AIM opposes bill that would set two standards for worker classification

April 6th, 2022- On Monday, Associated Industries of Missouri (AIM) testified in opposition of House Bill 2498. This bill was presented by Representative Jeff Porter in front of the House Workforce Development committee.

This bill would establish a set of criteria for determining whether a relationship is that of an employer-employee or that of an independent contractor.

"While we agree additional clarification would be very helpful to employers and respect the bill sponsor's intent, setting a state standard that is different from the federal standard would create an unworkable situation for Missouri employers," said Ray McCarty, president and CEO of AIM. "This must be addressed at the federal level - not the state level."

The bill provides, for purposes of workers' compensation, employment security, and the classification of workers for purposes of public works projects, any person who performs work for an employer and satisfies all of the following criteria shall be considered an independent contractor if the person:

1. Signed a written contract with an employer that states the employer's intent to retain the services of the person as an independent contractor and the person is required by the contract to hold any state or local business license and to maintain any occupational license;

2. Filed, intends to file, or is contractually required to file, in regard to the fees earned from work, an income tax return with the Internal Revenue Service for a business or for earnings from self-employment or the person provides services through a business entity;

3. Has the right to control the manner and means by which the work is to be accomplished, even though he or she may not have control over the final result of the work; and

4. Meets at least three other criteria set forth in the bill.

An employer is not required to classify any person who is considered an independent contractor as an employee, provided that the employer may hire and classify such person as an employee at any time.

This bill does not apply to the following:

1. Service consisting of prearranged passenger transport provided by transportation network drivers through a digital network offered by a transportation network company;

2. Non-profit entities;

3. State or local government entities; or

4. Federally recognized Indian tribes.

The Workforce Development committee took no action during the hearing. We will update you on any future action.