Proposed Rules Title 40

TITLE 40. SOCIAL SERVICES AND ASSISTANCE

CHAPTER 817. CHILD LABOR

The Texas Workforce Commission (TWC) proposes amendments to the following sections of Chapter 817, relating to Child Labor:

Subchapter A. General Provisions, §§817.2, 817.5 and 817.6

Subchapter B. Limitations on the Employment of Children, §817.22 and §817.24

Subchapter C. Employment of Child Actors, §817.31 and §817.32

TWC proposes the following new subchapter to Chapter 817, relating to Violations and Administrative Penalties:

Subchapter D. Violations and Administrative Penalties, §§817.34 - 817.36

PART I. PURPOSE, BACKGROUND, AND AUTHORITY

The purpose of the amendments to Chapter 817 is to address statutory changes enacted by House Bill (HB) 2459, 88th Texas Legislature, Regular Session (2023); clarify definitions and terms under Texas Labor Code, Chapter 51; provide policy clarifications; and make other technical corrections.

Prior to the enactment of HB 2459, only employers had appeal rights relating to child labor preliminary determination orders or child labor appeal tribunal decisions. HB 2459 repealed and replaced several sections of Texas Labor Code, Chapter 51, and amended Texas Labor Code §301.0015 to establish Commission review of child labor appeal tribunal orders. The administrative hearings process in Texas Labor Code, Chapter 51, now mirrors the process in Texas Labor Code, Chapter 61. TWC is taking the opportunity to use its policy function to provide additional clarity to employers regarding how inspections and penalties operate under Texas Labor Code, Chapter 51, along with technical cleanup.

Rule Review

Texas Government Code §2001.039 requires that every four years each state agency review and consider for readoption, revision, or repeal each rule adopted by that agency. TWC has assessed whether the reasons for adopting or readopting the rules continue to exist. TWC finds that the rules in Chapter 817 are needed, reflect current legal and policy considerations, and reflect current TWC procedures. The reasons for initially adopting the rules continue to exist. TWC, therefore, proposes to readopt Chapter 817 as amended.

PART II. EXPLANATION OF INDIVIDUAL PROVISIONS

(Note: Minor editorial changes are made that do not change the meaning of the rules and, therefore, are not discussed in the Explanation of Individual Provisions.)

SUBCHAPTER A. GENERAL PROVISIONS

TWC proposes the following amendments to Subchapter A:

§817.2. Definitions

Section 817.2(1) adds a definition for Agency.

Section 817.2(8) adds a definition for Commission.

Section 817.2(12) modifies the definition of Employer from an entity to a person to be consistent with Texas Labor Code §51.002.

Section 817.2(14) adds a definition for Employs.

§817.5. Certificate of Age

Section 817.5(a)(1) is amended to clarify that applicants must use the TWC-provided application form.

§817.6. Appeals

Section 817.6 is amended to clarify that hearings conducted under Texas Labor Code, Chapter 51, are subject to the rules and hearing procedures set out in TWC Chapter 815 Unemployment Insurance.

SUBCHAPTER B. LIMITATIONS ON THE EMPLOYMENT OF CHILDREN

TWC proposes the following amendments to Subchapter B:

§817.22. Hardship Waiver of Hours Requirements for 14- and 15-Year-Old Children

Section 817.22 is amended to clarify the roles of the Agency and Commission.

§817.24. Limitations on the Employment of Children to Solicit

Section 817.24 is amended to clarify the roles of the Agency and its Wage and Hour Department.

SUBCHAPTER C. EMPLOYMENT OF CHILD ACTORS

TWC proposes the following amendments to Subchapter C:

§817.31. Hardship Waiver of Hours Requirements for 14- and 15-Year-Old Children

Section 817.31 is amended to clarify the roles of the Agency and Commission.

§817.32. Application Exceptions

Section 817.32 is amended to clarify the roles of the Agency and Commission.

SUBCHAPTER D. VIOLATIONS AND ADMINISTRATIVE PENALTY

The Commission proposes new Subchapter D as follows:

New Subchapter D, regarding violations and administrative penalties, provides clarification regarding TWC's interpretation of the enforcement provisions in Texas Labor Code, Chapter 51.

§817.34. Violations

New §817.34 clarifies the requirements to establish a violation under Texas Labor Code, Chapter 51, or this chapter. While an offense under Texas Labor Code, Chapter 51, includes a culpability requirement, a violation that may lead to an administrative penalty does not include a required culpability. As such, an offense will always be a violation, but a violation will not always be an offense. This section also clarifies that TWC has jurisdiction over child labor violations for the two-year period preceding the inspection, as established under Texas Labor Code §51.021, and jurisdiction over violations by a sexually oriented business for a five-year period preceding an inspection under Texas Labor Code §51.016. The new section also clarifies that TWC has jurisdiction to impose an administrative penalty for child labor violations that occurred during the two-year period even if the child is no longer working for the employer at the time the administrative penalty is imposed.

§817.35. Inspection; Collection of Information; Hinderance

New §817.35 clarifies the places that TWC may inspect by defining the basis that can be used to establish good reason to believe a violation has occurred and addresses TWC's authority to request records concerning the employment of a child. This section also specifies what actions are considered a hinderance to an inspection and a violation under Texas Labor Code, Chapter 51, and this chapter.

§817.36. Administrative Penalty

New §817.36 provides clarification regarding TWC's interpretation of the administrative penalty factors under Texas Labor Code §51.033 and requires the Commission to adopt a penalty matrix.

PART III. IMPACT STATEMENTS

Chris Nelson, Chief Financial Officer, has determined that for each year of the first five years the rules will be in effect, the following statements will apply:

There are no additional estimated costs to the state and to local governments expected as a result of enforcing or administering the rules.

There are no estimated cost reductions to the state and to local governments as a result of enforcing or administering the rules.

There are no estimated losses or increases in revenue to the state or to local governments as a result of enforcing or administering the rules.

There are no foreseeable implications relating to costs or revenue of the state or local governments as a result of enforcing or administering the rules.

There are no anticipated economic costs to individuals required to comply with the rules.

There is no anticipated adverse economic impact on small businesses, microbusinesses, or rural communities as a result of enforcing or administering the rules.

Based on the analyses required by Texas Government Code §2001.024, TWC has determined that the requirement to repeal or amend a rule, as required by Texas Government Code §2001.0045, does not apply to this rulemaking.

Takings Impact Assessment

Under Texas Government Code §2007.002(5), "taking" means a governmental action that affects private real property, in whole or in part or temporarily or permanently, in a manner that requires the governmental entity to compensate the private real property owner as provided by the Fifth and Fourteenth Amendments to the US Constitution or the Texas Constitution, §17 or §19, Article I, or restricts or limits the owner's right to the property that would otherwise exist in the absence of the governmental action, and is the producing cause of a reduction of at least 25 percent in the market value of the affected private real property, determined by comparing the market value of the property as if the governmental action is not in effect and the market value of the property determined as if the governmental action is in effect. TWC completed a Takings Impact Assessment for the proposed rulemaking action under Texas Government Code §2007.043. The primary purpose of this proposed rulemaking action, as discussed elsewhere in this preamble, is to implement the statutory changes in HB 2459, particularly the Commission's review of child labor appeal tribunal decisions, and to clarify the TWC's enforcement of the child labor protections in Texas Labor Code, Chapter 51.

The proposed rulemaking action will not create any additional burden on private real property or affect private real property in a manner that would require compensation to private real property owners under the US Constitution or the Texas Constitution. The proposal also will not affect private real property in a manner that restricts or limits an owner's right to the property that would otherwise exist in the absence of the governmental action. Therefore, the proposed rulemaking will not cause a taking under Texas Government Code, Chapter 2007.

