This is reproduced from the MCAA Government Affairs Update. http://www.mcaa.com
GOVERNMENT AFFAIRS NEWS
Massachusetts IC Bill Introduced
The Tewksbury Advocate news outlet reports that Massachusetts State Senator Michael Rodrigues (D – Westport) recently introduced legislation aimed at stimulating the economy and increasing job growth in Massachusetts. The bill proposes corrections to the Massachusetts Independent Contractor Law which we all know has suffered from unintended negative consequences over the last few years. The bill titled “An Act Encouraging a Better Business Climate and Job Creation in the Commonwealth” also contains a package of incentives to help kick-start job creation. Massachusetts State Senator Barry Finegold (D – Andover) has signed on as lead cosponsor. The bill text has yet to be made available on the Massachusetts Legislature website but MCAA is working to obtain a copy. Similar legislation was introduced in Massachusetts last year, but did not pass.
Iowa Steps Up Enforcement Efforts
On January 30, the Omaha World-Herald News reported that Iowa is aggressively cracking down on businesses it perceives as misclassifying workers as independent contractors. A special investigative unit established by former Iowa Governor Chet Culver has collected $2.1 million in unpaid taxes, penalties and interest in its first 18 months and has identified nearly five times more misclassified workers than neighboring Nebraska. “We have beefed up our enforcement, maybe not as programmatic as Iowa by creating a special unit, but it’s certainly on our radar. And it has been for a long time,” said Cathy Lang, director of the Nebraska Department of Labor. From October 2009 through September 2010, efforts in Nebraska identified 551 misclassified workers and recovered $25,000 in taxes. Both states find that misclassification is most prevalent in the construction trades, such as drywall, framing and masonry workers, as well as among cleaning crews and truck drivers.
MCAA Government Affairs Lobby Day
Your participation in the upcoming MCAA Government Affairs Lobby Day is absolutely critical! Whether you have attended every prior event or never have been to Washington before, there is no better time to help the courier industry than on March 3, 2011.
Why is this year’s Government Affairs Lobby Day so important? MCAA is in the process of developing federal legislation to protect the Section 530 safe harbor and establish clear criteria which will be used to determine independent contractor status. MCAA has been drafting the legislation over the last several months and are in the early stages of sharing our bill with friendly members of Congress. This is a major proactive step on behalf of the courier industry and we need your help on March 3rd to tell your elected officials why this legislation is needed.
An opening reception will be held on March 2nd at 7:00 – 9:00pm at the Omni Shoreham Hotel. The breakfast and educational sessions will begin the following morning around 7:30am. For travel purposes, the Capitol Hill meetings will conclude around 4:00pm on March 3rd.
We have secured a special room rate of $229/night at the Omni Shoreham Hotel in Washington, DC. Please call 1-800-THE-OMNI and reference MCAA Lobby Day.
NEW STATE LEGISLATION
New Hampshire House Bill 420 (NEW)
Sponsored by Representative William Infantine (R – Majority)
This legislation requires the Commissioner of Labor to establish a voluntary registration procedure for independent contractors under the workers compensation law. The registration form will include explanations of the consequences and possible penalties of misrepresenting their employment status. An independent contractor who registers will not be eligible for benefits if they incur an injury or illness. Status: On January 21, the bill was introduced and referred to the House Committee on Labor, Industrial, and Rehabilitative Services.
Washington State House Bill 1701 (NEW)
Sponsored by Representative Timm Ormsby (D – Majority)
This legislation pertains to the misclassification of independent contractors in the construction industry. An independent contractor is found to be in violation if he/she engages three or more subcontractors to all work on the same task at a single job site. An independent contractor has the burden of proof to show that all subcontractors are not working on the same tasks at a single job site. Status: On January 31, the bill was introduced and referred to the House Committee on Labor and Workforce Development.
Washington State Senate Bill 5599 (NEW)
Sponsored by Senator Jeanne Kohl-Welles (D – Majority)
This legislation pertains to the misclassification of independent contractors in the construction industry. An independent contractor is found to be in violation if he/she engages three or more subcontractors to all work on the same task at a single job site. An independent contractor has the burden of proof to show that all subcontractors are not working on the same tasks at a single job site. Status: On January 31, the bill was introduced and referred to the Senate Committee on Labor, Commerce, and Consumer Protection.
UPDATED STATE LEGISLATION
Florida House Bill 311 (UPDATED)
Sponsored by Representative Ken Roberson (R – Majority)
This legislation provides a definition for an independent contractor for local business tax purposes. In this proposed legislation, an independent contractor must meet at least four of the following criteria: (1) maintains a separate business, (2) holds or has applied for a federal employer identification number (unless the individual is a sole proprietor), (3) receives compensation for services rendered and such compensation is paid to a business rather than an individual, (4) holds at least one bank account in the same of the business entity, (5) is able to perform work for any entity, or (6) receives compensation for services rendered on a competitive bid basis or completion of a task as defined by a contractual agreement. If four of the criteria are no met, an individual may still be presumed to be an independent contractor if the following are met: (1) The independent contractor controls the means of performing the services, (2) the independent contractor incurs the principal expenses, (3) the independent contractor is responsible for the satisfactory completion of the work, (4) the independent contractor receives compensation for work performed, (5) the independent contractor may realize a profit or suffer a loss, (6) the independent contractor has continuing business liabilities, and (7) the success or failure of the independent contractor’s business depends on the relationship of business receipts to expenditures. Status: On February 1, the bill was referred to the House Economic Affairs Committee and Finance & Tax Committee.
