Bill H.B. 790
This bill would amend the labor laws of North Carolina to enact the Employee Fair Classification Act, which would prohibit worker misclassification, create penalties for misclassification and authorize individuals to bring civil actions for violations, and require those who engage independent contractors to post a notice at the work-site.
The bill lists the following as prohibited conduct.
- An employer shall not improperly classify an individual who performs work for remuneration provided by an employer as an independent contractor. An employer has improperly classified an individual when an employer-employee relationship exists, but the employer has not classified the individual as an employee.
- A person shall not incorporate or form, or assist in the incorporation or formation of, a corporation, partnership, limited liability corporation, or other entity, or pay or collect a fee for use of a foreign or domestic corporation, partnership, limited liability corporation, or other entity for the purpose, in whole or part, of facilitating, or evading detection of, a violation of this section.
- No person shall require or request an individual to enter into an agreement or sign a document that results in the misclassification of the individual as an independent contractor or otherwise does not accurately reflect the individual’s relationship with an employer.
- A person shall not knowingly conspire with, aid and abet, assist, advise, or facilitate an employer with the intent of violating the provisions of this article.
The bill also would prohibit retaliation against individuals who exercise their rights under the bill and deem each violation for each individual involved and for each day the violation continues as a separate offense.
The bill would provide that, in making a determination whether an individual is an employee or independent contractor, the court shall determine that an individual is an employee if the control exercised by the party paying remuneration to the individual is general in nature and is exercised directly or indirectly over the physical activities of the individual. According to the bill, it is not necessary for the amount of control to extend to all the details of the physical performance of the duties performed by an individual for an employer to consider the individual an employee of the employer.
According to the bill, if an employer engages an individual to perform services and that individual is not considered by the employer to be an employee, that employer shall post and keep posted, in a conspicuous place on each job site where that individual performs services and in each of the employer’s offices in the state, in English and Spanish, the following notices:
- Every individual working for a contractor has the right to be properly classified by the contractor as an employee rather than an independent contractor if the individual does not meet the requirements of an independent contractor under the law known as the Employee Fair Classification Act.
- If you believe you or someone else has not been properly classified as an employee or an independent contractor under the Employee Fair Classification Act, you have the right to challenge this classification by bringing an action in state civil district court.
