AN ACT relating to worker fairness in the construction industry.

Create new sections of KRS Chapter 337 to prohibit subcontractors from misclassifying employees on capital projects as independent contractors; define terms; establish criteria for classifying workers as employees or independent contractors; provide a complaint and appeal process for misclassification violations; provide that no prime contractor or subcontractor, nor any agent thereof shall retaliate against any person for taking action or providing information to investigators for violations; provide that a complaint shall be dismissed without prejudice if the Department of Workplace Standards fails to take action within 180 days after filing a complaint; provide that prime contractors or subcontractors shall post a notice for filing complaints or inquiries with the commissioner of the Department of Workplace standards; require each contract for a capital project shall require a prime contractor and any subcontractors to enroll and verify the work eligibility of all employees through the E-Verify program; require the department to promulgate administrative regulations; require the commissioner to provide any order or decision that a subcontractor has misclassified an employee as an independent contractor to the Department of Worker's Claims, the Department of Revenue, and the Office of Unemployment Insurance no later than 60 days after the order or decision; amend KRS 337.990 to establish penalties for violations; amend KRS 45A.145 to prohibit subcontractors or any corporate officer or shareholder that owns at least 10% of the outstanding stock of the corporation with 2 or more violations in 5 years from contracting with the state for 2 years; create new sections of KRS Chapters 341 and 342 and amend KRS 131.190 to require the Department of Revenue, the Office of Unemployment Insurance, and the Department of Workers' Claims to provide one another with any assessment or orders arising out of the misclassification of an employee; create a new section of KRS Chapter 337 to require the secretary of the Education and Labor Cabinet to develop a training program relating to employee misclassification; provide that Sections 1 to 8, 13, and 14 of this Act may be cited as the Kentucky Workers Fairness Act; EFFECTIVE, in part, January 1, 2027.