Government Growth Impact Statement

TWC has determined that during the first five years the rules will be in effect, they:

--will not create or eliminate a government program;

--will not require the creation or elimination of employee positions;

--will not require an increase or decrease in future legislative appropriations to TWC;

--will not require an increase or decrease in fees paid to TWC;

--will not create a new regulation;

--will not expand, limit, or eliminate an existing regulation;

--will not change the number of individuals subject to the rules; and

--will not positively or adversely affect the state's economy.

Economic Impact Statement and Regulatory Flexibility Analysis

TWC has determined that the rules will not have an adverse economic impact on small businesses or rural communities, as the proposed rules place no requirements on small businesses or rural communities.

Mariana Vega, Director, Labor Market Information, has determined that there is not a significant negative impact upon employment conditions in the state as a result of the rules.

Chuck Ross, Director, Fraud Deterrence and Compliance Monitoring, has determined that for each year of the first five years the rules are in effect, the public benefit anticipated as a result of enforcing the proposed rules will be to provide better clarity regarding the enforcement of Texas Labor Code, Chapter 51.

PART IV. COORDINATION ACTIVITIES

HB 2459 amended Texas Labor Code, Chapter 51, to establish Commission review of child labor appeal tribunal orders. The proposed rule amendments clarify the rules and make technical corrections to align with the changes made to the Texas Labor Code. The public will have an opportunity to comment on these proposed rules when they are published in the Texas Register as set forth below.

PART V. PUBLIC COMMENTS

Comments on the proposed rules may be submitted to TWCPolicyComments@twc.texas.gov and must be received no later than November 4, 2024.

SUBCHAPTER A. GENERAL PROVISIONS

40 TAC §§817.2, 817.5, 817.6

STATUTORY AUTHORITY

The rules are proposed under:

--Texas Labor Code §51.023, which provides TWC with the specific authority to adopt rules necessary to promote the purpose of Texas Labor Code, Chapter 51; and

--Texas Labor Code §301.0015(a)(6), which provides TWC with the general authority to adopt, amend, or repeal such rules as it deems necessary for the effective administration of TWC services and activities.

The proposed rules relate to Texas Labor Code, Title 2.

§817.2.Definitions.

The following words and terms, when used in this chapter or in Texas Labor Code, Chapter 51, shall have the following meanings.

(1) Agency--The unit of state government established under Texas Labor Code, Chapter 301, that is presided over by the Commission and administered by the executive director to operate the integrated workforce development system; administer the unemployment compensation insurance program in this state as established under the Texas Unemployment Compensation Act, Texas Labor Code, Title 4, Subtitle A, as amended; and enforce child labor protections under Texas Labor Code, Chapter 51.

(2) [~~(1)~~] Applicant--A child or the child's parent, legal guardian, legal custodian, or prospective employer.

(3) [~~(2)~~] Business or enterprise operated by a parent or custodian--A business or enterprise in which a parent or custodian exerts active direct control over the entire operation of the business or enterprise by making day-to-day decisions affecting basic income and work assignments, hiring and firing employees, and exercising direct supervision of the work.

(4) [~~(3)~~] Business or enterprise owned by a parent or custodian--A business or enterprise owned by a parent or custodian as a sole proprietor, a partner in a partnership, or an officer or member of a corporation.

(5) [~~(4)~~] Casual employment--Employment that is irregular or intermittent and not on a scheduled basis.

(6) [~~(5)~~] Child--An individual under 18 years of age.

(7) [~~(6)~~] Child actor--A child under the age of 14 who is to be employed as an actor or other performer.

(8) [~~(7)~~] Child actor extra--A child under the age of 14 who is employed as an extra without any speaking, singing, or dancing roles, usually in the background of the performance.

(9) Commission--The body of governance of the Texas Workforce Commission composed of three members appointed by the governor as established under Texas Labor Code §301.002 that includes one representative of labor, one representative of employers, and one representative of the public. The duties of the Commission include reviewing the decision of a child labor appeal tribunal under Subchapter D, Chapter 51, of the Texas Labor Code. The definition of Commission shall apply to all uses of the term in rules contained in this part, unless otherwise defined, relating to the Texas Workforce Commission.

(10) [~~(8)~~] Direct supervision of the parent or custodian--A child is employed under the direct supervision of a parent or custodian when the parent or custodian controls, directs, and supervises all activities of the child.

(11) [~~(9)~~] Employee--An individual who is employed by an employer for compensation.

(12) [~~(10)~~] Employer--A person [~~An entity~~] who employs one or more employees or acts directly or indirectly in the interests of an employer in relation to an employee.

(13) [~~(11)~~] Employment--Any service, including service in interstate commerce, that is performed for compensation or under a contract of hire, whether written, oral, express, or implied.

(14) Employs--To suffer or permit to work.

(15) [~~(12)~~] Executive director--The executive director of the Texas Workforce Commission or the executive director's designee.

(16) [~~(13)~~]Private school--As set forth in Texas Education Code, Chapter 5, a school that offers a course of instruction for students in one or more grades from prekindergarten through grade 12, and is not operated by a governmental entity.

§817.5.Certificate of Age.

(a) To request a certificate of age, an applicant must submit the following:

(1) a completed application on a form provided by the Agency [~~Commission~~];

(2) a recent photograph (color or black and white) approximately 1 1/2 inches by 1 1/2 inches, showing a full head shot of the applicant; and

(3) proof of age. A copy of one of the following documents is required as proof of age:

(A) birth certificate;

(B) baptismal certificate showing the date of birth;

(D) passport or certificate of arrival in the United States issued not more than one year prior to the date of application for certificate; or

(E) the school record or the school-census record of the age of the child, together with the sworn statement of a parent, guardian, or person having custody of the child as to the age of the child, and [~~also~~] a certificate signed by a physician specifying his or her opinion as to the age of the child, and the height, weight, and other facts relating to development upon which his or her opinion concerning age is based.

(b) Certificates of age are effective from the date of their issuance until the applicant reaches 18 years of age. No renewal is necessary, but lost certificates may be reissued upon new application.

§817.6.Appeals.

Hearings conducted under Texas Labor Code, Chapter 51, are subject to the rules and hearing procedures set out in Chapter 815 of this title, except to the extent that such sections are clearly inapplicable or contrary to provisions set out under this chapter [~~the Unemployment Insurance Rules at 40 TAC Chapter 815, except to the extent that such sections are clearly inapplicable or contrary to provisions set out under the Texas Child Labor Rules~~] or under Texas Labor Code, Chapter 51.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on September 17, 2024.

TRD-202404470

Les Trobman

General Counsel

Texas Workforce Commission

Earliest possible date of adoption: November 3, 2024

For further information, please call: (512) 850-8356

SUBCHAPTER B. LIMITATIONS ON THE EMPLOYMENT OF CHILDREN

40 TAC §817.22, §817.24

STATUTORY AUTHORITY

The rules are proposed under:

--Texas Labor Code §51.023, which provides TWC with the specific authority to adopt rules necessary to promote the purpose of Texas Labor Code, Chapter 51; and

The proposed rules relate to Texas Labor Code, Title 2.

§817.22.Hardship Waiver of Hours Requirements for 14- and 15-Year-Old [~~14 and 15 Year Old~~] Children.

(a) An applicant applying for a hardship waiver from the limitations on hours worked for 14- and 15-year-old [~~14 and 15 year old~~] children must obtain a certificate of age under the provisions of §817.5 of this chapter [~~title (relating to Certificate of Age)~~] and file a hardship application. The applicant may file both applications concurrently.

(b) A hardship application must contain:

(1) full details of the prospective employment and the proposed hours to be worked;

(2) a written statement that it is necessary for the child to work to support himself or his immediate family, with supporting information;

(3) a written statement from the principal of the school in which the child is enrolled as to the advisability of allowing the child to work the hours identified; and

(4) a written statement from the prospective employer. The prospective employer's statement shall provide:

(A) that the child will be employed; and

(B) full details of the work, including rate of pay, hours to be worked, and expected duration of employment.

(c) A hardship application may contain any other information the applicant believes would support granting [~~the granting of~~] the waiver.

