SB 929 Bars employers from misclassifying employees as independent contractors
Sponsor: Green Co-Sponsor(s)
LR Number: 3452S.05C Fiscal Note: 3452-05
Committee: Small Business, Insurance & Industrial Relations
Last Action: 5/16/2008 - S Informal Calendar S Bills for Perfection--SB 929-Green and Callahan, with SCS Journal Page:
Title: SCS SB 929 Calendar Position:
Effective Date: Emergency Clause

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Current Bill Summary


SCS/SB 929 - This act bars employers with 5 or more employees from knowingly misclassifying employees. Employers must submit federal IRS 1099-MISC forms to the Department of Revenue and penalties for failing to do so are provided. The Attorney General has the power to investigate alleged misclassifications and enforce the section. A process is established by which the Department of Labor may receive complaints and forward them to the Attorney General if they decide the complaint has merit.

The state carries the burden of proving that the employer misclassified the worker and there is a rebuttable presumption that an unauthorized alien is an employee under the act and shall be treated so if the employer cannot produce an I-9 form verifying the legal status of the worker or other forms verifying the individual is an independent contractor. Injunctions may be sought and employers shall be charged $50 per day per misclassified worker up to a maximum of $50,000 for violations. Penalties are increased for repeat offenders in an amount of $100 per day per misclassified worker up to $100,000.

The act provides penalties for employers who fail to provide workers' compensation insurers access to records.

Employers shall be liable for a total premium for the policy equal to 3 times the insurer's then-current estimate of the annual premium on the expiration of the policy and costs for the audit when the employer denies access.

Insurers shall notify employers of the audit, duty to provide access, and subsequent increases in premiums due to their denial of access.

This act contains an emergency clause.

This act is similar to SB 928 (2006), SB 424 (2007), and SB 178 (2007).

CHRIS HOGERTY