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Senate advances bill to simplify independent-contractor test for unemployment law
Summary
Sen. Stevenson introduced SB 3 to replace a 20-factor test with a simpler independent-contractor definition aligned with federal FUTA guidance; senators asked whether the change affects tax or liability rules and were told it covers employment-security law only. The bill was placed on third-reading calendar.
Sen. Stevenson told the Senate that SB 3 would revise how Utah defines 'independent contractor' under employment-security law, replacing a cumbersome 20-factor test with a clearer standard aligned with the federal FUTA definition. He said the change followed bargaining between labor and employer groups and was designed to make classification easier for workers who perform services for multiple employers.
‘‘This statute essentially brings back into compliance with the federal law and other parts of the law the definition of independent contractor,’’ Stevenson said during floor remarks introducing the bill. Supporters said the bill was the outcome of negotiations among employer and labor groups and the Employment Security Advisory Commission and reflected a consensus solution.
Senators asked whether the change would affect other legal areas such as state tax or liability rules. Stevenson replied the bill dealt only with employment-security issues but noted the bill contains a provision protecting individuals employed by multiple related corporations who are paid through a common paymaster: those workers would not automatically be classified as employees of the paymaster.
After discussion and committee endorsements, the Senate moved SB 3 for second reading and placed it on the third-reading calendar by recorded vote.
What’s next: SB 3 was placed on the third-reading calendar; the body is expected to consider the bill for final passage in a future session day.
Source: Transcript of the Utah State Senate, Jan. 19, 1995 (introduction and committee report on SB 3).