(d) All waivers shall be valid for one year unless established for a shorter period and may be extended at the sole discretion of the executive director.

(e) After all pertinent information has been reviewed by the Agency [~~Commission~~], the waiver will be granted or denied. If additional information is needed before a decision is made, the Agency [~~Commission~~] may gather additional facts and schedule a conference to review the merits of the application with interested persons.

(f) At any conference, the Agency [~~Commission~~] will be represented by an employee designated by the executive director, who shall make a written report to the executive director within 20 working days following the conference. The report shall contain a determination as to whether or not the waiver should be granted. Unless changed by the executive director, the initial determination shall remain in full force and effect. All interested parties will be advised in writing of the final determination of the Agency [~~Commission~~] as soon as practicable. No appeal to the Commission [~~Commissioners~~] is authorized.

(g) This proceeding is not a contested case under the Texas Government Code, Chapter 2001, Administrative Procedure Act.

§817.24.Limitations on the Employment of Children to Solicit.

(a) A person may not begin the employment of a child to solicit as defined in Texas Labor Code §51.0145 and as described in §817.4(b) of this chapter [~~Chapter (relating to Statement of Commission Intent)~~], until the Agency's Wage and Hour [~~Commission's Labor Law~~] Department has received:

(1) a copy of the signed Parental Consent Form approved by the Agency [~~Commission~~]; and

(2) the information required by statute to be provided to the individual who gives consent.

(b) A copy of the Parental Consent Form may be obtained from the Agency's Wage and Hour [~~Commission's Labor Law~~] Department.

(c) A person employing a child under Texas Labor Code §51.0145 shall limit each solicitation trip to within a radius of no greater than thirty miles from the child's home, unless the parent or other person identified in Texas Labor Code §51.0145(c)(1) signs a Parental Consent Form in advance of the solicitation trip specifically approving a greater distance.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on September 17, 2024.

TRD-202404471

Les Trobman

General Counsel

Texas Workforce Commission

Earliest possible date of adoption: November 3, 2024

For further information, please call: (512) 850-8356

SUBCHAPTER C. EMPLOYMENT OF CHILD ACTORS

40 TAC §817.31, §817.32

STATUTORY AUTHORITY

The rules are proposed under:

--Texas Labor Code §51.023, which provides TWC with the specific authority to adopt rules necessary to promote the purpose of Texas Labor Code, Chapter 51; and

The proposed rules relate to Texas Labor Code, Title 2.

§817.31.Child Actor Authorization.

(a) A child under 14 years of age may be employed in Texas as a child actor only by compliance with the provisions of this subchapter.

(b) Every person applying for child actor authorization must submit:

(1) an application for authorization on a form provided by the Agency [~~Commission~~] and signed by a parent, guardian, or person having custody of the child;

(2) proof of age; and

(3) a photograph that complies with §817.5 of this chapter [~~title (relating to Certificate of Age)~~].

(c) An authorization is effective when issued and expires when the child reaches 14 years of age[,] unless the Agency [~~Commission~~] establishes a shorter time period. Lost authorization certificates may be reissued upon new application.

§817.32.Application Exceptions.

(a) Special authorization for child actors to be employed as extras is granted without the need for filing an application if the employer or its agent:

(1) communicates with the Agency [~~Commission~~ ] prior to the actual work being performed, identifying the employer, the project, the approximate number of extras intended to be employed on the particular project, and the anticipated dates of employment;

(2) prior to employment, uses reasonable efforts to establish that each prospective child actor extra is under 14 years of age;

(3) secures the written consent of a parent, guardian, or person having custody of the child to his or her employment as an extra on the particular project;

(4) notifies all affected school principals of the intent to employ their students as extras, furnishing such details concerning the nature and duration of the work as to give school authorities reasonable information concerning the proposed use of their students in the particular project; and

(5) submits a written post-production report to the Agency [~~Commission~~], within 10 days following the last day extras are employed, identifying the name, social security number, date of birth, and inclusive dates of employment for each child actor so employed, certifying compliance with Texas Labor Code, Chapter 51 and this chapter [~~(relating to Child Labor)~~].

(b) Special authorizations for extras are deemed effective upon employment and expire as soon as one of the following events occurs:

(1) the child reaches age 14;

(2) the child receives a Child Actor Authorization;

(3) the parent, guardian, or person having custody of the child revokes consent in writing; or

(4) the child's employment on the particular project by that employer ends.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on September 17, 2024.

TRD-202404472

Les Trobman

General Counsel

Texas Workforce Commission

Earliest possible date of adoption: November 3, 2024

For further information, please call: (512) 850-8356

SUBCHAPTER D. VIOLATIONS AND ADMINISTRATIVE PENALTIES

40 TAC §§817.34 - 817.36

STATUTORY AUTHORITY

The rules are proposed under:

--Texas Labor Code §51.023, which provides TWC with the specific authority to adopt rules necessary to promote the purpose of Texas Labor Code, Chapter 51; and

The proposed rules relate to Texas Labor Code, Title 2.

§817.34.Violations.

(a) An offense under Texas Labor Code, Chapter 51, is criminal conduct and includes a requirement of culpability per Texas Penal Code, Chapter 6.

(b) A person commits a violation by failing to adhere to a requirement or restriction of Texas Labor Code, Chapter 51, or this chapter. A person may commit a violation and an offense for the same activity. A violation under Texas Labor Code, Chapter 51, is administrative in nature and not criminal conduct and does not include a requirement of culpability.

(d) The Agency has jurisdiction over violations that occurred during the five-year period preceding, up to, and including the date of an inspection under Texas Labor Code §51.016.

(e) The Agency has jurisdiction over violations that occurred during the two-year period preceding, up to, and including the date of an inspection under Texas Labor Code §51.021.

§817.35.Inspection; Collection of Information; Hinderance.

(a) The Agency has authority to inspect, request proof or records, and collect information under Texas Labor Code §51.016 and §51.021.

(b) Per §51.016(h), the Agency has good reason to believe that an individual younger than 21 years of age is employed, has been employed, or has entered into a contract for the performance of work or the provision of service with a sexually oriented business based upon complaints, observations, or information obtained from law enforcement or the attorney general.

(c) Per §51.021, during working hours, the Agency, or its designee, may inspect a place where there is good reason to believe that a child is employed or has been employed within the last two years. The Agency may consider location, historical data, industry characteristics, complaints, trends, or observations when determining whether good reason to believe a child is or has been employed exists.

(d) Per §51.021, during working hours, the Agency, or its designee, may collect information concerning the employment of a child who works, or within the last two years has worked, at a place inspected under Texas Labor Code §51.021(a)(1). The Agency may require the person to produce any records necessary to properly administer Texas Labor Code, Chapter 51, or this chapter.

(e) A person commits a violation under §51.021(b) if the person resists, delays, or obstructs the Agency's inspection or collection of information under this section, which includes, but is not limited to, preventing access to a place, failing to timely provide to the Agency requested information, or destroying records to obscure a violation.

§817.36.Administrative Penalties.

(a) The Commission shall adopt a penalty matrix that will be used to determine the amount of an administrative penalty under Texas Labor Code §51.033.

(b) When evaluating "the seriousness of the violation" under Texas Labor Code §51.033, the Commission will consider the level of risk of injury or death to a minor.

(c) When evaluating "the history of previous violations" under Texas Labor Code §51.033, the Commission will look at an employer's pattern or practice of violations.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on September 17, 2024.

