Senate panel OKs easing independent contractor rules

Employers would be able to send workers to the state Labor Department to be certified as independent contractors if Senate Bill 191, a measure endorsed Tuesday by the Senate Commerce Committee, becomes law.

The bill, approved over the objections of the New Hampshire AFL-CIO, would give employers the assurance that certified workers (or subcontractors) would be treated as independent contractors for the purposes of workers' compensation when audited by their insurance companies.

The workers (or subcontractors) could file a form with the Labor Department certifying that they fulfill all of the criteria required to be considered an independent contractor. The bill leaves it up to the department to draw up the forms, spell out the rules, and come up with a fee (not to exceed $50), which would likely be paid for their prospective prime contractor.

Employers – usually in the construction industry – have long complained that they never know how insurers will rule on a worker's status each year, perhaps slapping them with thousands of dollars of back workers' compensation premiums. This way, they will know what the cost is up front, said Sen. Tom DeBlois, R-Manchester.

"We have answered most of the questions raised about this bill," said DeBlois.But AFL-CIO president Mark MacKenzie told NHBR the Monday before the Senate committee vote that he was very much opposed to the bill.

Workers might get certified as independent contractors at a company's request in order to get a job, as well as to avoid various payroll deductions, "but people change their mind about their status when they are falling off a 25-foot roof, at about the 15-foot level," MacKenzie said. "When they hit the ground, they find that they're an independent contractor."

The question of the status of a worker is often complicated, he said, "and are you going to tell me that for a $25 piece of paper they are now disqualified as employee?"

An employer who hires workers as independent contractors "hurts people who try to play by the rules," he said.

The full Senate should vote on the bill next week.