By: Matt Musgrave, AGC/VT Government Affairs Director
A major focus of your lobbying team last year was bill S.108 “An act relating to employee misclassification”. The purpose of the bill is to enhance Vermonts enforcement of misclassified independent contractors who should be employees with the employer paying into workers comp, unemployment insurance and providing other employee benefits. Multiple organized labor advocates raised the issue citing abuses that hurt the worker comp fund, unemployment fund and abuse workers.
Currently issues of misclassification are investigated and enforced by the Department of Labor. The department under statute is unable to release specific information about most investigations and some believe it is evidence of noncompliance by employers. S.108 would create a separate enforcement regime through the Attorney Generals office that could also begin an investigation upon receipt of a complaint from anyone including the aggrieved contractor or 3rd party.
AGC/VT has taken a position to oppose the bill due to the nature of enforcement. As originally written, anyone could file a complaint with Department of Labor and with the Attorney Generals office. Both offices would initiate parallel investigations which could produce different results and has the possibility of forcing dual penalties on the employer. AGC/VT believes this could lead to unnecessary harm to our members and potentially be used in a competitive nature by people bidding on jobs.
Advocates supporting the measure cite construction, transportation companies like Uber, and technology firms as major violators of the states classification policy. Through research AGC/VT has found that there does not seem to be many examples of flagrant violations and that some landmark Supreme Court of Vermont rulings suggest that there is some confusion as to what is the definition of independent contractor or employee. The Department of Labor is currently working with the administrative and legislative rules committees to clarify rules so there is no longer confusion.
According to the Department of Labor most cases involve companies that had made a mistake but are not repeat offenders and not a systematic problem. AGC/VT has been working hard to either pass a bill that does not include a dual regime enforcement situation or to oppose the bill completely.
The bill did not make it to the floor of the House for a vote in 2019 but will likely resurface in 2020. AGC/VT will continue its efforts to work on the bill but either way we are urging our members to look at the relationships they have, to determine whether they’re in compliance with the law. We are advising our members to consult with their human resources staff, seek advice from the Department of Labor and inventory their staff to make sure they are in compliance.
Resource: Vermont Department of Labor
If there is anything you would like to obtain more information about please contact Matt Musgrave, Matt@agcvt.org or (802) 223-2374.