As a business owner, you need to be afraid of the Texas Workforce Commission – the TWC. Very afraid.
I say that with no disrespect as they are hard working state government employees and I come from government as an attorney – way back to the Reagan Administration. They are doing their job.
That said, failure to understand how the TWC works can result in your business shutting down which is heartbreaking.
Here are a few tips for being “TWC Prepared”:
1. Make sure you know the difference between independent contractors and employees.
This is not as easy as it sounds as many 1099 workers do not fit the definition of an independent contractor for purposes of the TWC. Do not go to the internet for advice or get it second hand. Seek the advice of a highly experienced and qualified TWC Employment Attorney so your business is TWC Prepared!
2. What happens if I make TWC mistake?
The answer is that it can get bad and fast. The TWC will launch an investigation and assign an investigator or agent to the case. They will subpoena or legally compel the production of all of your financial records and mostly everything they want going back years. You have no basis to refuse production in these cases. The TWC will get your side of the story but issue a ruling which, in my experience, is typically not good news for business, particularly small business. If they rule that the worker is not an independent contractor, they will order you to pay back insurance and other penalties. The problem is that any worker you previously hired will get caught up in the same net and your exposure will grow and grow which is horrible news. It can easily shut you down. Oh, forgot to mention that the TWC reports you to the IRS!
3. What happens if the TWC rules against me?
Get an experienced TWC Employment Attorney Fast! Your right to appeal the decision is subject to deadlines and ticking away! We handle many of these cases at the Moster Law Firm and we work with the client to make sure that the TWC has the hard evidence to show that you hired independent contractors and not employees – if that is the case. We compile the evidence and represent you on the appeal. Our goal is to get the TWC to reverse the bad decision.
4. What happens if you lose on appeal?
There are lots of legal options as the TWC is not a “real” court meaning that it is part of the executive branch of Texas government and not the judiciary. We can appeal higher in the TWC up to the TWC Commissioners themselves and then to an actual district court in an attempt to have justice done.
5. Is the TWC biased?
Now, that’s a loaded question. Here’s my opinion – “Most definitely biased in favor of employees” – at least at the early stages of the process. I am not saying that the entire organization is biased as there are excellent public servants. It’s like any place else – you know what they say about a bad apple.
6. What is an audit?
Bad news. The TWC is on a fishing expedition to find something bad and you need representation.
Bottom Line:
The TWC is not to be taken lightly. The best procedure is to consult an experienced TWC employment attorney to ensure that your business is TWC Ready. If you get a call or visit from the TWC, find an experienced TWC employment attorney ASAP!
