Oklahoma Bill Would Adopt a Common-Law Test to Define ‘Employee’ for Unemployment Purposes

The Coalition to Promote Independent Entrepreneurs applauds Oklahoma State Representative Mike Osburn (R-81) for pre-filing the Empower Independent Contractors Act of 2019, H.B. 1095. This bill would replace the flawed “ABC” test currently used in Oklahoma to determine an individual’s status, as an employee or independent contractor, for purposes of state unemployment with a “common-law” test. The new test would be effective January 1, 2020.

H.R. 1095 represents a substantial step toward harmonizing the definition of “employee” for purposes of state unemployment statutes, as approximately 20 other states currently apply a “common law” test to determine an individual’s status for unemployment purposes. The common-law test also is the predominant test for purposes of federal statutes.

A harmonized definition of “employee” would provide much-needed consistency and certainty for independent entrepreneurs and their clients that operate on a multi-state basis. The resulting consistency and certainty would reduce the burden on such companies that seek to do business with independent entrepreneurs, which likely would lead to increased opportunities for the self-employed.  Studies show this would increase our nation’s economic growth and prosperity. See, e.g., Jeffrey A. Eisenach, in The Role of Independent Contractors in the U.S. Economy, at ii (December 2010), Navigant Economics. (A copy is available here.)

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If you would like to discuss this development or become engaged in supporting the bill, please contact us at info@iecoalition.org.