Amendment that would classify news carriers as independent contractors likely to hit Senate floor today
 

Amendment that would classify news carriers as independent contractors likely to hit Senate floor today

UPDATE: The amendment to H.169 was passed over by the Senate on Friday.

Are news carriers employees or independent contractors? Should newspapers in Vermont get a pass on paying unemployment costs for news carriers?

That’s the question senators will take up today as they consider H.169, a bill that gives unemployment tax relief to employers impacted by Tropical Storm Irene.

Sen. Kevin Mullin, R-Rutland, will offer an amendment to H.169 that would ensure news carriers are classified as independent contractors, and therefore ineligible for unemployment insurance.

Never mind that that same amendment was shot down in the Senate Finance Committee in a 4-2-1 vote. That there doesn’t appear to be enough support for the measure among the majority of senators. Or that the Department of Labor recently issued a legal determination that a bulletin the department, under the Douglas administration, issued in 2006 giving newspapers an effective exemption from the unemployment insurance program went against legislative intent. Or, that a 1985 Vermont Supreme Court ruling required The Times Argus to classify news carriers as employees, and in order for the exemption by rule, unauthorized by lawmakers, to hold, the Legislature must provide a clear legislative remedy.

Clarity is in the eye of the beholder. Lawmakers dispute what the intent of the 2006 legislation (H.717) was. The bill gave “direct sellers,” an exemption to unemployment payment requirements. Rep. Warren Kitzmiller, D-Montpelier, who was a member of the House Commerce and Community Development Committee at the time the bill passed, calls the Douglas administration bulletin a “rogue ruling.” He says the bulletin from the statute does not include news carriers in the definition of “direct seller.” Sen. Vince Illuzzi, who was chair of Senate Economic Development then, has said in a letter that he remembered the bill including news carriers. The statute, however, does not include any specific language about news carriers.

Meanwhile, the Douglas administration issued a bulletin (UI Bulletin 482) that year that gave newspapers an exemption to the law — in direct opposition to legislative intent, according to Kitzmiller.

Since that time, newspapers have treated news carriers as independent contractors ineligible for unemployment benefits.

A few years ago, the issue came to Michael Sirotkin’s attention. The lobbyist who has represented union interests says the misinterpretation of the 2006 law sets a bad precedent and deprives low-wage workers who typically earn about $15,000 a year of benefits — including workers’ compensation, matching FICA payments, and legal protections — they deserve under the law. Most news carriers, he says, are not teenagers who are trying to earn a few extra bucks — they are adults who distribute newspapers as a way of making ends meet.

Sirotkin, who has lobbied to get the Department of Labor to reconsider the bulletin, says news carriers fail the “ABC test” — a three-part test the department uses to determine whether a worker is an employee or an independent contractor. By definition, employees are told what to do, when to do it and where to do it. Independent contractors, on the other hand, are the masters of their own fate and are not controlled by the companies they work for.

“Employers who misclassify their workers try to illegally categorize their workers as independent contractors to save upwards of 30 percent on their payroll costs,” Sirotkin wrote in a statement to senators.

Sirotkin describes the Douglas administration bulletin as an “end run by the Executive Branch and a clear abuse of power.”

Eventually, the Department of Labor changed its tune. While the agency does not take a stance on what the law should be, under current statute, lawyers for the department have said news carriers should be considered employees eligible for unemployment benefits.

In a letter to lawmakers, Annie Noonan, commissioner of the Department of Labor, wrote that at the time H.717 was passed, eight separate bills exempting newspaper carriers from unemployment had been introduced since the 1985 Times Argus decision. “If it had been the Legislature’s intent to exclude newspaper carriers from coverage, it could easily have added the provisions … by amendment,” she wrote.

“The Vermont Legislature, in passing H.717, did so with the knowledge that the Vermont Supreme Court had expressly ruled that newspaper carriers should be employees, subject to coverage under Vermont’s unemployment law,” Noonan wrote. “It follows, then, that the legislature would have expressly included newspaper carriers in the definition of “direct seller” in H.717 if it intended to overrule the holding in Times Argus v. Department of Employment and Training.”

The department went to the Legislative Committee on Administrative Rules last fall for a rule change. Lawmakers were divided on the issue and voted 5-3 earlier this year to overturn the administration’s proposal to revert to the pre-2006 interpretation of the law. Since then, the department issued a statement that the department will be conducting a thorough economic impact analysis of the issue.

Kitzmiller says the kindest language he can find to describe Illuzzi’s contention and that of the other lawmakers who spoke in opposition to the proposed final rule, is “they misspoke.”

For now, in practical terms, the department is in something of a conundrum. If it asks newspapers to pay for benefits, there is a good chance publishers will sue. On the other hand, if the law isn’t enforced, news carriers could sue.

Meanwhile newspaper publishers from the Vermont Press Association, including the Burlington Free Press, Caledonian-Record and the Times Argus and Rutland Herald, have stepped up their lobbying efforts. They hired a national law firm to testify on their behalf and have lobbied the Senate, where they have found support from Senate President Pro Tem John Campbell. Mullin and Campbell sponsored the original amendment, and 10 senators in all have signed off on the new amendment, this time without Campbell.

