Bill Text: HI SB3106 | 2018 | Regular Session | Amended
Bill Title: Relating To Independent Contractors.
Spectrum: Partisan Bill (Democrat 7-0)
Status: (Introduced - Dead) 2018-02-14 - Report adopted; Passed Second Reading, as amended (SD 1) and referred to JDC. [SB3106 Detail]
Download: Hawaii-2018-SB3106-Amended.html
|
THE SENATE |
S.B. NO. |
3106 |
|
TWENTY-NINTH LEGISLATURE, 2018 |
S.D. 1 |
|
|
STATE OF HAWAII |
|
|
|
|
|
|
|
|
||
|
|
||
A BILL FOR AN ACT
RELATING TO INDEPENDENT CONTRACTORS.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that the economy is changing and an increasing number of individuals are facing decisions on whether to choose to become entrepreneurs and go into business for themselves or remain in employment relationships and maintain the protections afforded by various labor laws, including Hawaii's employment security law. The legislature further finds that many of these individuals may not be aware of the criteria used by the department of labor and industrial relations when making determinations as to whether an individual is in an employment relationship or is a bona fide independent contractor.
Accordingly, the purpose of this Act is to provide greater clarity in Hawaii's employment security law to those individuals choosing to become entrepreneurs by setting forth three categories and twelve factors to determine independent contractor status.
SECTION 2. Section 383-6, Hawaii Revised Statutes, is amended to read as follows:
"§383-6 [Master and servant relationship, not
required when.] Employer and employee relationship; status
determination. Services
performed by an individual for wages or under any contract of hire shall be
deemed to be employment subject to this chapter irrespective of whether the
common law relationship of [master and servant] employer and employee
exists unless and until it is shown to the satisfaction of the department of
labor and industrial relations that[:
(1) The individual
has been and will continue to be free from control or direction over the
performance of such service, both under the individual's contract of hire and
in fact;
(2) The service is
either outside the usual course of the business for which the service is
performed or that the service is performed outside of all the places of
business of the enterprise for which the service is performed; and
(3) The individual
is customarily engaged in an independently established trade, occupation,
profession, or business of the same nature as that involved in the contract of
service.], in the department's determination, the preponderance of the
following factors has been met:
(1) Behavioral
control. Facts that show whether the
business has a right to direct and control how the individual does the task for
which the individual is hired include the type and degree of:
(A) Instructions
the business gives the individual; and
(B) Training
that the business gives the individual;
(2) Type of
relationship. Facts that show the
parties' type of relationship include:
(A) Written
contracts describing the relationship the parties intended to create;
(B) Whether
the business provides the individual with employee-type benefits, such as
insurance, a pension plan, vacation pay, or sick pay;
(C) The
permanency of the relationship; and
(D) The
extent to which services performed by the individual are a key aspect of the
regular business of the company; and
(3) Financial
control. Facts that show whether the
business has a right to control the business aspects of the individual's job
include:
(A) Whether
the individual has a valid general excise tax license;
(B) The
extent to which the individual has unreimbursed business expenses;
(C) The
extent of the individual's investment in the facilities or tools the individual
uses in performing the contracted services;
(D) The
extent to which the individual makes services available to the relevant market;
(E) How
the business pays the individual; and
(F) The
extent to which the individual can realize a profit or loss.
The degree of importance of each factor may vary,
depending on the occupation and the individual facts of each case as determined
by the department."
SECTION
3. The department of labor and
industrial relations shall submit a report of its findings and recommendations,
including any proposed legislation, to the legislature no later than twenty
days prior to the convening of the regular session of 2019 on the guidelines developed by the unemployment insurance
coverage committee to assist auditors in applying section 383-3, Hawaii Revised
Statutes, during the auditor's investigations.
SECTION
4. The department of labor and
industrial relations shall submit a report of its findings and recommendations,
including any proposed legislation, to the legislature no later than twenty
days prior to the convening of each regular session regarding the number of
determinations applying section 383-6, Hawaii Revised Statutes, rendered by the
department of labor and industrial relations' unemployment insurance division
and employment security appeals referee's office finding both independent
contractor and covered employment status.
SECTION 5. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.
SECTION 6. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 7. This Act shall take effect on January 1, 2045.
Report Title:
Employment Security Law; Independent Contractors; Employer and Employee Relationship
Description:
Provides three categories and twelve factors for the department of labor and industrial relations to apply to determine independent contractor status. Takes effect 1/1/2045. (SD1)
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.