TRD-202404473

Les Trobman

General Counsel

Texas Workforce Commission

Earliest possible date of adoption: November 3, 2024

For further information, please call: (512) 850-8356

CHAPTER 844. PROHIBITED CORONAVIRUS VACCINE MANDATES BY PRIVATE EMPLOYER

The Texas Workforce Commission (TWC) proposes new Chapter 844, relating to Prohibited Coronavirus Vaccine Mandates by Private Employer, comprising the following subchapters:

Subchapter A. General Provisions, §844.1 and §844.2

Subchapter B. Complaints, §§844.25 - 844.30

Subchapter C. Determinations, §§844.50 - 844.55

Subchapter D. Administrative Hearings and Judicial Review, §§844.75 - 844.92

PART I. PURPOSE, BACKGROUND, AND AUTHORITY

The purpose of Chapter 844 is to establish rules as required by Senate Bill (SB) 7, 88th Texas Legislature, Third Special Session (2023), which added Texas Health and Safety Code, Chapter 81D, Prohibited Coronavirus Virus Vaccine Mandates by Private Employer.

SB 7 prohibits employers from taking adverse actions against applicants, employees, or contractors based on a refusal to be vaccinated against COVID-19. If an adverse action was taken by an employer against an applicant, employee, or contractor, the applicant, employee, or contractor can file a complaint and TWC will investigate. An employer who is determined to have taken a prohibited adverse action is subject to an administrative penalty unless the employer takes reasonable efforts to make the complainant whole. SB 7 also allows TWC to recover the reasonable cost of investigation when it is determined that the employer took a prohibited adverse action.

Chapter 844 rules address the requirements for and methods of submitting a complaint. The chapter also establishes an appeal procedure to provide parties notice and an opportunity to be heard at a meaningful time and in a meaningful manner.

PART II. EXPLANATION OF INDIVIDUAL PROVISIONS

SUBCHAPTER A. GENERAL PROVISIONS

TWC proposes new Subchapter A, General Provisions, as follows:

§844.1. Purpose

New §844.1 defines the purpose of the Chapter 844 rules.

§844.2. Definitions

New §844.2 defines "Adverse Action," "Agency," "Complainant," "Complaint Form," "Contractor," "COVID-19," "Day," "Department," "Employee," "Employer," "Governmental Entity," "Party," and "Person." The definition of Employee would include an individual who seeks admission to or is employed under a medical residency program in Texas.

SUBCHAPTER B. COMPLAINTS

TWC proposes new Subchapter B, Complaints, as follows:

§844.25. Complaint Requirements

New §844.25 establishes the requirements and method to file a complaint. Complaints must be filed online within 90 days of the adverse action and must provide the name of the complainant, name of the employer, and the nature and description of the adverse action. The complainant must also declare that the information provided in the complaint is true and correct.

§844.26. Valid Complaints

New §844.26 addresses issues concerning the validity of a complaint. These issues include that the adverse action must have occurred after the effective date of SB 7, that the employer is not a governmental entity, and that the complaint is not duplicative of a prior complaint. All references to days in this chapter mean calendar days.

§844.27. Jurisdiction

New §844.27 defines when employers are subject to TWC's jurisdiction under this Chapter as it relates the connection of the work, complainant, and employer to Texas.

§844.28. Dismissal

New §844.28 allows TWC to dismiss complaints that are incomplete or do not meet the requirements of §844.26. Dismissed complaints can be refiled by the complainant within 30 days of the dismissal.

§844.29. Adverse Action

New §844.29 provides context to the definition of adverse action by further addressing the reasonable person standard. Examples of an adverse action include, but are not limited to, terminating an employee, terminating a contractual relationship, demoting an employee, reducing pay or compensation, not hiring an employee, not offering a contract for a contract position, or a reduction in hours not related to a business need. When determining whether an employer's action was an adverse action, the Agency will consider the employer's good faith attempt to comply with a legal obligation as evidence that the employer's action would not be considered by a reasonable person to be for the purpose of punishing, alienating, or otherwise adversely affecting a complainant.

§844.30. Investigation of Complaints in Health Care

New §844.30 requires TWC to consult with the Texas Department of State Health Services (DSHS) when a complaint against a health care facility, health care provider, or physician concerns a policy that requires the use of protective medical equipment to determine if the policy is reasonable. Section 844.30 also requires TWC and DSHS to enter an MOU to facilitate coordination.

SUBCHAPTER C. DETERMINATIONS

TWC proposes new Subchapter C, Determinations, as follows:

§844.50. Preliminary Determination Order, Determination on Remedial Action, and Penalty and Cost Order

New §844.50 defines the procedures for issuing a determination after the investigation is complete. A preliminary determination order will be mailed to each party informing them whether TWC found a violation, which would require the imposition of an administrative penalty, and whether TWC will seek to recover investigative costs from the employer. SB 7 prescribes the administrative penalty amount of $50,000 for each violation and did not provide TWC with discretionary authority to adjust the penalty amount. The preliminary determination order would inform the parties of appeal rights and the employer's ability to take remedial action to avoid the administrative penalty. If an employer completes remedial action and submits proof of remedial action within 30 days of a preliminary determination order or decision, TWC will issue a determination on remedial action, which is an appealable document. Once the determination or decision is final, a penalty and cost order will be issued instructing the employer to make payment to TWC. If an employer fails to make payment in accordance with the penalty and cost order, TWC will refer the amount to the Office of the Attorney General in accordance with Texas Government Code §2107.003 as well as reporting the indebtedness to the Texas Comptroller of Public Accounts under the warrant hold provisions in Texas Government Code §403.055(f).

§844.51. Remedial Action

New §844.51 establishes how an employer may take remedial action, in accordance with Texas Health and Safety Code §81D.006, to avoid the imposition of an administrative penalty. The section also defines acceptable proof of a remedial action and the method for submitting proof of remedial action, which must be submitted within 30 days of a preliminary determination order.

§844.52. Investigative Costs

New §844.52 addresses when TWC may seek to recover the reasonable costs of an investigation.

§844.53. Corrected Determinations

New §844.53 allows TWC to issue corrected determinations or decisions to correct an error including an incorrect address for a party.

§844.54. Withdrawal of Complaint

New §844.54 allows a complainant to withdraw a complaint before the preliminary determination order becomes final.

§844.55. Appeal and Determination Finality

New §844.55 establishes that a party can file an appeal to a determination within 30 days of the mailing date of the determination by submitting a written appeal by mail, fax, or other method approved by TWC on the preliminary determination order.

SUBCHAPTER D. ADMINISTRATIVE HEARINGS AND JUDICIAL REVIEW

TWC proposes new Subchapter D, Administrative Hearings and Judicial Review, as follows:

§844.75. Administrative Hearings

New §844.75 states that an administrative hearing will be conducted by the Agency's Special Program Appeals department by electronic means.

§844.76. Parties

Under new §844.76, the parties to the hearing are the complainant, the employer and TWC.

§844.77. Hearing Scheduling and Notice

New §844.77 prescribes the procedures for scheduling and issuing a hearing notice upon the receipt of an appeal. The section states what information must be included in the hearing notice.

§844.78. Representation

New §844.78 allows parties to be represented by an attorney or other individual of their choice.

§844.79. Ex Parte Communications

New §844.79 prohibits ex parte communications without notice and an opportunity for all parties to participate.

§844.80. Hearing Procedures

New §844.80 establishes hearing procedures for the administrative hearing including general procedures and procedures for evidence, witnesses, exchange of exhibits, and maintaining the hearing record.

§844.81. Postponement and Continuance

New §844.81 addresses situations when the hearing can be postponed or continued.

§844.82. Default

New §844.82 describes the procedures when a party fails to appear for the hearing and for a non-appearing party to file a motion to set aside the default.

§844.83. Timeliness

New §844.83 establishes the timeliness guidelines for this chapter including address changes, dating of appeal documents, and the evidence required to overcome the presumption of receipt.

§844.84. Withdrawal of an Appeal

New §844.84 allows a party to withdrawal an appeal before the hearing officer's decision is final.

§844.85. Decision

New §844.85 states that the hearing officer's decision must be issued in writing as soon as possible after the hearing closes; states the information that must be included in the decision; and states that the decision must be mailed to the parties or their representatives. A decision can be reopened if the employer submits a notice to the hearing officer within 14 days of the mailing date of the decision that the employer intends to take remedial action. The employer would then have 30 days to submit proof of remedial action.

