Statutory Employer Bill Reemerges from Committee

We have now seen one of the few open battles between business and labor interests over a workers’ compensation bill this session. Yesterday we wrote that HB 1668 by Rep. Paul Workman (R-Austin) was effectively dead “barring an extraordinary development.” It seems that Rep. Workman is not giving up on the bill, which is opposed by labor and trial lawyer interests.

The bill was returned to the House Business & Industry Committee after the presiding officer sustained a point of order during floor debate on May 12, 2015. Last night the House B&I Committee met briefly to correct the defect in the committee minutes that drew the point of order. And shortly thereafter, the committee reported the bill favorably without amendments.

In order to become law, the bill must still clear the House, be assigned to and reported favorably from a friendly Senate committee, and pass a floor vote in the Senate – all in an extraordinarily short period of time. There are two and one half weeks left in the session, which ends June 1, 2015.

HB 1668 provides that a subcontractor who is operating as an independent contractor and who has, pursuant to a written agreement with the general contractor, assumed the responsibilities of an employer for the performance of the work, may nevertheless enter into a written agreement whereby the general contractor provides workers’ compensation coverage to the subcontractor and the employees of the subcontractor.

HB 1668 was apparently filed in response to the trial court’s judgment in TIC Energy & Chem., Inc. v. Martin, No. 13-14-00278-CV, 2015 WL 127777 (Tex. App. Jan. 8, 2015). In that case the 13th Court of Appeals held that the Act did not bar the suit of an injured worker who had been employed by a general contractor against a subcontractor. The court held that two provisions of the Act – § 406.123 and § 406.122 – are in “irreconcilable conflict.” The court wrote that § 406.123(e) unambiguously states that the general contractor is deemed the “employer” of the subcontractor for purposes of the Act, but that § 406.122(b) unambiguously states that the subcontractor is not deemed an “employee” of the general contractor for workers’ compensation purposes.