amount found to be due. | 19 | | (b) A client who does not pay the compensation of all of | 20 | | its independent contractors in accordance with the provisions | 21 | | of this Act and the officers and agents of any client who | 22 | | knowingly permit the client to violate this Act by failing to | 23 | | pay the compensation of any of its independent contractors in | 24 | | accordance with the provisions this Act shall be guilty of a | 25 | | Class A misdemeanor for the first offense and upon conviction |
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| 1 | | therefor shall be fined not less than $500 nor more than | 2 | | $20,000 or imprisoned for not more than one year, and, if any | 3 | | second or subsequent offense occurs within 6 years after the | 4 | | date of conviction for a prior offense, shall be guilty of a | 5 | | Class 4 felony for the second or subsequent offense, and upon | 6 | | conviction therefor, shall be fined not less than $500 nor more | 7 | | than $20,000 or imprisoned for not more than one year plus one | 8 | | day or punished by both such fine and imprisonment, for each | 9 | | such offense.
| 10 | | Section 25. Representation by the Attorney General. | 11 | | (a) Penalties and fees assessed under this Act may be | 12 | | recovered in a civil action brought by the Department in the | 13 | | circuit court or in an administrative action. | 14 | | (b) The Attorney General shall represent the Department in | 15 | | administrative proceedings and civil actions brought under | 16 | | this Act. | 17 | | Section 30. Rules. The Department is authorized to adopt | 18 | | rules necessary for the administration of this Act. | 19 | | Section 35. Inapplicability. This Act does not apply to: | 20 | | (1) real estate brokers, associate brokers, or | 21 | | salespersons licensed pursuant to the Real Estate License Act | 22 | | of 2000; | 23 | | (2) work performed on one-family dwellings or 2-family |
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| 1 | | dwellings; or | 2 | | (3) construction contractors or construction projects.".
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