HB 342-FN – AS INTRODUCED
2007 SESSION
01/10
HOUSE BILL 342-FN
AN ACT relative to workers’ compensation coverage for certain independent contractors.
SPONSORS: Rep. Infantine, Hills 13
COMMITTEE: Labor, Industrial and Rehabilitative Services
This bill requires certain independent contractors to register with the department of labor.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
07-0976
01/10
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Seven
AN ACT relative to workers’ compensation coverage for certain independent contractors.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Workers’ Compensation; Independent Contractors. Amend RSA 281-A:18-a, I to read as follows:
I. Any corporation or limited liability company may elect to exclude up to 3 executive officers or members from the compulsive coverage requirements under this chapter; provided, that any person who bills more than 1,000 hours in a 12-month period or has invoices for more than $500,000 in sales in a 12-month period shall comply with RSA 320-A.
2 New Chapter; Independent Contractors. Amend RSA by inserting after chapter 320 the following new chapter:
CHAPTER 320-A
320-A:1 Definitions. In this chapter:
I. “Commissioner” means the commissioner of the department of labor.
II. “Contractor” means any individual who or entity which retains an independent contractor to perform specific work.
III. “Department” means the department of labor.
IV. “ Employee,” with respect to private employment, means “employee” as defined in RSA 281-A:2, VI(a).
V. “Independent contractor” means any person who meets the requirements of RSA 281-A:2, VI(b) and who bills more than 1,000 hours in a 12-month period and has invoices for more than $500,000 in sales in a 12-month period.
320-A:2 Workers’ Compensation Coverage; Notice of Misclassification. If, in the course of an inspection, the department determines that an employer is treating certain individuals as independent contractors without complying with the provisions of this chapter and that the employer has not listed such individuals for coverage in the employer’s workers’ compensation insurance policy, the department shall file a notice of misclassification with the employer’s insurance carrier. The form of such notice shall be determined by the commissioner.
320-A:3 Contractor Obligations.
I. Any contractor who contracts for work with an independent contractor subject to this chapter shall be required to obtain a copy of the independent contractor’s registration for the contractor’s files and to obtain the independent contractor’s employer identification number before the employer can pay for work done under the contract.
II. Any contractor who contracts with an individual and treats that individual as an independent contractor without ascertaining that the individual is properly registered as such with the secretary of state shall prima facie be deemed to be the employer of that individual.
320-A:4 Registration Requirement; Contracts Void; Penalty. No independent contractor shall contract to perform work unless such independent contractor registers with the department as provided in this chapter. Any person violating this section shall be guilty of a violation and for each violation shall be fined not less than $100 or more than $1,000 per day that such violation exists. Any contract by an independent contractor who has not registered as required under this chapter shall be void and unenforceable, and any sale or barter of any services by any such individual shall be voidable. Provided further that any time before midnight, at the expiration of 3 business days following the signing by the parties solicited or the owner of any solicited contract, the parties solicited or the owner may serve a notice of cancellation upon the independent contractor.
320-A:5 Federal Employer Identification Number Required. Every person registered as an independent contractor under this chapter shall hold or shall have applied for a federal employer identification number.
320-A:6 Registration Required.
I. Upon compliance with this section and upon payment of $50 for a state registration, the department shall grant a registration certificate to independent contractors. Applications for such registrations shall be made upon blanks prepared by the commissioner requiring such information regarding the applicant’s character and qualifications as the commissioner shall deem pertinent.
II. Any individual registered may do business as an independent contractor in this state, provided the registrant complies with all local ordinances, bylaws and regulations. If an applicant not a natural person applies for a registration certificate under this chapter, the sum of $5,000 deposited with the department in cash or surety bond shall be required, and the employees or agents of such corporation shall be covered under such cash payment or surety bond. Any surety bond posted under this section shall remain effective for at least 60 days after the annual renewal date. All such agents or employees shall be permitted to apply for registrations under such cash payment or surety bond.
III. The biennial registration renewal fee shall be $50. At the time the renewal fee is submitted to the commissioner, the registrant shall:
(a) Update information pertaining to the registration, if necessary.
(b) Submit written proof that any surety bond required by paragraph II is in effect and will remain in effect as required in paragraph II.
