What's New

Zack Hutchins
Director of Communications

July 22, 1999 

Task Force proposes a solution to the independent contractor situation

The state's Task Force on Independent Contractors has recommended creation of three new panels through which business, labor and state agencies would work to determine when a worker is an independent contractors as opposed to an employee.

In a report to the Governor earlier this month, the task force recommended creation of a state Commission on Independent Contractors, a labor-management council and a certification board.

The commission would approve industry-specific guidelines and oversee a process which would certify a worker or a job as being either an employee or independent contractor relationship. The state Departments of Labor and Taxation and Finance, along with the Workers' Compensation Board, would be represented.

The labor-management council would draft industry- or occupation-specific guidelines to classify workers. The guidelines would be subject to approval by the Commission on Independent Contractors.

Approved guidelines would be regulations and would be binding on state agencies involved.

The certification board would certify for businesses and workers that a specific relationship is that of either an employee or an independent contractor. The board also would issue advisory opinions.

The Commission on Independent Contractors would oversee this board, which would be staffed by the state Departments of Labor and Taxation and Finance, as well as the Workers' Compensation Board.

"Both employers and workers could know with certainty the precise nature of their relationship and that's good for both," Business Council President Daniel B. Walsh said of the report.

"Our members have wanted clarification of the current mishmash of rules distinguishing employees from independent contractors, and these recommendations would do just that."

How a worker is classified has many ramifications, including eligibility for unemployment insurance, workers' compensation and disability insurance. There is no single statute, code, or rule which specifies the factors that determine the nature of the working relationship.

For many years, the Department of Taxation and Finance, the Department of Labor, and the Workers' Compensation Board have addressed this question, often reaching different conclusions.

The task force was created to resolve the issue. It included representatives of The Business Council, organized labor, the state Department of Labor, the state Department of Taxation and Finance, the Governor's Office of Regulatory Reform, the state Insurance Fund, and the state Workers' Compensation Board.