To House Committee on Public Health, Welfare and Labor

Bill H.B. 1324

This bill provides, for purposes of unemployment compensation, an individual who performs services in the commercial or residential building construction industry for remuneration is an independent contractor only if:

(1) the individual has a written contract to perform the services;

(2) the individual is free from control or direction over performance of the services both under the contract of service and in fact; and

(3) as to the services, the individual is customarily engaged in an independently established trade, occupation, profession, or business.

(b) An individual is engaged customarily in an independently established trade, occupation, profession, or business with respect to services the individual performs in the commercial or residential building construction industry only if:

(1) the individual possesses the essential tools, equipment, and other assets necessary to perform the services independent of the person for whom the services are performed;

(2) the individual’s arrangement with the person for whom the services are performed is such that the individual will realize a profit or suffer a loss as a result of performing the services;
(3) the individual performs the services through a business in which the individual has a proprietary interest;

(4) the individual maintains a business location that is separate from the location of the person for whom the services are being performed;

(5) the individual:

(a) previously performed the same or similar services for another person under subdivision (b)(1)-(4) of this section and while free from direction or control over performance of the services, both under the contract of service and in fact; or

(b) holds himself or herself out to other persons as available and able and in fact is available and able to perform the same or similar services under subdivisions (b)(1)-(4) of this section while free from direction or control over performance of the services; and

(6) the individual maintains liability insurance during the term of the contract for at least fifty thousand dollars ($ 50,000).

This bill would also prohibit improper classification of employees in general with respect to unemployment compensation.  The bill authorizes civil penalties and criminal penalties for such misclassification and allows the Department of Labor to establish a toll-free hotline to receive allegations of misclassification.

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