On February 10, 2016

Labor laws for contractors under examination in Vermont

By Michael Bielawski, Vermont Watchdog

The House Committee on Commerce and Economic Development met with labor leaders on Thursday, Feb. 4, to gauge how new bills regarding contractor work can best suit employers and employees.

“The big issue is trying to ensure that the long tradition of true independent contractors is able to continue,” said state Rep. Heidi Scheuermann, R-Stowe, in an interview following the discussions.

“We need to ensure that folks who have their own business, do their own work, and work for other people … are able to continue to do that, and that hiring entities aren’t afraid to hire them as result of some of the labor laws in place.”

Under the current classifications, some hiring entities worry they are liable for workers’ compensation or unemployment insurance, even though their hired workers are independent contractors.

One of the bills in question, S.378, proposes to establish a common definition of the term “independent contractor” for the workers’ compensation and unemployment insurance statutes. Scheuermann and 35 other lawmakers are sponsors of the bill.

Another bill under consideration, H.773, would amend definitions related to independent contractors in unemployment compensation and workers’ compensation statutes and post the classifications at worksites.

Under H.773, the Department of Labor could enter an employer’s premises to investigate compliance with workers’ compensation and unemployment compensation statutes, and enforce stop-work orders for workers’ comp violations. The bill also clarifies requirements for debarment consultation for employers who have violated wage and hour, workers’ compensation or unemployment compensation statutes.

A common assumption of the bills is that when someone isn’t covered by worker’s compensation and gets injured on the job, the cost for care falls back on Vermonters.

Scheuermann challenged this assumption. “I’m not sure if all of us are in the same position believing all of this risk, if something were to occur, would go to other Vermonters,” she said. “I’d like to find out where exactly people think the risks can go before we decide that it automatically is [on Vermonters], because I don’t see it, necessarily.”

She suggested some people may have savings or other medical insurance, so that an injured worker without workers’ compensation is not necessarily a public liability.

State Rep. Warren Kitzmiller, D-Montpelier, ranking member of the Committee, doubted that enough independent contractors have savings for such emergencies.

“In the last few years we’ve sometimes referred to some independent contractors as the guy with the pick-up truck, the ladder and a dog. The guy probably doesn’t have a whole lot of savings,” he said. “So if he falls off the roof, breaks his back, and he’s in the hospital not paying that bill, that gets put on us.”

Catherine Davis, vice president for strategy and public affairs for the Lake Champlain Chamber of Commerce, offered testimony on the bills.

“One of the things that we are interested in is the common definition,” she said. “It would be nice to provide some kind of clarity — one definition that everyone can understand. Some of the bills before you do that.”

Davis also stressed the importance of keeping Vermont competitive within the region.

“Our laws should be designed for where we are going in the future, not where we were 50 years ago. I want Vermont to be a place where this kind of thing can thrive, where young people want to come to work here, whether it’s because they can work for multiple clients or because they want a steady job with an employer.”

Another concern of Scheuermann’s is that not every independent contractor works with equal risks of injury. The panel compared the risks of an office worker developing carpal tunnel syndrome versus loggers who face danger daily.

After multiple days of hearing testimony on the issues, committee members say they need time to think things over before making a next move.

“I’ve sat and listened to a lot of the testimony the last few days, and what I thought was simple wasn’t simple,” said committee chairman Rep. Bill Botzow, D-Bennington.

He added that the bill might need to be revised to specify different sets of rules for different sectors of the workforce.

Contact Michael Bielawski at mbielawski@watchdog.org

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