TEXAS EMPLOYER COMPLIANCE ALERT – 6/30/18

TEXAS EMPLOYER COMPLIANCE ALERT – 6/30/18

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The Texas Legislature passed an amendment to the definition of an “employee” to include an independent contractor for purposes of the state’s case registry and disbursement unit for child support and medical support enforcement.1

The Office of the Attorney General requires an employer to report any “new hire” to the State Directory of New Hires within 20 days of the employee’s first day on the job. The definition of “employee” now includes an independent contractor as defined by the IRS and whose income is required to be reported on Form 1099-MISC.2

The IRS requires a Form 1099-MISC to be filed for each person who is paid during the year:

  1. At least $10 in royalties or broker payments in lieu of dividends or tax-exempt

interest;

  1. At least $600 in:
  2. Rents;
  3. Services performed by someone who is not your employee;
  4. Prizes and awards;
  5. Other income payments;
  6. Medical and health care payments;
  7. Crop insurance proceeds;
  8. Cash payments for fish (or other aquatic life) purchased from anyone engaged in

the trade or business of catching fish;

  1. Generally, the cash paid from a notional principal contract to an individual,

partnership. or estate;

                                            

 

1TX FAM. CODE ANN. (Vernon Supp. 2017) § 234.101(1) (as amended by SB 1727 R.S. 2015).

21 TAC § 55.302(4).

 

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  1. Payments to an attorney; or,
  2. Any fishing boat proceeds.

 

  1. In addition, any direct sales of at least $5,000 of consumer products to a buyer for resale anywhere other than a permanent retail establishment.

 

The state’s form regarding new hires is available at www.texasattorneygeneral.gov/cs and click on “Employers” and “Forms.” The New Hire Form is also attached to the email which transmitted this memo.

 

Additional information is available at this link:

https://portal.cs.oag.state.tx.us/wps/myportal/NewHiresFAp#guestion

 

PENALTY

An employer who knowingly violates the employee reporting requirement may be liable to the AG for a civil penalty, which may not exceed:

 

  1. $25 for each occurrence that an employer fails to report an “employee;” or

 

  1. $500 for each occurrence in which the conduct is the result of a conspiracy

between the employer and employee not to file a required report or to submit a

false or incomplete report.3

 

                                   

 

3 TAC § 55.307.