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Published on Friday, February 1, 2013

Classifications of independent contractors causes concern for cities

On January 31, the House Labor and Workforce Development Committee heard HB 1440, which addresses wage issues and classification of independent contractors. This language addresses the procedure for classifying workers as independent contractors and establishes a criminal, regulatory, and civil penalty framework for incorrect classification.

Most of the examples presented in the hearing involved private employers; however, the bill can have great impact on local governments. AWC is opposing this bill over concerns about the classification definitions. An “entity” in this bill could mean legal or engineering firms that cities often contract with. If this is the case, cities could become liable for wages and benefits for a substantial number of people.

This is not a new topic and has been before the Legislature in the past. There are challenges in cases where some employees are not receiving fair wages, but the solution presented in this bill creates concern for potentially burdening local governments. AWC opposed this bill at the hearing.

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