§844.86. Finality of Decision

New §844.86 states that the hearing officer's decision becomes final 14 days after the date the decision is mailed unless before that date the hearing officer reopens the decision, a party files a timely appeal, or the commission decides to remove the case to itself.

§844.87. Commission

New §844.87 sets forth the Commission's duties under this chapter, including which member of the Commission shall serve as chair when the Commission acts under this chapter.

§844.88. Removal of Order Pending Before a Hearing Officer

New §844.88 allows the Commission to remove a pending hearing to itself.

§844.89. Commission Review of Hearing Officer Order

New §844.89 establishes that the Commission may affirm, modify, or set aside a penalty order on the basis of previously submitted evidence or direct the taking of additional evidence.

§844.90. Notice of Commission Action

New §844.90 defines the issues to be addressed in a notice of Commission action and requires the Commission to enter a written order for the payment of any penalty or investigative costs the Commission has assessed.

§844.91. Finality of Commission Order

New §844.91 establishes that the Commission order is final 14 days after the date the order is mailed unless the Commission reopens the appeal or a party files a motion for rehearing.

§844.92. Judicial Review

New §844.92 sets forth the method of seeking judicial review of TWC's final decision or order.

PART III. IMPACT STATEMENTS

Chris Nelson, Chief Financial Officer, has determined that for each year of the first five years the rules will be in effect, the following statements will apply:

There are additional estimated costs to the state and to local governments expected as a result of enforcing or administering the rules.

There are no estimated cost reductions to the state and to local governments as a result of enforcing or administering the rules.

There are estimated losses or increases in revenue to the state or to local governments as a result of enforcing or administering the rules.

There are no foreseeable implications relating to costs or revenue of the state or local governments as a result of enforcing or administering the rules.

There are no anticipated economic costs to individuals required to comply with the rules.

There is no anticipated adverse economic impact on small businesses, microbusinesses, or rural communities as a result of enforcing or administering the rules.

Based on the analyses required by Texas Government Code, §2001.024, TWC has determined that the requirement to repeal or amend a rule, as required by Texas Government Code, §2001.0045, does not apply to this rulemaking.

Takings Impact Assessment

Under Texas Government Code, §2007.002(5), "taking" means a governmental action that affects private real property, in whole or in part or temporarily or permanently, in a manner that requires the governmental entity to compensate the private real property owner as provided by the Fifth and Fourteenth Amendments to the US Constitution or the Texas Constitution, §17 or §19, Article I, or restricts or limits the owner's right to the property that would otherwise exist in the absence of the governmental action, and is the producing cause of a reduction of at least 25 percent in the market value of the affected private real property, determined by comparing the market value of the property as if the governmental action is not in effect and the market value of the property determined as if the governmental action is in effect. TWC completed a Takings Impact Assessment for the proposed rulemaking action under Texas Government Code, §2007.043. The primary purpose of this proposed rulemaking action, as discussed elsewhere in this preamble, is to implement and interpret the provisions of Texas Health and Safety Code, Chapter 81D, Prohibited Coronavirus Virus Vaccine Mandates by Private Employer.

Government Growth Impact Statement

TWC has determined that during the first five years the rules will be in effect, they:

--will create or eliminate a government program;

--will require the creation or elimination of employee positions;

--will require an increase or decrease in future legislative appropriations to TWC;

--will require an increase or decrease in fees paid to TWC;

--will create a new regulation;

--will not expand, limit, or eliminate an existing regulation;

--will change the number of individuals subject to the rules; and

--will not positively or adversely affect the state's economy.

Economic Impact Statement and Regulatory Flexibility Analysis

Mariana Vega, Director, Labor Market Information, has determined that there is not a significant negative impact upon employment conditions in the state as a result of the rules.

TWC hereby certifies that the proposal has been reviewed by legal counsel and found to be within TWC's legal authority to adopt.

PART IV. COORDINATION ACTIVITIES

SB 7 requires consultation with the Department of State Health Services.

TWC will provide notice to employers and other stakeholders to increase awareness during the public comment period.

PART V. PUBLIC COMMENTS

Comments on the proposed new rules may be submitted to TWCPolicyComments@twc.texas.gov and must be received no later than November 4, 2024.

SUBCHAPTER A. GENERAL PROVISIONS

40 TAC §844.1, §844.2

PART VI.

STATUTORY AUTHORITY

The rules are proposed to implement Senate Bill 7, 88th Texas Legislature, Third Special Session (2023), which added Texas Health and Safety Code, Chapter 81D, Prohibited Coronavirus Virus Vaccine Mandates by Private Employer.

The rules are proposed under:

--Texas Health and Safety Code §81D.007, which provides TWC with the specific authority to adopt rules as necessary to implement and enforce Texas Health and Safety Code, Chapter 81D; and

The proposed rules relate to Texas Health and Safety Code, Chapter 81D.

§844.1.Purpose.

The purpose of this chapter is to implement and interpret the provisions of Texas Health and Safety Code, Chapter 81D, Prohibited Coronavirus Virus Vaccine Mandates by Private Employer.

§844.2.Definitions.

The following words and terms, when used in this chapter, shall have the following meanings, unless the statute or context in which the word or phrase is used clearly indicates otherwise.

(1) "Adverse Action" means an action taken by an employer that a reasonable person would consider was for the purpose of punishing, alienating, or otherwise adversely affecting an employee, contractor, applicant for employment, or applicant for a contract position.

(2) "Agency" shall have the meaning established under §800.2 of this title.

(3) "Applicant for employment" means a person who has submitted a formal application for an employment position for which the person meets the minimum qualifications and who has a genuine interest in the position.

(4) "Applicant for a contract position" means a person who has submitted a formal application or proposal for a contract position for which the person meets the minimum qualifications and who has a genuine interest in the contract position.

(5) "Complainant" means an employee, contractor, applicant for employment, or applicant for a contract position who files a complaint against an employer alleging an adverse action by the employer against the person in violation of Texas Health and Safety Code, Chapter 81D.

(6) "Complaint Form" means the COVID-19 Vaccine Complaint Form approved by the Agency.

(7) "Contractor" means a person who undertakes specific work for an employer in exchange for a benefit without submitting to the control of the employer over the manner, methods, or details of the work.

(8) "COVID-19" means the 2019 novel coronavirus disease and any variants of the disease.

(9) "Day" means calendar day.

(10) "Department" means the Department of State Health Services.

(11) "Employee" means an individual who is employed by an employer, whether or not for compensation. The term does not include:

(A) a person related to the employer or the employer's spouse within the first or second degree by consanguinity or affinity, as determined under Texas Government Code, Chapter 573; or

(B) a contractor.

(12) "Employer" means a person, other than a governmental entity, who employs one or more employees.

(13) "Governmental Entity" means this state, an agency of this state, a local government entity, or a political subdivision of this state as defined in §821.4 of this title. This definition includes the definition of governmental entity as provided by Texas Health and Safety Code §81B.001(2).

(14) "Party" means the agency, a complainant or employer.

(15) "Person" includes corporation, organization, government or governmental subdivision or agency, business trust, estate, trust, partnership, association, and any other legal entity.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on September 18, 2024.

TRD-202404504

Les Trobman

General Counsel

Texas Workforce Commission

Earliest possible date of adoption: November 3, 2024

For further information, please call: (512) 850-8356

SUBCHAPTER B. COMPLAINTS

40 TAC §§844.25 - 844.30

The rules are proposed under:

--Texas Health and Safety Code §81D.007, which provides TWC with the specific authority to adopt rules as necessary to implement and enforce Texas Health and Safety Code, Chapter 81D; and

The proposed rules relate to Texas Health and Safety Code, Chapter 81D.

§844.25.Complaint Requirements.

(a) A complaint must be filed in writing by the complainant completing the Complaint Form.

