H.A.-CBW, C.H. HB. 762 77(R)    BILL ANALYSIS


Office of House Bill AnalysisHB. 762
By: Coleman
Economic Development
2/23/2001
Introduced



BACKGROUND AND PURPOSE 

Under current law, a state contractor or an employer who obtains financial
assistance by loan, grant, tax abatement, or other subsidy from the state
or from a state agency is not required to pay employees a  living wage.
The concept of a living wage is that if a person works a forty hour week
then he or she should be able to access basic housing and still have enough
left to pay for utilities, food, and clothing. A living wage incorporates
two federal guidelines.  The first guideline uses the U.S. Department of
Housing and Urban Development (HUD) standard that no more than
approximately one-third of a person's gross monthly income should be spent
on housing.  The second guideline uses the fair market rent index
determined by HUD to establish  the affordability of housing in a market
area.  Statistics from the United States Department of Labor show that the
federal minimum hourly wage has increased from $3.10 an hour to $5.15 an
hour in the past 20 years while inflation, as measured by the Consumer
Price Index, has increased approximately twice as fast.  In addition, the
minimum wage in Texas,  which is  $3.35 an hour,  is less than the federal
minimum wage of $5.15 an hour.  House Bill 762 requires all contractors and
employers who contract with or receive financial assistance from the state
or a state agency to pay each employee a living wage commensurate with the
local economy. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly delegated to the Texas Workforce Commission in
SECTION 1 (Sections 65.004, 65.005, and 65.007, Labor Code) of this bill. 

ANALYSIS

House Bill 762 amends the Labor Code to require an employer who contracts
with or receives financial assistance from the state or a state agency and
a subcontractor who works on a service contract to pay each employee not
less than the living wage for the market area.  The bill specifies the
process for computing a living wage, and requires an employer to post at
each place of the employer's business a conspicuous notice, as prescribed
by Texas Workforce Commission (TWC) rule,  that includes the living wage
rate, the telephone number of TWC, and procedures for filing a claim. 

An employer is required to keep complete and accurate payroll records for
each employee and to report this information periodically to TWC as
prescribed by TWC rule.  The bill prohibits an employer from retaliating or
discriminating against an employee who makes or files a complaint, or
testifies, assists, or participates in an investigation, proceeding, or
hearing. 

TWC is required to adopt rules for monitoring employer compliance, and is
authorized to require reports, conduct investigations, and to take other
appropriate action.  TWC is also required to file an annual report with the
legislature regarding the operation of the living wage requirement. 

If an employer violates a provision of this bill, an employee or former
employee is authorized to file a claim with TWC no later than the first
anniversary of the violation or the date the employee has reason to know of
the violation.  TWC is required to investigate a claim, make a preliminary
determination, recommend  a penalty, and mail a notice of the preliminary
determination to the employer and the complainant.  Both parties are
authorized to request a hearing to contest the preliminary determination.
As an additional remedy, TWC is authorized to assess an administrative
penalty, withhold payment due the employer in the amount sufficient to pay
the employee, terminate, cancel, or suspend the service contract or
financial assistance agreement, disqualify the employer from contracting
with or receiving financial assistance from the state or state agency, or
from working on a service contract for up to three years. 

A party is authorized to seek judicial review of TWC's order.  An employee
or former employee may be awarded reinstatement, back pay, damages,
attorney's fees, court costs, and other appropriate equitable relief.  A
requirement to pay a living wage supersedes a requirement to pay a
prevailing wage to a worker employed on a public work by or on behalf of
the state or political subdivision of the state. 

EFFECTIVE DATE

September 1, 2001.