Mason Contractors: Misclassify Employees in Texas, Get Penalized

Construction subcontractors are celebrating new laws in Texas that will allow them to enforce government contracts, penalize competitors that get an unfair advantage by misclassifying employees as independent contractors, prohibit bid shopping by government entities, and create a pathway to careers in the construction industry.

• HB 586 waives the state’s sovereign immunity in construction contract disputes, allowing certain design and construction companies to sue state agencies for breach of contract.
• HB 2015 amends the Labor Code, requiring that employers ensure that workers performing under government contracts are properly classified as an employee or independent contractor.
• HB 1050 prohibits bid shopping after a government entity has made a selection and changes design-build requirements. The new law also restricts a local government entity from entering a contract in an amount greater than $50,000 “to purchase construction-related goods or services through a purchasing cooperative” under certain circumstances.