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BILL AS INTRODUCED 2007-2008

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H.568

Introduced by   Representative Marcotte of Coventry

Referred to Committee on

Date:

Subject:  Labor; workers' compensation and unemployment insurance

Statement of purpose:  This bill proposes to alter language in Title 21 modifying the treatment of independent contractors in the field of workers' compensation and unemployment insurance.

AN ACT RELATING TO THE TREATMENT OF INDEPENDENT CONTRACTORS IN THE FIELD OF WORKERS' COMPENSATION AND UNEMPLOYMENT INSURANCE

It is hereby enacted by the General Assembly of the State of Vermont:

Sec. 1.  21 V.S.A. § 601(3) is amended to read:

(3)  "Employer" includes any body of persons, corporate or unincorporated, public or private, and the legal representative of a deceased employer, and includes the owner or lessee of premises or other person who is virtually the proprietor or operator of the business there carried on, but who, by reason of there being an independent contractor or for any other reason, is not the direct employer of the workers there employed.  If the employer is insured, "employer" includes the employer's insurer so far as applicable.  A For the purposes of this chapter a person is not deemed to be an "employer" for the purposes of this chapter as the result of entering into a written contract for services or labor with an individual who has knowingly and voluntarily waived coverage of this chapter pursuant to subdivision (14)(F) of this section who is an independent contractor, as defined in subdivision (14)(I) of this section, but shall be deemed the employer of any of the independent contractor's employees if the independent contractor has failed to obtain and maintain workers' compensation insurance.

Sec. 2.  21 V.S.A. § 601(14) is amended to read:

(14)  "Worker" and "employee" means an individual who has entered into the employment of, or works under contract of service or apprenticeship with, an employer.  Any reference to a worker who has died as the result of a work injury shall include a reference to the worker's dependents, and any reference to a worker who is a minor or incompetent shall include a reference to the minor's committee, guardian, or next friend.  The term "worker" or "employee" does not include:

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(F)  The sole proprietor or partner owner or partner owners of an unincorporated business provided:, unless the sole proprietor or partner notifies the commissioner of his or her wish to be included within the provisions of this chapter; the submission of a contract or an amendment to a contract to elect coverage of the sole proprietor or partner shall be considered sufficient notice.  If a sole proprietor or partnership has employees, workers' compensation insurance shall be provided for the employees.

(i)  The individual performs work that is distinct and separate from that of the person with whom the individual contracts.

(ii)  The individual controls the means and manner of the work performed.

(iii)  The individual holds him or herself out as in business for him or herself.

(iv)  The individual holds him or herself out for work for the general public and does not perform work exclusively for or with another person.

(v)  The individual is not treated as an employee for purposes of income or employment taxation with regard to the work performed.

(vi)  The services are performed pursuant to a written agreement or contract between the individual and another person, and the written agreement or contract explicitly states that the individual is not considered to be an employee under this chapter, is working independently, has no employees, and has not contracted with other independent contractors.  The written contract or agreement shall also include information regarding the right of the individual to purchase workers' compensation insurance coverage and the individual's election not to purchase that coverage.  However, if the individual who is party to the agreement or contract under this subdivision is found to have employees, those employees may file a claim for benefits under this chapter against wither or both parties to the agreement.

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(I)  An independent contractor if the employer can demonstrate the independent contractor meets all of the following conditions:

(i)  Maintains a separate business with his or her own office, equipment, materials, or other facilities and has continuing recurring business liabilities or obligations.

(ii)  Holds or has applied for a federal employer identification number with the federal Internal Revenue Service or has filed business or self‑employment income tax returns with the federal Internal Revenue Service based on that work or service in the previous year.

(iii)  Operates under a written contract which specifies the independent contractor:

(I)  Will perform specific services or work for specific amounts of money and under which the independent contractor controls the means of performing the services or work.

(II)  Incurs the main expenses related to the service or work that he or she performs under contract.

(III)  Is responsible for the satisfactory completion of work or services that he or she contracts to perform and is liable for a failure to complete the work or service.

(IV)  Receives compensation for work or service performed under a written contract on a commission or per-job competitive bid basis and not on any other basis.

(V)  May realize a profit or suffer a loss under contracts to perform work or service.

(iv)  Voluntarily elected the status of independent contractor.  Coercing an individual to sign a statement of independent contractor status or obtain other documents of such status is false representation and subject to the penalties found in 21 V.S.A. § 708.

Sec. 3.  21 V.S.A. § 1301(6)(B) is amended to read:

(B)  Services performed by an individual for wages shall be deemed to be employment subject to this chapter unless and until it is shown to the satisfaction of the commissioner that: they are specifically excluded under this chapter.

(i)  Such individual has been and will continue to be free from control or direction over the performance of such services, both under his contract of service and in fact; and

(ii)  Such service is either outside the usual course of the business for which such service is performed, or that such service is performed outside of all the places of business of the enterprise for which such service is performed; and

(iii)  Such individual is customarily engaged in an independently established trade, occupation, profession, or business.

Sec. 4.  21 V.S.A. § 1301(6)(C)(xxii) is added to read:

(C)  The term "employment" shall not include:

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(xxii)  Service performed by an independent contractor if the employer can demonstrate the independent contractor meets all of the following conditions:

(I)  Maintains a separate business with his or her own office, equipment, materials, or other facilities and has continuing or recurring liabilities or obligations.

(II)  Holds or has applied for a federal employer identification number with the federal Internal Revenue Service or has filed business or self‑employment income tax returns with the federal Internal Revenue Service based on that work or service in the previous year.

(III)  Operates under a written contract which specifies the independent contractor:

(aa)  Will perform specific services or work for specific amounts of money and under which the independent contractor controls the means of performing the services or work.

(bb)  Incurs the main expenses related to the service or work that he or she performs under contract.

(cc)  Is responsible for the satisfactory completion of work or services that he or she contracts to perform and is liable for a failure to complete the work or service.

(dd)  Receives compensation for work or service performed under a written contract on a commission or per-job competitive bid basis and not on any other basis.

(ee)  May realize a profit or suffer a loss under contracts to perform work or service.

(IV)  Voluntarily elected the status of independent contractor.  Coercing an individual to sign a statement of independent contractor status or obtain other documents of such status is false representation and subject to the penalties found in 21 V.S.A. § 1369.

Sec. 5.  21 V.S.A. § 1369 is amended to read:

§ 1369.  False statements to avoid chapter

     A person shall not wilfully and intentionally make a false statement or representation to avoid becoming or remaining subject to this chapter, or to avoid or reduce a contribution or other payment required of an employer under this chapter  A person who willfully makes a false statement or representation to avoid becoming or remaining subject to this chapter or to avoid or reduce a contribution or other payment required of an employer under this chapter for either her- or himself or for any other person, after notice and opportunity for hearing may be assessed an administrative penalty of not more than $5,000.00 total, as determined to be appropriate by the commissioner after a determination by the commissioner that the person has willfully made a false statement or representation of a material fact.



Published by:

The Vermont General Assembly
115 State Street
Montpelier, Vermont


www.leg.state.vt.us