(b) A Complaint Form may only be submitted by online submission as identified through the Agency's website page related to COVID-19 mandate complaints or by other means authorized in writing by the Agency.

(1) the name of the complainant;

(2) the name of the employer;

(3) the nature and description of any alleged adverse action the employer took against the complainant; and

(4) any other information specifically requested by the Agency on the Complaint Form that is necessary to resolve the complaint.

(d) The complainant must declare that the information provided in the completed Complaint Form is true and correct.

§844.26.Valid Complaints.

(a) A complaint may only be filed for an adverse action that occurred after the effective date of Senate Bill (SB) 7, 88th Texas Legislature, Third Special Session (2023), which was February 6, 2024.

(b) The complaint must be received by the Agency within 90 days of the date of the adverse action. For adverse actions that occurred after the effective date of SB 7, and before the effective date of this chapter, a complaint must be received by the Agency within 90 days of the date this chapter becomes effective.

(c) A contractor or applicant for a contract position may only file a complaint if the contractor or applicant for a contract position was or would have been a party to the contract with the employer.

(d) A complaint must name an employer that is a non-governmental entity that satisfies the definition of employer in §844.2(12) of this chapter.

(e) A complaint may only be filed by a complainant for an adverse action that was taken against the complainant for a refusal to be vaccinated against COVID-19.

(f) A Complaint Form must be filled out completely and sufficiently to allow the Agency to attempt contact with the employer to investigate the adverse action.

(g) A complainant may not file an additional complaint for an adverse action that has already been the basis of another complaint that is still pending or resulted in the issuance of a preliminary determination order, other than a dismissal under §844.28 of this subchapter, or for a complaint that was withdrawn under §844.54 of this chapter.

(h) During the course of an investigation, a complainant or an employer may provide additional information to the Agency prior to the issuance of a preliminary determination order, which the Agency will consider in addition to evidence offered in the original complaint.

§844.27.Jurisdiction.

(a) The Agency may exercise jurisdiction over complaints under this chapter in which:

(1) the work was performed or would have been performed in Texas; and:

(2) the employer:

(A) is a resident employer; or

(B) is a non-resident employer pursuant to the Texas Civil Practice & Remedies Code, Chapter 17, Subchapter C, also known as the "Texas Long-Arm Statute," when the following are met:

(i) the employer employs the complainant in Texas at the time of the adverse action or the employer's contact with Texas is continuing and systematic; and

(ii) exercising jurisdiction is consistent with:

(I) fair play and justice as determined by the quality, nature, and extent of the employer's activities in Texas including the extent to which the employer avails itself of the benefits and protections of Texas law; and

(II) the relative convenience of the parties.

(b) The Agency shall not exercise jurisdiction over complaints based on work performed or intended to be performed outside the United States.

§844.28.Dismissal.

(a) The Agency may dismiss a complaint that is incomplete or does not meet the requirements of §844.26 of this subchapter.

(b) A dismissal under subsection (a) of this section becomes final unless a complainant refiles the complaint within the period to file a complaint or within 30 days of the mailing of the dismissal, whichever is later.

§844.29.Adverse Action.

(a) To support a finding of a violation under this chapter, the adverse action must cause a result that a reasonable person would regard as an objective and demonstrated harm to the complainant.

(b) If an adverse action was taken, the Agency will consider the reason(s) provided by an employer when determining whether the adverse action was taken due to a refusal to be vaccinated against COVID-19 in violation of Texas Health and Safety Code, Chapter 81D.

§844.30.Investigation of Complaints in Health Care.

If a complaint against a health care facility, health care provider, or physician alleges an adverse action that involved an employer policy that includes requiring the use of protective medical equipment, as described in Texas Health and Safety Code §81D.0035(b), the Agency will consult with the Department to determine whether the policy was reasonable.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on September 18, 2024.

TRD-202404505

Les Trobman

General Counsel

Texas Workforce Commission

Earliest possible date of adoption: November 3, 2024

For further information, please call: (512) 850-8356

SUBCHAPTER C. DETERMINATIONS

40 TAC §§844.50 - 844.55

The rules are proposed under:

--Texas Health and Safety Code §81D.007, which provides TWC with the specific authority to adopt rules as necessary to implement and enforce Texas Health and Safety Code, Chapter 81D; and

The proposed rules relate to Texas Health and Safety Code, Chapter 81D.

§844.50.Preliminary Determination Order, Determination on Remedial Action, and Penalty and Cost Order.

(a) After an investigation, the Agency will mail a preliminary determination order to each party stating whether the Agency determined the employer took an adverse action against the complainant for a refusal to be vaccinated against COVID-19 in violation of Texas Health and Safety Code, Chapter 81D.

(b) If the Agency determines that a violation exists, but no remedial action has occurred prior to the preliminary determination order being issued, the preliminary determination will notify the parties that:

(1) a violation has occurred;

(2) an administrative penalty will be imposed;

(3) the employer may remediate the violation;

(4) the amount of reasonable investigative costs, if any, the Agency will seek to recover from the employer; and

(5) each party has the right to file an appeal.

(c) If the Agency determines that a violation exists, and the employer has taken remedial action prior to the preliminary determination order being issued, the preliminary determination will notify the parties:

(1) that a violation has occurred;

(2) whether the remediation was sufficient to remove the administrative penalty;

(3) whether an administrative penalty will be imposed;

(4) of the amount of reasonable investigative costs, if any, the Agency will seek to recover from the employer; and

(5) that each party has the right to file an appeal.

(d) If an employer submits proof of remedial action after the preliminary determination order is issued, the Agency will issue to each party a separate determination on remedial action with separate appeal rights. An employer has 30 days to submit proof of remedial action from the mailing date of the preliminary determination order. If the employer does not submit proof of remediation within 30 days, and/or does not appeal, the Agency will not consider any proof of remediation. An employer's timely submission of proof of remedial action will be considered an employer appeal of the preliminary determination order and the appeal will be abated until the appeal period for the determination resolving the sufficiency of the remedial action has expired.

(e) If the employer files a timely appeal to the preliminary determination order, the employer may remediate at any time up until the hearing officer issues his or her decision, after which the employer must comply with the requirements of §844.85(e) of this chapter.

(f) After a preliminary determination order, a determination on remedial action, or decision becomes final, the Agency will issue a penalty and cost order to the employer detailing the final amount owed to the Agency by the employer with instructions for submitting payment.

(g) Determinations shall be mailed to each party at the best address available as required by §815.3 of this title, or at the location each party usually receives mail.

(h) A penalty and cost order shall be mailed to the employer at the best address available as required by §815.3 of this title, or at a location the employer usually receives mail.

(i) An administrative penalty under this chapter is not an award of damages to the complainant and no funds will be issued to the complainant by the Agency.

§844.51.Remedial Action.

(a) Under Texas Health and Safety Code §81D.006(a)(1) and (2), an administrative penalty will not be assessed if prescribed remedial action is taken in response to a complaint. The remedial action required to avoid a penalty depends upon the specific facts that resulted in a violation. Depending upon the circumstances of the violation, remedial action may require:

(1) if the complainant applied for an employment or contract position with the employer, and was not offered such position based upon his or her refusal to be vaccinated against COVID-19, the employer must offer the complainant the position applied for;

(2) if the complainant is currently, or was recently, an employee or contractor of the employer, the employer shall take the following remedial steps as applicable to the violation. Not all steps may be applicable to remedy the adverse action that resulted in a violation:

(A) reinstatement of the employee or contractor;

(B) providing the employee or contractor with back pay from the date the employer took the adverse action; and/or

(C) the employer must take every reasonable effort to reverse the effects of the adverse action. Reasonable efforts include, but are not limited to, reestablishing employee benefits for which the employee or contractor otherwise would have been eligible if the adverse action had not been taken.

(b) Acceptable proof of a remedial action may include an offer or hiring letter on company letterhead, a signed new hire paperwork, a signed settlement letter, or completion of an Agency form by the complainant attesting to the remedial action.

