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Obama's IC Bill Still In Committee

March, 24 2008 by mbopartners

Senator Obama's Senate bill confronting independent contractor classification is currently in the Senate Finance Committee. In case you haven't been tracking this issue, the bill was introduced last September and would allow the U.S. Treasury to wield a whole lot more power than it currently does. In one sense it would 'take the muzzle off' the dogs of enforcement. In addition, the bill will also eliminate the "everybody's doing it" defense of industry practice as a justification for worker misclassification.

If the bill becomes law, it would dramatically shift the landscape of contractor classification. Industries known to habitually misclassify workers would be fair game for investigation, and information for workers about proper classification would be added to the Department of Labor's workplace signage to help make sure every worker understands their labor rights.

We're particularly interested in this bill because of the timing of the presidential race. Obama is the sponsor and Senator Hillary Clinton is a co-sponsor, which means one way or another, the Democratic party is going to be interested in the bill's success. We'll keep you posted here on our blog as the issue progresses, or you can keep tabs on this bill using GovTrack:

http://www.govtrack.us/congress/bill.xpd?bill=s110-2044

Interested in the fine print? Download the full text of Obama's S. 2044.

Official summary of Obama's IC bill:

Independent Contractor Proper Classification Act of 2007 - Amends the Revenue Act of 1978 to: (1) require employers to treat workers misclassified as independent contractors as employees for employment tax purposes upon a determination of misclassification by the Secretary of the Treasury; (2) repeal the ban on Treasury regulations or revenue rulings on employee/independent contractor classifications; and (3) eliminate the defense of industry practice as a justification for misclassifying workers as independent contractors.
Requires the Secretary to establish a procedure for workers to petition for a determination of their status as employees or independent contractors. Prohibits employers from retaliating against workers filing a petition. Requires the Secretary to take certain actions upon determining that an employee has been misclassified as an independent contractor, including informing the Department of Labor of such misclassification.
Requires the Secretaries of the Treasury and Labor to issue annual reports and exchange information on worker misclassification cases. Directs the Secretary of Labor to: (1) identify and track complaints involving worker misclassification for purposes of enforcing wage and hour laws; and (2) investigate industries identified by the Internal Revenue Service (IRS) as misclassifying workers.
Directs the Secretary of Labor to include on workplace posters required by the Fair Labor Standards Act a notice informing workers of their right to seek a status determination (i.e., whether they are employees or independent contractors) from the IRS.
Requires employers to: (1) notify their independent contractors of their federal tax obligations, the labor and employment protections inapplicable to independent contractors, and their right to seek a status determination from the IRS; and (2) maintain for three years a list of their independent contractors, including names and tax identification numbers.

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