Senate advances pilot to create independent-contractor database to detect worker misclassification

Senate Bill 189, presented by Senator Eastman, would launch a pilot independent-contractor database to identify and reduce the misclassification of employees as independent contractors, coordinate data across executive agencies and recommend legislative changes.

Eastman said misclassification destabilizes the business climate, denies workers benefits such as workers’ compensation, and reduces state revenue through unpaid taxes and insurance. He described a multi-agency pilot coordinated by the Department of Workforce Services and said the bill includes required reports to the Business and Labor Interim Committee.

Amendment No. 1, adopted on the floor, creates a four-member independent-contractor enforcement council and adds the Chief Information Officer of the Department of Technology Services to the council; it also brings the Commissioner of Public Safety or a designee into the review process.

Questions during debate addressed the fiscal note (reported on the floor as $264,000 in 2009 and $114,000 in 2010, with offsetting registration fees), whether participation in the pilot would be mandatory (sponsors characterized it as a pilot with recruitment, not universal compulsion), and civil enforcement mechanisms. Some senators expressed concern about administrative burden on small contractors and whether the program would feel like intrusive oversight; sponsors said the goal is to analyze and reduce abuses and reward compliant employers.

Following roll-call, the Senate reported passage to third reading (vote reported as 20 yes, 2 nay, 7 absent). The bill’s proponents said follow-up reports and interim committee review are required before broader statutory changes would be recommended.