Governor Enacts Misclassification Act

Bill H 647

Misclassification Act applicable to workers’ compensation, unemployment tax, public works projects, and the insurance code. Workers’ Compensation: Provides for penalties, stop work orders (with no stay pending appeal), and debarment from state projects both directly and indirectly; Insurance: Permits the Insurance Commissioner to penalize any person where the Commissioner finds they have not complied with the insurance code requirements; Public Works: Debars employers who have misclassified employees for a period of up to 3 years; Unemployment Tax: Makes misclassification a per se violation of the code with a $5,000 penalty per employee; Requires interagency cooperation and mandates an investigation by other agencies where department of labor indicates misclassification; Mandates creation of online employee misclassification reporting system where citizens may report suspected cases; Creates a misclassification task force and seeks to copy the Massachusetts model. Does not create a new definition of independent contractor.

Status as of June 30, 2010: Enacted (June 1, 2010)

Source: American Trucking Association

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