Missouri H.B. 1642
Status: Passed House; Reported to Senate and First Read, March 31, 2014
The bill would add two new sections to the Missouri statute.
First Proposed New Section:
Proposed new section 285.080 would be added to:
TITLE 18. LABOR AND INDUSTRIAL RELATIONS
Chapter 285. EMPLOYERS AND EMPLOYEES GENERALLY
The proposed new section would provide as follows:
- Require the Missouri Department of Labor and Industrial Relations (the “Department”) to issue a regulation, in accordance with the state’s administrative procedures act, with an opportunity for public comment, providing (i) a clear and concise definition of “independent contractor,” and (ii) a procedure the Department must follow to reclassify an individual from an independent contractor to an employee.
- Until this regulation is issued, all pending investigations of employee reclassification not finalized by a Missouri court shall cease and be enjoined immediately and permanently. Employers shall be given 180 days to comply with the new definition.
- Create a presumption for purposes of Missouri workers’ compensation, unemployment and state income tax withholding that the following shall be presumed to be independent contractors:
- An LLC or corporation;
- An individual (i) who is licensed, (ii) who provides services to multiple customers and (iii) whose services are not the same as the services provided by a customer;
- A licensed attorney.
- Permit a worker or a company to request a worker-status determination from the Department (presumably similar to the IRS’s Form SS-8 process); and protect a company against penalties if it classifies a worker as an independent contractor in reliance on such a determination .
- If the Department conducts an audit and concludes that an individual should be reclassified as an employee, the employer shall be given 60 days to comply with the finding and, in the absence of fraud, shall not be liable for any assessment of employee tax, interest, or fines for the misclassification; and if the employer appeals the finding, any applicable assessments and interest shall be tolled while the appeal is pending, in the absence of fraud.
Second Proposed New Section:
Proposed new section 285.517 would be added to:
TITLE 18. LABOR AND INDUSTRIAL RELATIONS
Chapter 285. EMPLOYERS AND EMPLOYEES GENERALLY
MISCLASSIFICATION OF WORKERS
The proposed new section would provide as follows:
In the case of any taxpayer being audited by the Department regarding worker classification, any protection under Section 530 of the Revenue Act of 1978 the taxpayer has been granted for an individual shall be binding for purposes of Missouri employment taxes.
