Sec. 214.008. MISCLASSIFICATION OF CERTAIN WORKERS; PENALTY. (a) A person who contracts with a governmental entity to provide a service as defined by Section 2155.001 , Government Code, shall properly classify, as an employee or independent contractor in accordance with Chapter 201 , any individual the person directly retains and compensates for services performed in connection with the contract. (b) In this subsection, "subcontractor" means a person directly retained and compensated by a person who contracts with a governmental entity to provide a service as defined by Section 2155.001 , Government Code. A subcontractor shall properly classify, as an employee or independent contractor in accordance with Chapter 201 , any individual the subcontractor directly retains and compensates for services performed in connection with the contract for which the subcontractor is retained. (c) A person who fails to properly classify an individual as required by Subsection (a) or (b) shall pay to the commission a penalty equal to $200 for each individual that the person has not properly classified. (d) The commission may not take action to collect a penalty under this section from a person after the third anniversary of the date on which the violation occurred.
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