The bill directs the commissioner of insurance to conduct, on at least an annual
basis, outreach and education to insurers and other persons regulated by the state
insurance laws on how to identify the misclassification of employees and report
suspected misclassifications to the appropriate federal and state agencies.

The bill requires DWD to design and make available to employers a notice
regarding worker classification laws, requirements for employers and employees,
and penalties for noncompliance. Under the bill, all employers in this state must post
the notice in a conspicuous place where notices to employees are customarily posted.
The bill also provides a penalty of not more than $100 for an employer that does not
post the notice as required.

Under the bill, DWD must establish and maintain on the department's website
information regarding worker classification laws, requirements for employers and
employees, penalties for noncompliance, and contact information at each state
agency that administers worker classification laws.

Current law requires DWD to assess an administrative penalty against an
employer engaged in construction projects or in the painting or drywall finishing of
buildings or other structures who knowingly and intentionally provides false
information to DWD for the purpose of misclassifying or attempting to misclassify
an individual who is an employee of the employer as a nonemployee under the UI law.
The penalty under current law is $500 for each employee who is misclassified, not
to exceed $7,500 per incident. Current law additionally requires DWD to assess an
administrative penalty against such an employer who, through coercion, requires an
individual to adopt the status of a nonemployee in the amount of $1,000 for each
individual so coerced, but not to exceed $10,000 per calendar year. Penalties are
deposited in the unemployment program integrity fund.

The bill removes the $7,500 and $10,000 limitations on these penalties and
provides that the penalties double for each act occurring after the date of the first
determination of a violation. The bill also removes the limitations on the types of
employers that the penalties apply to, allowing them to be assessed against any type
of employer that violates the above prohibitions.

Under current law, DWD is required to assess an administrative penalty
against an employer who requires an employee to pay for any part of worker's
compensation insurance or who fails to provide mandatory worker's compensation
insurance coverage. If the employer violates those requirements, for the first 10
days, the penalty under current law is not less than $100 and not more than $1,000
for such a violation. If the employer violates those requirements for more than 10
days, the penalty under current law is not less than $10 and not more than $100 for
each day of such a violation.

The bill provides that the penalty for violations occurring after the second such
violation is $3,000 per violation, or three times the amount of the insurance premium
that would have been payable, whichever is greater. The bill also provides that the
penalty for violations occurring after the third such violation is $4,000 per violation,
or four times the amount of the insurance premium that would have been payable,
whichever is greater.

Also under current law, if an employer who is required to provide worker's
compensation insurance coverage provides false information about the coverage to
his or her employees or contractors who request information about the coverage, or
who fails to notify a person who contracts with the employer that the coverage has
been canceled in relation to the contract, DWD is required to assess a penalty of not
less than $100 and not more than $1,000 for each such violation.

The bill provides that the penalty for violations occurring after the third such
violation is $3,000 per violation, and $4,000 for violations occurring after the fourth
such violation.

The bill requires the Department of Administration to direct state agencies,
constitutional offices, departments, independent agencies, and societies,
associations, and certain other agencies of state government for which
appropriations are made by law, to provide educational outreach regarding worker
misclassification to employers, workers, and organizations that serve vulnerable
populations.

The bill requires the Department of Financial Institutions to provide
informational materials and resources on worker misclassification to each person
who files with DFI documents forming a business corporation, nonstock corporation,
limited liability company, limited liability partnership, or limited partnership.

Under current law, if an insurer or self-insured employer has evidence that a
worker's compensation claim is false or fraudulent, the insurer or self-insured

employer must generally report the claim to DWD. If, based on the investigation,
DWD has a reasonable basis to believe that criminal insurance fraud has occurred,
DWD must refer the matter to the district attorney for prosecution. Also under
current law, DWD may request assistance from the Department of Justice to
investigate false or fraudulent activity related to a worker's compensation claim. If,
based on that investigation, DWD has a reasonable basis to believe that theft,
forgery, fraud, or any other criminal violation has occurred, DWD must refer the
matter to the district attorney or DOJ for prosecution. The bill extends these
requirements to insurers who have evidence that an application for worker's
compensation insurance coverage is fraudulent or that an employer has committed
fraud by misclassifying employees to lower the employer's worker's compensation
insurance premiums.

AB398-ASA1,4,82 16.40 (24) Worker misclassification outreach. Direct all departments to
3provide targeted educational outreach regarding worker misclassification in
4English, Spanish, and other languages spoken by a significant number of individuals
5in this state, to employers, workers, and organizations that serve vulnerable
6populations, including individuals with limited English proficiency. The outreach
7shall emphasize the appropriate departments to contact and the rights of individuals
8to remain anonymous when reporting worker misclassification.

AB398-ASA1,4,13 10101.147 Construction contractor registration. (1) (a) Except as provided
11in par. (b), no person may hold himself or herself out or act as a construction
12contractor unless that person is registered as a construction contractor by the
13department.