Posted by Liz Greene
In a year-end move that should have surprised absolutely no one, Senator Kerry introduced a new bill on December 15th 2009 that would make it much more difficult for employers to classify workers as independent contractors for purposes of avoiding employment taxes.
The Taxpayer Responsibility, Accountability, and Consistency Act of 2009 (S. 2882) would revise Section 530 of the Revenue Act of 1978, known as the “Safe Harbor” provision, which currently allows employers to designate workers as independent contractors “regardless of the worker's actual status under the common law test, unless the employer has no reasonable basis for such treatment or fails to meet certain requirements,” according to a statement issued by Sen. Kerry’s office.
Not only is it unsurprising to see the companion bill to McDermott’s H.R.3408 (our coverage of that bill’s introduction predicted we’d see a Senate version most likely before the end of 2009), but it is natural that Kerry is the sponsor. Previously, he had sponsored a similar bill in S.3648, The Employee Misclassification Prevention Act, along with Senators Obama and Kennedy. “We cannot continue to reward businesses who refuse to play by the rules,” Kerry has said of the bill. The bill has been referred to the Senate Committee on Finance.
This just may be the year that you can say goodbye to Section 530 Safe Harbor.
My feasibility meter indicates that this one is most likely a winner.
Obama has indicated that this is a priority issue for his administration, and as a Senator he was strongly involved with independent contractor reform initiatives. Revenue agencies at all levels – federal, state, and local -- are feeling the pain of missing tax revenue due in large part to worker misclassification. The bill enjoys strong support among Democrats, and is co-sponsored by Senators Dick Durbin (D-Ill.), Tom Harkin (D-Iowa), Chuck Schumer (D-N.Y.), Sherrod Brown (D-Ohio), Bob Menendez (D-N.J.), and Paul Kirk (D-Mass.). Labor interests such as the Teamsters are vigorously supportive: "[Misclassification] lets unscrupulous employers cheat workers out of benefits they're entitled to. It's time to level the playing field so companies that play by the rules aren't at a competitive disadvantage to companies that cut corners by misclassifying their employees," Hoffa said.
Moreover, the two versions of the bill are closely matched, and the offices of Kerry and McDermott are “working together closely” on the issue, according to Whitney Smith, a spokesperson for Senator Kerry.
I’ve added the bill to our Legislation Tracker page, and I also recommend you check out the coverage from Littler Mendelson.
The Taxpayer Responsibility, Accountability, and Consistency Act of 2009 (S. 2882) would revise Section 530 of the Revenue Act of 1978, known as the “Safe Harbor” provision, which currently allows employers to designate workers as independent contractors “regardless of the worker's actual status under the common law test, unless the employer has no reasonable basis for such treatment or fails to meet certain requirements,” according to a statement issued by Sen. Kerry’s office.
Not only is it unsurprising to see the companion bill to McDermott’s H.R.3408 (our coverage of that bill’s introduction predicted we’d see a Senate version most likely before the end of 2009), but it is natural that Kerry is the sponsor. Previously, he had sponsored a similar bill in S.3648, The Employee Misclassification Prevention Act, along with Senators Obama and Kennedy. “We cannot continue to reward businesses who refuse to play by the rules,” Kerry has said of the bill. The bill has been referred to the Senate Committee on Finance.
This just may be the year that you can say goodbye to Section 530 Safe Harbor.
My feasibility meter indicates that this one is most likely a winner.
Obama has indicated that this is a priority issue for his administration, and as a Senator he was strongly involved with independent contractor reform initiatives. Revenue agencies at all levels – federal, state, and local -- are feeling the pain of missing tax revenue due in large part to worker misclassification. The bill enjoys strong support among Democrats, and is co-sponsored by Senators Dick Durbin (D-Ill.), Tom Harkin (D-Iowa), Chuck Schumer (D-N.Y.), Sherrod Brown (D-Ohio), Bob Menendez (D-N.J.), and Paul Kirk (D-Mass.). Labor interests such as the Teamsters are vigorously supportive: "[Misclassification] lets unscrupulous employers cheat workers out of benefits they're entitled to. It's time to level the playing field so companies that play by the rules aren't at a competitive disadvantage to companies that cut corners by misclassifying their employees," Hoffa said.
Moreover, the two versions of the bill are closely matched, and the offices of Kerry and McDermott are “working together closely” on the issue, according to Whitney Smith, a spokesperson for Senator Kerry.
I’ve added the bill to our Legislation Tracker page, and I also recommend you check out the coverage from Littler Mendelson.
Tags: safe harbor, legislation, section 530, kerry, S. 2882
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