Alaska’s Worker’s comp law overdue for overhaul



From the Anchorage Daily News,  Heidi Drygas, Commissioner of the Alaska Department of Labor and Workforce Development, supports House Bill 79 which amends the workers compensation statutes and includes a definition of independent contractor.  Heidi writes:

House Bill 79 also provides important legal clarity about the definition of an “independent contractor.” For decades, the distinction between “employees” and “independent contractors” has been decided by the Workers’ Compensation Board and by the court system, based on complicated multifactor tests. House Bill 79 provides businesses and employees much-needed guidance about the definition of an independent contractor. Alaska has many bona fide independent contractors, and they play an important role in Alaska’s workforce. However, the practice of misclassifying employees as independent contractors in an effort to evade workers’ compensation costs should be discouraged through clear laws because it leaves workers exposed to on-the-job injuries without medical treatment and exposes businesses to financial devastation from responsibility for uninsured injuries. Finally, defining independent contractor status and reducing misclassification will contribute to lower workers’ compensation premiums, saving money for Alaska businesses.

Read the full story at Worker’s comp law overdue for overhaul

House Bill 79 provides:

(11)  a person employed as an independent contractor; a person is                                   
09       an independent contractor for the purposes of this chapter only if the person                                 
10                      (A)  has an express contract to perform the services;                                          
11 (B)  is free from direction and control over the means and                                                          
12 manner of providing services, subject only to the right of the individual                                           
13 for whom, or entity for which, the services are provided to specify the                                             
14 desired results, completion schedule, or range of work hours, or to                                                 
15 monitor the work for compliance with contract plans and specifications,                                             
16            or federal, state, or municipal law;                                                                     
17 (C)  incurs most of the expenses for tools, labor, and other                                                        
18 operational costs necessary to perform the services, except that materials                                          
19            and equipment may be supplied;                                                                           
20 (D)  has an opportunity for profit and loss as a result of the                                                      
21            services performed for the other individual or entity;                                                   
22 (E)  is free to hire and fire employees to help perform the                                                         
23            services for the contracted work;                                                                        
24 (F)  has all business, trade, or professional licenses required                                                     
25 by federal, state, or municipal authorities for a business or individual                                            
26            engaging in the same type of services as the person;                                                     
27 (G)  follows federal Internal Revenue Service requirements                                                          
28            by                                                                                                       
29 (i)  obtaining an employer identification number, if                                                                
30                 required;                                                                                           
31 (ii)  filing business or self-employment tax returns for                                                            
01                 the previous tax year to report profit or income earned for the                                     
02                 same type of services provided under the contract; or                                               
03 (iii)  intending to file business or self-employment tax                                                            
04 returns for the current tax year to report profit or income earned                                                  
05 for the same type of services provided under the contract if the                                                    
06                 person's business was not operating in the previous tax year; and                                   
07                      (H)  meets at least two of the following criteria:                                             
08                           (i)  the person is responsible for the satisfactory                                       
09                 completion of services that the person has contracted to perform                                    
10 and is subject to liability for a failure to complete the contracted                                                
11 work, or maintains liability insurance or other insurance policies                                                  
12 necessary to protect the employees, financial interests, and                                                        
13                 customers of the person's business;                                                                 
14 (ii)  the person maintains a business location or a                                                                 
15 business mailing address separate from the location of the                                                          
16 individual for whom, or the entity for which, the services are                                                      
17                 performed;                                                                                          
18 (iii)  the person provides contracted services for two                                                              
19 or more different customers within a 12-month period or engages                                                     
20 in any kind of business advertising, solicitation, or other marketing                                               
21 efforts reasonably calculated to obtain new contracts to provide                                                    
22                 similar services.


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