(c) Proof of remedial action shall be submitted online as identified through the Agency's website page related to COVID-19 mandate complaints, by other means authorized in writing by the Agency, or to the assigned hearing officer in accordance with §844.85(e) of this chapter.

§844.52.Investigative Costs.

(a) If the Agency determines that the employer violated this chapter, the Agency may recover from the employer reasonable investigative costs incurred in conducting the investigation into whether the employer violated Texas Health and Safety Code, Chapter 81D, regardless of whether the employer took remedial action.

(b) The Agency may not recover from the employer investigative costs incurred in conducting an investigation into whether the employer took remedial action.

(d) The investigative costs may, at the discretion of the Agency, be included in the amount owed in the penalty and cost order even if the employer took remedial action.

§844.53.Corrected Determinations and Decisions.

(a) If Agency staff discover a clerical error of a non-substantive nature in connection with a determination or decision issued under this chapter, within the applicable appeal period, the Agency may reconsider and reissue the determination unless an appeal has already been filed.

(b) A reissued determination voids and replaces the determination or decision issued under this chapter requiring correction and becomes final unless an appeal is filed from the determination within 30 days of the date the reissued determination is mailed.

(c) Notwithstanding subsection (a) of this section, if a determination or decision issued under this chapter is mailed to a party's incorrect address, the Agency may reissue the determination to the party's correct address at any time.

§844.54.Withdrawal of Complaint.

(a) A complainant may withdraw a complaint at any time before the date the preliminary determination order becomes final.

(b) A complainant withdrawing a complaint shall submit a form as prescribed by the Agency.

(c) A complaint that is withdrawn may not be refiled and a new complaint cannot be filed for the same adverse action as the withdrawn complaint.

§844.55.Appeal and Determination Finality.

(a) Appealable Determinations:

(1) An employer determined to have violated this chapter may appeal the preliminary determination order, within 30 days of the mailing date of the determination, to dispute whether a violation of Texas Health and Safety Code, Chapter 81D occurred, or the amount of the assessed investigative costs.

(2) An employer determined to have not met the remedial action requirements under §844.51 of this subchapter may appeal the determination on remedial action within 30 days of the mailing date of the determination.

(3) An employer may appeal a combined determination under §844.50(c) of this subchapter to dispute any of the issues contained therein within 30 days of the mailing date of the determination.

(b) A determination becomes final unless a party files an appeal before the appeal deadline.

(c) An appeal must be filed in writing by mail, common carrier, facsimile (fax), or other method approved by the Agency on the preliminary determination order or on the determination on remedial action.

(d) A penalty and cost order is not an appealable document.

(e) A complainant may appeal any determination or decision issued under this subchapter, regardless of the finding, within 30 days of the mailing date of the determination.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on September 18, 2024.

TRD-202404506

Les Trobman

General Counsel

Texas Workforce Commission

Earliest possible date of adoption: November 3, 2024

For further information, please call: (512) 850-8356

SUBCHAPTER D. ADMINISTRATIVE HEARINGS AND JUDICIAL REVIEW

40 TAC §§844.75 - 844.92

The rules are proposed under:

--Texas Health and Safety Code §81D.007, which provides TWC with the specific authority to adopt rules as necessary to implement and enforce Texas Health and Safety Code, Chapter 81D; and

The proposed rules relate to Texas Health and Safety Code, Chapter 81D.

§844.75.Administrative Hearings.

(a) Administrative hearings shall be conducted subject to the rules and hearing procedures set out in Chapter 815 of this title, except to the extent that such sections are clearly inapplicable or contrary to provisions set out under this chapter.

(b) The hearing is not subject to Texas Government Code, Chapter 2001.

(c) Hearings may be conducted by electronic means, including but not limited to telephonic hearings, unless the hearing officer determines that an in-person hearing is necessary.

(d) Accommodations may be requested, including the need for an in-person hearing or interpreters, through the hearing officer or Agency staff.

§844.76.Parties.

The parties to proceedings under this chapter are the Agency, the complainant, and the employer named in the preliminary determination order or determination on remedial action.

§844.77.Hearing Scheduling and Notice.

(a) Upon receipt of an appeal, the Agency shall assign an impartial hearing officer and mail a notice of hearing to the employer and complainant and/or their designated representatives.

(b) The notice of hearing shall be in writing and include:

(1) a statement of the date, time, place, and nature of the hearing;

(2) a statement of the legal authority and jurisdiction under which the hearing is to be held;

(3) a reference to the sections of the statutes and rules involved;

(4) a statement of the issues to be considered during the hearing; and

(5) either:

(A) a short, plain statement of the factual matters asserted; or

(B) an attachment that incorporates by reference the factual matters asserted in the complaint.

(c) The notice of hearing shall be issued at least 10 days before the date of the hearing unless all parties agree to waive this requirement.

§844.78.Representation.

Parties have the right to be represented by an attorney or other individual of their choice in accordance with §815.18(3) of this title.

§844.79.Ex Parte Communications.

(a) Except as provided in this chapter, and unless required for the disposition of ex parte matters authorized by law, the hearing officer may not communicate, directly or indirectly, in connection with any issue of fact or law with a party, representative of a party, witness, or individual providing testimony except on notice and opportunity for each party to participate.

(b) The hearing officer may communicate concerning the case with an Agency employee who has not participated in the hearing but may do so only for the purpose of using the special skills or knowledge of the Agency and its staff in evaluating the evidence.

§844.80.Hearing Procedures.

(a) General Procedure. The hearing shall be conducted informally and, in such manner, as to ascertain the substantive rights of the parties. The hearing officer shall develop the evidence. All issues relevant to the appeal shall be considered and addressed.

(1) Presentation of Evidence. The parties may present evidence that is material and relevant, as determined by the hearing officer. In conducting a hearing, the hearing officer shall actively develop the record on the relevant circumstances and facts to resolve all issues. To be considered as evidence in a decision, any document or physical evidence must be entered as an exhibit at the hearing. A party has the right to object to evidence offered at the hearing by the hearing officer or other parties.

(2) Evidence Generally. Evidence, including hearsay evidence, shall be admitted if it is relevant and if in the judgment of the hearing officer it is the kind of evidence on which reasonably prudent persons are accustomed to relying on in conducting their affairs. However, the hearing officer may exclude evidence if its probative value is outweighed by the danger of unfair prejudice, by confusion of the issues, or by reasonable concern for undue delay, waste of time, or needless presentation of cumulative evidence.

(3) Examination of Witnesses and Parties. The hearing officer shall examine parties and any witnesses under oath and shall allow cross-examination to the extent the hearing officer deems necessary to afford the parties due process.

(4) Additional Evidence. The hearing officer, with or without notice to any of the parties, may take additional evidence deemed necessary, provided that a party shall be given an opportunity to rebut the evidence if it is to be used against the party's interest.

(5) Appropriate Hearing Behavior. All parties shall conduct themselves in an appropriate manner. The hearing officer may expel any individual, including a party, who fails to correct behavior the hearing officer identifies as disruptive. After an expulsion, the hearing officer may proceed with the hearing and render a decision.

(b) Records.

(1) The hearing record shall include the audio recording of the proceeding and any other relevant evidence relied on by the hearing officer, including documents and other physical evidence entered as exhibits.

(2) The hearing record shall be maintained in accordance with federal or state law.

(3) Confidentiality of information contained in the hearing record shall be maintained in accordance with federal and state law.

(4) Upon request, a party has the right to obtain one copy of the hearing record, including recordings of the hearing and file documents at no charge.

§844.81.Postponement and Continuance.

(a) On the hearing officer's own motion, or for good cause, at a party's request, the hearing officer may postpone or continue a hearing.

(b) Requests for a continuance or postponement may be made informally by a party, either orally or in writing, to the hearing officer.

(c) The hearing officer shall use his or her best judgement to determine when to grant a continuance or postponement of a hearing to secure all necessary evidence and to be fair to the parties.