Utah Senate Bill 11 Substitute (UPDATED)
Sponsored by Senator Karen Mayne (D – Minority)
This legislation creates the Worker Classification Coordinated Enforcement Council within the Labor Commission. The council will coordinate regulatory and law enforcement efforts related to misclassification. Status: On January 24, the bill was introduced and referred to the Senate Committee on Business and Labor. By a 5-3 vote, the committee gave the bill a favorable recommendation. On January 26, the bill was passed 25-4 by the full Senate. On January 31, the bill was sent to the House and referred to the Committee on Business and Labor.
OTHER STATE LEGISLATION
Connecticut Senate Bill 678
Sponsored by Senator Anthony Musto (D – Majority)
This legislation aims to provide more clarity by amending the definition of an independent contractor to exclude any individual that is paid hourly, whose tools are provided by the person paying the worker, or who otherwise acts at the specific direction of the payor. Status: On January 24, the bill was introduced and referred to the Joint Committee on Labor and Public Employees.
Florida Senate Bill 582
Sponsored by Senator Nancy Detert (R – Majority)
This legislation provides a definition for an independent contractor for local business tax purposes. In this proposed legislation, an independent contractor must meet at least four of the following criteria: (1) maintains a separate business, (2) holds or has applied for a federal employer identification number (unless the individual is a sole proprietor), (3) receives compensation for services rendered and such compensation is paid to a business rather than an individual, (4) holds at least one bank account in the same of the business entity, (5) is able to perform work for any entity, or (6) receives compensation for services rendered on a competitive bid basis or completion of a task as defined by a contractual agreement. If four of the criteria are no met, an individual may still be presumed to be an independent contractor if the following are met: (1) The independent contractor controls the means of performing the services, (2) the independent contractor incurs the principal expenses, (3) the independent contractor is responsible for the satisfactory completion of the work, (4) the independent contractor receives compensation for work performed, (5) the independent contractor may realize a profit or suffer a loss, (6) the independent contractor has continuing business liabilities, and (7) the success or failure of the independent contractor’s business depends on the relationship of business receipts to expenditures. Status: On January 25, the bill was filed in the Senate.
Indiana Senate Bill 164
Sponsored by Senator Frank Mrvan, Jr. (D – Minority)
This legislation states that an employee who intentionally makes false statements to the Department of State Revenue concerning independent contractor status commits a Class D felony. An employer shall not classify an employee as an independent contractor for the sole purpose of avoiding the workers’ compensation and unemployment compensation laws. Status: On January 5, the bill was introduced and referred to the Senate Committee on Pensions and Labor.
Montana House Bill 84
Sponsored by Representative Carlie Boland (D – Minority)
This legislation provides that the definition of an employee does not include an independent contractor with respect to general obligations of employers. Status: On December 20, the bill was introduced and referred to the House Committee on Business and Labor. On January 21, the bill was passed 21-0 out of the House Committee on Business and Labor. On January 25, the bill was passed 80-20 by the full House.
New York Assembly Bill 2274
Sponsored by Assemblyman Bob Reilly (D – Majority)
This legislation amends the workers compensation law by stating that an independent contractor cannot be classified as an employee during orientation or initial training. Status: On January 14, the bill was introduced and referred to the Assembly Committee on Labor.
New York Senate Bill 630
Sponsored by Senator Daniel Squadron (D – Minority)
This legislation pertains to the payment of independent contractors. The independent contractor shall be paid the compensation earned in accordance with agreed work terms. The agreed work terms shall be reduced in writing, signed by both the client and the independent contractor, and made available to the Commissioner upon request. The writing shall include a description of how compensation earned and payable shall be calculated. A client who is found by the Commissioner to be in violation will be subjected to various civil penalties.
Status: On January 5, the bill was introduced and referred to the Senate Committee on Labor.
Oregon House Bill 2313
Sponsored by Representative Chris Harker (D – Even Party Split)
This legislation instructs the Bureau of Labor and Industries to study the development of an independent contractor definition for purposes of adopting by rule a determination of independent contractor status. Status: On January 21, the bill was introduced and referred to the House Committee on Business and Labor.
Oregon House Bill 2469
This legislation establishes a review processes for the Departments of Revenue and Employment based on finding that workers are employees and not independent contractors. The legislation requires the Interagency Compliance Network to work together to share information and increase compliance efforts. Several of the agencies within this network include the Departments of Revenue and Employment, as well as the Bureau of Labor and Industries. Status: On January 21, the bill was introduced and referred to the House Committee on Business and Labor.
Virginia Senate Joint Resolution 345
Sponsored by Senator Phillip Puckett (D – Majority)
This legislation instructs the Department of Labor and Industry to study the misclassification of employees as independent contractors. The study will review the status of employee misclassification and the consequences to the workforce, determine the amount of lost revenue to the state government, and determine strategies for improving improper classification of employees. Status: On January 21, the joint resolution was introduced and referred to the Senate Committee on Rules.
If you notice any one piece of legislation in your area that needs special attention or if you are aware of any local action being taken on specific legislation, please contact MCAA Government Affairs Director John Ferraro at 202-207-1121 or jferraro@mcaa.com. This way we can ensure a well-coordinated effort on behalf of the courier industry. We hope you enjoy this service, please feel free to contact me if you have any questions, comments, or suggestions.
John Ferraro
Director, Government Affairs
Messenger Courier Association of America (MCAA)
750 National Press Building
529 Fourteenth Street, NW
Washington, D.C. 20045
Office: 202-207-1121
Cell: 703-656-6171
www.mcaa.com