Heralded North Carolina Bill Targeting Worker Misclassification Dies in the House

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Heralded North Carolina Bill Targeting Worker Misclassification Dies in the House

October 2, 2015

By: Patrick Hollrah

On September 29, 2015, H.B. 482, which would have established the Employee Classification Division within the North Carolina Department of Revenue to target worker misclassification, died in the Committee on Rules, Calendar and Operations of the House.

By way of background, H.B. 482, which would have been known and cited as the “Employee Fair Classification Act,” was introduced on April 1, 2015, by four republican members of the House of Representatives. It was passed by the House of Representatives on August 13, 2015, by a vote of 90 to 15 and by the Senate with amendments on September 17, 2015, by a vote of 47 to 0. The bill received bipartisan support and was expected to be enacted by the Governor.

The bill would have had four main effects, namely it would have (i) established the Employee Classification Division to target worker misclassification, (ii) provided for a $1,000 penalty to be assessed for each instance of willful worker misclassification, (iii) permitted state licensing boards to discipline construction contractors who engaged in worker misclassification, and (iv) prohibited vendors who were found to have misclassified a worker from entering into government contracts. See our previous report on H.B. 482 for more information.

The Senate amendments to H.B. 482 may have prevented its enactment. It has been reported by North Carolina news outlets that the newspaper industry led the effort to prevent the enactment of H.B. 482 in response to the Senate adding a provision which would have specifically entitled individuals who deliver newspapers to receive unemployment compensation, and eliminated a provision from the workers’ compensation law which excluded individuals who deliver newspapers from being required to be eligible to receive workers’ compensation.

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