320-A:7 Term; Transfer. All registration certificates issued under the provisions of this chapter shall bear the date on which they are issued and shall continue in force, subject to the provisions of RSA 320-A:6, III, unless revoked by the commissioner under RSA 320-A:10. Any independent contractor who does not comply with the requirements for registration renewal under RSA 320-A:6, III shall be subject to the same penalty as if such independent contractor had no registration. Such registration certificates shall not be transferred.
320-A:8 Record. The department shall keep records of all registration certificates issued with the number of each, the names and residences of the persons registered and the fees received, and all such records shall be open for public inspection.
320-A:9 Endorsing Registration; Exhibiting Registration. Every person registered as an independent contractor shall endorse one’s usual signature upon the registration, and shall conspicuously exhibit such registration certificate in the independent contractor’s usual place of business.
320-A:10 Revocation of Registration Certificates.
I. Any registration certificate granted by the commissioner may be revoked after hearing:
(a) Upon conviction of the registrant of any offense which in the judgment of the commissioner warrants such revocation.
(b) Upon a finding by the commissioner that the applicant has willfully falsified the application for registration.
II. Any individual whose registration has been revoked under this section shall be ineligible to be registered as an independent contractor in this state for a period of not less than one year or more than 5 years from the date of the revocation. Any individual whose registration has been revoked, as a condition precedent to issuance of any new registration, shall be required to furnish to the revoking authority satisfactory evidence of renewed reputation and character or mental health in addition to the certificate required to qualify for such registration certificate under RSA 320-A:6.
III. Whenever any individual is determined to be in violation of any provision of this chapter, the commissioner shall immediately notify such individual’s insurance carrier.
320-A:11 Appeal. Any individual whose registration is revoked under this chapter shall have the right of appeal provided by RSA 273:11-c.
320-A:12 Counterfeit or Invalid Registration Certificate. Any individual who counterfeits or forges a registration, or has a counterfeited or forged registration in their possession with the intent to utter or use the same as true, knowing it to be false or counterfeit, or attempts to sell under a registration which has expired or has been revoked or cancelled, or which has not been issued or transferred to such individual, or has in one’s possession another’s registration with intent to use the same shall be guilty of a misdemeanor if a natural person, or guilty of a felony if any other person.
3 Effective Date. This act shall take effect January 1, 2008.
LBAO
07-0976
01/22/07
HB 342-FN - FISCAL NOTE
AN ACT relative to workers’ compensation coverage for certain independent contractors.
FISCAL IMPACT:
The Department of Labor has determined this bill will increase state general expenditures and revenues by an indeterminable amount in fiscal year 2009 and each year thereafter. There will be no fiscal impact on county and local revenues or expenditures.
METHODOLOGY:
The Department of Labor states it will need four new positions to administer the registration requirements for certain independent contractors established by this bill. This bill does not establish any new positions or make an appropriation to fund additional staffing costs. The Department states they will need one hearing officer at labor grade 26, two data clerks at labor grade 12, and one inspector at labor grade 19 and assumes a start date in FY 2009 for all positions. The Department estimates benefits at 48.3% and assumes that each position will require some expenditures for equipment as well as current expenses to support the position. Additional staffing costs related to the four positions are calculated as follows:
FY 2009 FY 2010 FY 2011
Hearing Officer $44,574 $46,592 $48,672
Benefits 21,529 22,504 23,509
Equipment 3,000
Current Expense 2,500 2,500 2,500
Total $71,603 $71,596 $74,681
1st Data Clerk $24,856 $25,812 $26,915
Benefits 12,005 12,467 13,000
Equipment 3,000
Current Expense 2,500 2,500 2,500
Total $42,361 $40,779 $42,415
2nd Data Clerk $24,856 $25,812 $26,915
Benefits 12,005 12,467 13,000
Equipment 3,000
LBAO
07-0976
01/22/07
Current Expense 2,500 2,500 2,500
Total $42,361 $40,779 $42,415
Inspector $33,009 $34,383 $35,921
Benefits 15,943 16,607 17,350
Equipment 20,000
Current Expense 2,500 2,500 2,500
Total $71,452 $53,490 $55,771
Total Additional Staffing Costs $227,777 $206,644 $215,282
The Department is unable to estimate the amount of revenue that will result from the registration and penalty provisions of this bill, as they are unable to determine how many independent contractors there are in the state and of those how many will register and be subject to fines and penalties. The registration fee is set at $50 with a biennial registration renewal fee of the same amount. This bill establishes penalties at an amount not less than $100 but not more than $1,000 per day.