The Independent Contractor Monitor

[Reprinted with permission from Contractor Management Services, LLC]

Arizona

Arizona House Bill 2478 (HB 2478) proposes to amend the workers’ compensation statute to provide that a business that leases vehicles to drivers of taxis and livery vehicles is not the driver’s employer for purposes of the workers’ compensation statutes if (1) the business does not require the driver to perform work exclusively for the business, even though the driver may choose to work exclusively for the business, (2) the business does not pay the driver a salary, hourly rate or other financial remuneration, (3) obtains from the driver either a sole proprietorship waiver or an independent contractor agreement that meets the requirements of subsection D Arizona Revised statute 23-902. A business that complies with the proposed provisions of this bill is not liable for workers’ compensation coverage or the payment of premiums for the drivers. Drivers of taxis and livery vehicles receive payment directly from the passengers and are responsible for the lease payments to the business. Not expressly addressed is the impact, if any, of a driver paying the business a percentage of a fare the business dispatched to the driver.

Tennessee

House Bill3595 and Senate Bill 3717 will require all companies, prior to contracting with an independent contractor who will be issued an IRS Form 1099-Misc, to verify the independent contractor’s taxpayer identification number with the social security administration.

California

Assembly Bill No. 2186 was introduced on February 22, 2006, by Assembly Member Torrico. The current language of the bill merely states it is the “intent of the Legislature to prohibit the deliberate misclassification of employees as independent contractors . . . and to penalize intentional misclassification.” The bill does not specify what will be considered deliberate or intentional misclassification, or what penalties, if any, will be imposed beyond those currently being assessed by the California EDD and other agencies. If support can be garnered from state representatives favorable to the plight of the courier industry, this negative bill could be used as a vehicle to either adopt guidelines or require the EDD to adopt guidelines for the courier industry. Before the legislature penalizes such conduct, perhaps it can be convinced to establish guidelines by which a company can measure its utilization of independent contractors. Individual courier companies and local associations should consider taking an active stance to use this bill to try to establish guidelines.

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Through regular newsletters, CMS is taking the lead in making sure that everyone is aware of the issues, nationwide, regarding the use of independent contractors because with awareness comes the appropriate action. If you would like to receive these updates, please use the following link: http://www.icadvantage.com/Email.asp

Dennis P. Roccaforte
President - Contractor Management Services, LLC.

If you would like to speak to a CMS representative, call: 800-742-7508 or visit the CMS website at www.ICTheRightWay.com.