(d) The notice of the hearing must indicate the times and places at which the hearing may be continued unless waived by the parties.

§844.82.Default.

If a party to whom a notice of hearing provided under this chapter fails to appear for a hearing, the hearing officer may proceed in that party's absence on a default basis. If a final decision is issued, the factual allegations listed in the notice of hearing may be deemed admitted. If a party fails to appear at a hearing, the hearing officer will issue a notice of default to that party. A party may file a motion no later than 14 days after the notice of default is mailed to set aside a default announced at the hearing and to reopen the record. If a timely motion to set aside a default is filed, the hearing officer may grant the motion, set aside the default, and reopen the hearing for good cause shown, or in the interests of justice. The hearing officer may issue a decision denying the motion to set aside a default without a hearing if the motion fails to allege a reason for the party's failure to appear or if a party has failed to appear at three or more scheduled hearings.

§844.83.Timeliness.

(a) Parties shall promptly notify, in writing or during the recorded hearing, the Agency of any change of mailing address. Determinations and decisions shall be mailed to the new address.

(1) If a party properly designates a party representative, a determination or decision must be mailed to the designated party representative for it to become final.

(2) The Agency is responsible for making an address change only if the Agency is specifically directed by the party to mail subsequent correspondence to the new address.

(3) If the Agency addresses a document incorrectly, but the party receives the document, the time frame for filing an appeal shall begin as of the actual date of receipt by the party, whether or not the party receives the document within the appeal time frame. However, this does not apply if the party fails to provide a current address or provides an incorrect address.

(b) A determination or decision mailed to a party shall be presumed to have been delivered if the document was mailed as specified in subsection (a) of this section.

(1) A determination or decision shall not be presumed to have been delivered:

(A) if there is tangible evidence of nondelivery, such as being returned to the sender by the US Postal Service; or

(B) if credible and persuasive evidence is submitted to establish nondelivery or delayed delivery to the proper address.

(2) If a party provides the Agency with an incorrect mailing address, a mailing to that address shall be considered a proper mailing, even if there is proof that the party never received the document.

(1) the postmark date or the postal meter date (where there is only one or the other);

(2) the postmark date if there is both a postmark date and a postal meter date;

(3) the date the document was delivered to a common carrier, which is equivalent to the postmark date;

(4) three business days before receipt by the Agency, if the document was received in an envelope bearing no legible postmark, postal meter date, or date of delivery by a common carrier;

(5) the date of the document itself, if the document date is fewer than three days earlier than the date of receipt and if the document was received in an envelope bearing no legible postmark, postal meter date, or date of delivery by a common carrier;

(6) the date of the document itself, if the mailing envelope containing the complaint or appeal is lost after delivery to the Board or Agency. If the document is undated, the filing date shall be deemed to be three business days before receipt by the Board or Agency; or

(7) the date of receipt by the Agency if the document was filed online or by fax.

(d) Credible and persuasive testimony under oath, subject to cross-examination, may establish a filing date that is earlier than the dates established under subsection (c) of this section. A party shall be allowed to establish a filing date earlier than a postal meter date or the date of the document itself only upon a showing of extremely credible and persuasive evidence. Likewise, when a party alleges that a complaint or appeal has been filed that the Agency has never received, the party must present credible and persuasive evidence to support the allegation.

(e) A decision or preliminary determination order shall not be deemed final if a party shows that a representative of the Agency has given misleading information on appeal rights to the party. The party shall specifically establish:

(1) how the party was misled; or

(2) what misleading information the party was given, and, if possible, by whom the party was misled.

(f) Appeal and complaint deadlines are extended one working day following a deadline which falls on a weekend, an official state holiday, a state holiday for which minimal staffing is required or a federal holiday.

(g) There is no good cause exception to the timeliness rules.

§844.84.Withdrawal of an Appeal.

A party may request a withdrawal of its appeal at any time before the hearing officer's decision is issued. The hearing officer may grant the request for withdrawal in writing and issue an order of dismissal.

§844.85.Decision.

(a) The hearing officer shall issue a written decision as soon as possible after the hearing is finally closed.

(b) The Agency shall notify each party to a contested case of any decision of the hearing officer by mailing the decision to the parties or the parties designated representative if requested.

(c) The decision shall include findings of fact and conclusions of law separately stated and a list of the individuals who appeared at the hearing. Findings of fact, if set forth in statutory language, shall be accompanied by a concise and explicit statement of the underlying facts supporting the findings. Findings of fact shall be based exclusively on the evidence and on matters officially noticed and any issues the parties waived notice of. The hearing officer shall rule on any contested determinations issued as a result of the complaint.

(d) If the decision rules that the employer violated Texas Health and Safety Code, Chapter 81D or this chapter and if no remediation determination has been issued prior to the hearing, the hearing officer's decision shall indicate the amount of the administrative penalty, any applicable investigative costs, and inform the employer of the ability to avoid the administrative penalty by taking remedial action and submitting proof thereof.

(e) If no decision has ruled on remedial action and the employer intends to take remedial action in response to a decision issued under subsection (d) of this section, the employer must notify the hearing officer of their intent to remedy within 14 days of the decision being issued. Notice of intent to remedy must be filed in accordance with the instructions provided in the decision. Upon notification, the hearing officer's decision will be reopened for 30 days for the employer to provide proof of remedial action to the hearing officer.

(f) The hearing officer may hold an additional hearing to consider additional evidence of remediation. After consideration of any evidence of proof of remediation, the hearing officer shall issue a combined decision addressing all issues in front of the hearing officer resulting from the complaint.

§844.86.Finality of Decision.

The decision of the hearing officer becomes final 14 days after the date the decision is mailed unless before that date the hearing officer reopens the decision, a party files a timely appeal to the Commission, or the Commission by order removes to itself the proceedings pending before the hearing officer.

§844.87.Commission.

The duties of the Commission include reviewing the order of a hearing officer under this chapter. The member of the Commission who represents the public shall serve as chair when the Commission acts under this chapter.

§844.88.Removal of Order Pending Before a Hearing Officer.

(a) The Commission by order may remove to itself the proceedings pending before a hearing officer.

(b) The Commission promptly shall mail to the parties to the proceedings a notice of the order under subsection (a) of this section.

§844.89.Commission Review of Hearing Officer Order.

(a) The Commission may, on its own motion:

(1) affirm, modify, or set aside a decision issued under §844.85 of this subchapter on the basis of the evidence previously submitted in the case; or

(2) direct the taking of additional evidence.

(b) The Commission may permit the parties to initiate a further appeal before the Commission.

§844.90.Notice of Commission Action.

(a) The Commission shall mail to each party notice of:

(1) the Commission's decision;

(2) the violation;

(3) the amount of any penalty assessed;

(4) if applicable, the amount of any investigative costs; and

(5) the parties' right to file a motion for rehearing.

(b) The notice shall be mailed to the party's last known address, as shown by the Agency's records.

(c) The Commission shall enter a written penalty order for the payment of any penalty or investigative costs the Commission has assessed.

§844.91.Finality of Commission Order.

An order of the Commission becomes final 14 days after the date the order is mailed unless before that date:

(1) the Commission by order reopens the appeal; or

(2) a party files a written motion for rehearing.

§844.92.Judicial Review.

(a) If a final decision or order imposes an administrative penalty or the recovery of investigative costs, a party may obtain judicial review of the decision by filing a petition in a Travis County district court against the Agency on or after the date on which the decision or order is final, and not later than the 14th day after that date.

(b) Judicial review under this subchapter is by trial de novo based on the substantial evidence rule.

(c) A party may not obtain judicial review of the decision unless the party has exhausted the party's remedies as provided by this subchapter.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on September 18, 2024.

TRD-202404508

Les Trobman

General Counsel

Texas Workforce Commission

Earliest possible date of adoption: November 3, 2024

For further information, please call: (512) 850-8356