Delaware has become the latest state to impose stiff penalties on construction industry employers who improperly classify employees as independent contractors to save on business costs and avoid paying appropriate taxes.
On July 31, 2009, Delaware Governor Jack Markell signed into law House Substitute No. 1 for House Bill No. 230, which imposes significant monetary and other penalties on “construction services” employers who willfully misclassify employees as “independent contractors.” Continue reading
Independent Contractor Update: A bill targeting the construction industry has been introduced in the Delaware General Assembly. “The Construction Industry Independent Contractor Act,” HB129, which is similar to one that failed to pass during the last legislative session, creates a presumption that an individual performing a service “in the making of improvements to real property” is an employee rather than an independent contractor. To overcome that heavy burden, an employer must prove that the individual is free from control or direction over the performance of that service, the service is outside the usual course of the employer’s business or performed outside of all of the employer’s places of business [seemingly impossible to prove in the context of a construction employer, who travels from place to place], and the individual is customarily engaged in “an independently established trade, occupation, profession or business.” Continue reading
Independent Contractor Update: Earlier this year, legislation was introduced that would prevent employers from improperly classifying employees as “independent contractors” in order to avoid paying them overtime and benefits. The Employee Misclassification Prevention Act (H.R. 6111) hasn’t seen any activity since June, when it was referred to the House Ways and Means’ Subcommittee on Income Security and Family Support. (Readers may recall that this was the same time that the Delaware and Pennsylvania state legislatures were reviewing similar legislation). Continue reading
Employers should be aware of several employment and labor law initiatives in the state and federal legislatures. Congress currently is considering the Employee Free Choice Act (EFCA), and the RESPECT Act, for starters. And the Construction Industry Independent Contractor Act, which was quietly passed by the Delaware and Pennsylvania Houses poses serious risks to employers in the construction trade. Continue reading
Sheldon Sandler reported earlier this week about a law passed by the Delaware House that would criminalize employment laws. Pennsylvania has passed a law nearly identical to the Delaware bill. In case you missed Sheldon’s post, here’s a recap that includes the details of the laws of both states. Continue reading
Delaware employers who’ve not heard of “The Construction Industry Independent Contractor Act” should pay close attention to this post. Every business with employees working in Delaware should be aware of this bill, HB 468, introduced yesterday in the Delaware General Assembly, and the many repercussions it could cause. Continue reading