Bill H.B. 1064
This bill would define “employee” and “independent contractor” for the purposes of wages and medium of payment provisions of Maine labor laws in order to prevent misclassification of employees.
The bill defines an “employee” as an individual who is employed in this state by an employer, including an individual who is in receipt of or is entitled to any compensation for labor performed for an employer. “Employee” also includes a commission salesperson who takes orders from or performs services on behalf of a principal and who is paid on the basis of commissions, but does not include individuals who purchase for their own account for resale. “Employee” does not include an independent contractor.
The bill defines an “independent contractor” as an individual who:
a. Provides services free from direction and control over the means and manner of providing the services, subject only to the right of the person or entity for whom services are provided to specify the desired result, and furnishes the tools and equipment necessary to provide the services;
b. Operates a business that is considered inseparable from the individual for purposes of taxes, profits and liabilities
(1) in which the individual
(a) owns all of the assets and profits of the business; and
(b) has sole, unlimited personal liability for all of the debts and liabilities of the business, unless the business is organized as a corporate entity to which sole, unlimited personal liability does not apply; and
(2) for which:
(a) the individual does not pay taxes separately but reports business income and losses on the individual’s personal tax return; and
(b) if the business is organized as a corporate entity and the individual otherwise qualifies as an independent contractor under this subsection, the individual files a separate federal informational tax return as required by law; and
c. Exercises complete control over the management and operations of the business under paragraph b and exercises the right and opportunity on a continuing basis to perform the services of the business for multiple entities at the individual’s sole choice and discretion.
