The Massachusetts Delivery Association (MDA) has succeeded in its appeal of a federal district court’s dismissal of its lawsuit to invalidate the Massachusetts Independent Contractor Law as an impermissible law “related to a price, route, or service of any motor carrier . . . with respect to the transportation of
State IC Laws and Selected Bills
California Joins Growing Number of States to Enact Independent Contractor Misclassification Legislation: State adds new, costly penalties for willful misclassification, but protects the right of businesses to continue to legitimately use independent contractors
California joins a growing list of states that have enacted independent contractor misclassification legislation in the past four years. This new law, signed by Governor Jerry Brown on October 9, 2011, adds harsh financial penalties for companies and persons who engage in “willful misclassification” of employees as independent contractors,…
Utah Legislators Seeking to Clamp Down on Creative Efforts to Avoid Labor Costs and Misclassification Liability
The Utah House approved on February 10, 2011 a bill (S.B. 35) targeting construction companies that classify individuals as owners in order to avoid paying for workers’ compensation insurance and unemployment insurance or withholding taxes. The bill, called the Construction Licensees Related Amendments, seeks to make ineffective a tool…
Pennsylvania Labor Department Issues Notices and Complaint Forms Under Construction Workplace Misclassification Act
The Pennsylvania Construction Workplace Misclassification Act was signed into law on October 13, 2010. Also called House Bill 400 and Act 72 of 2010, the new law went into effect on February 10, 2011.
Earlier this month, the Pennsylvania Department of Labor and Industry published three documents on its website…
Maine Governor Takes Positive Step to Clarify State Independent Contractor Laws
According to an article published in the Bangor Daily News on January 23, 2011, Maine Governor Paul LePage has abolished a task force created by his predecessor to examine independent contractor misclassification in Maine and instead has taken a step that Congress may also wish to consider: using the federal…
Update: New York’s Construction Industry Misclassification Law Takes Effect Today; Ends Lawful Use of Many Independent Contractors and Requires Posting of Government Notice
The New York Construction Industry Fair Play Act goes into effect today, as previously noted in a detailed posting on this site and in an article published in the New York Law Journal by a publisher of this blog. From this point forward in the construction industry, companies and their…
Pennsylvania Cracks Down on Independent Contractor Misclassification in the Construction Industry; Governor Signs Law that Imposes Strict Standards, Substantial Fines, and Criminal Penalties
On October 13, 2010, Pennsylvania Governor Ed Rendell signed into law the Construction Workplace Misclassification Act, joining a growing number of states that have targeted an industry where misclassification of employees as independent contractors is believed to be most prevalent.
The law, which takes effect in 120 days following enactment, creates a strict definition of “independent contractor.” No individual can be classified as an independent contractor unless he/she meets a three-part test where the individual:
(A) has a written contract to perform services with the construction industry business;
(B) is free from control or direction over the performance of such services under the contract and in fact; and
(C) is customarily engaged in an independently established trade, occupation, profession or business.
This type of three-part standard is commonly called an “ABC” test – but the Pennsylvania standard is less onerous than the “ABC” laws governing independent contractors in the construction industry in New Jersey and New York, for example. (Click “More” for link to “Steps to Ensure Compliance” below.)
Congressional Passage of Misclassification Legislation Is Likely to End the Flood of State Laws Governing Independent Contractors
In the absence of federal legislation addressing the issue of misclassification of employees as independent contractors, no less than 16 states have passed their own laws seeking to curtail misclassification of employees as independent contractors, including five states so far in 2010: Connecticut, Nebraska, New York, Vermont, and Wisconsin.
A Game-Changer for the Building and Construction Business: The New York Construction Industry Fair Play Act
New York has a new law seeking to curtail in the building and construction industry the practice of misclassifying employees as independent contractors (ICs). On August 27, 2010, Governor Paterson signed into law the New York Construction Industry Fair Play Act. The law, which goes into effect 60 days after enactment, only covers businesses in the construction industry.
The legislation resulted from findings by both the legislative and executive branches of government in New York that the practice of misclassifying employees as ICs and paying workers “off the books” was 50% more prevalent in the construction industry than in all other industries in New York.
A comprehensive review of the legislative background and an analysis of the law can be found in a published article by the publisher of this blog post in the New York Law Journal.
FedEx Ground Suffers a Setback in Illinois: Court Finds FedEx Misclassified Its Illinois Drivers as Independent Contractors
The first decision on the merits has been issued in the FedEx Ground class action “independent contractor” cases. . . . On May 28, 2010, Judge Robert L. Miller, Jr., the judge assigned to hear and decide all of these Fed Ex Ground cases, granted summary judgment in favor of the Illinois plaintiffs on their wage claims under the Illinois Wage Act. . . . The decision by Judge Miller is limited to the statutory claims under a single state’s wage law. He expressly noted in his decision that he was not deciding the common law claims brought by the Illinois plaintiffs. Nonetheless, this decision by Judge Miller is a partial setback for Fed Ex, which has experienced mixed results in the courts to date.…