Mullin is going to bat for John Mitchell, the publisher of the Times Argus and Rutland Herald, who has been a daily presence in the Statehouse this legislative session. If the amendment fails, Mitchell could have to pay about $45,000 to the unemployment insurance fund. It’s a cost, he says, that the company can ill afford at a time when his industry is suffering financially. Mitchell’s company has laid off dozens of employees at the Herald and the Argus, and he recently sold the Times Argus building to Barre Mayor Thom Lauzon. The news and business staff will be moving to another location in Barre. Meanwhile, less of Mitchell’s business is direct home delivery as readers migrate to the Web for news from the Times Argus and Rutland Herald.

“It seems an almost hurtful change in practice — making the newspapers pay unemployment insurance for something news carriers are unlikely to have the benefit of,” Mullin said.

Mullin says it’s not a labor issue because news carriers don’t hit the threshold that allows them to qualify for benefits. In the end, he says newspapers would be forced to pay into a system that benefits seasonal employers who lay off workers every year.

Campbell says he doesn’t want to put a financial burden on publishers at a time when newspapers are suffering and Vermonters need good information about government, business and society. He’s had trouble, though, soliciting support for the legislation.

“We’re missing what’s happening to the media,” Campbell said. “A lot of it is being bought up by Rupert Murdochs who are controlling the messages. We are fortunate not to have that problem.”

Sen. David Zuckerman, P-Chittenden, opposes the amendment on principle. “We should maintain our laws, which have been misapplied for a long time,” he said.

Editor’s note: This story was updated at 6:32 a.m. April 26.

DISCLOSURE: VTDigger has a media partnership with the Caledonian-Record; Sirotkin and Necrason have been business sponsors of VTDigger.

Anne Galloway

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15 Comments on "Amendment that would classify news carriers as independent contractors likely to hit Senate floor today"

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Renée Carpenter
3 years 2 months ago
“Sen. Kevin Mullin, R-Rutland, will offer an amendment to H.169 that would ensure news carriers are classified as independent contractors, and therefore ineligible for unemployment insurance. “Never mind that that same amendment was shot down in the Senate Finance Committee in a 4-2-1 vote. That there doesn’t appear to be enough support for the measure among the majority of senators. Or that the Department of Labor recently issued a legal determination that a bulletin the department, under the Douglas administration, issued in 2006 giving newspapers an effective exemption from the unemployment insurance program went against legislative intent. Or, that a… Read more »
Kathy Callaghan
3 years 2 months ago
Most of the news carriers I know are older adults who are trying to make ends meet. They deserve employee status and the benefits that go with it. They are not “independent contractors” who set up a contracting business and contract out to do this work. In many cases, they are long-term, faithful and reliable employees who get up way before the crack of dawn, schlep heavy bundles of newspapers, and drive through all kinds of inclement weather to ensure that we get our morning papers on time. One carrier I know is a woman who lost her trailer home… Read more »
Karl Riemer
3 years 2 months ago
We congratulate ourselves in Vermont that we’ve so thoroughly repudiated the pernicious classism and persistent dishonesty of the Republican Party. We smirk knowingly when Kevin Mullin pulls crap like this, defending the unqualified power of employers to do anything at any time for any reason to their employees, because he’s a wolf in wolf’s clothing (or corporate lapdog, if you like). For him to say news carriers aren’t employees, a transparent falsehood, is perfectly in character, expected behavior. For him to say it’s not a labor issue because news carriers get no benefits is despicable but similarly predictable. But time… Read more »
Patrick Cashman
3 years 2 months ago

But how do they get elected if we’ve “repudiated the pernicious classism and persistent dishonesty of the Republican Party.”? Perhaps they were appointed? Or perhaps your neighbors may not agree with your viewpoint, and isn’t that great?

Ron Pulcer
3 years 2 months ago
I think that the term “direct seller” as applied to newspaper carriers is bogus! The newspaper carriers may be paid on a per sale basis, rather than hourly. But these folks are “delivery” people, they do not make the sales. For example, here is the Subscribe webpage for the Rutland Herald. So the Rutland Herald is “selling” their subscriptions online. If you pick a subscription option that includes print edition (home delivery), then the Rutland Herald will notify the “newspaper carrier” in your neighborhood or town that they have a new “delivery” to your address. https://home.rutlandherald.com/clickshare/subscriptionCenter.do The Rutland Herald does… Read more »
Steven Farnham
3 years 2 months ago
I felt that this article was extremely confusing – but maybe I just didn’t have enough caffeine before I started reading it. It would have helped to have some discussion about Times Argus v. Department of Employment and Training, some history of what led up to it, plus a few words about H.717 BEFORE delving into all the fiefdoms of subtle nuanced interpretation surrounding them. Anyway, just a comment about news carriers. Unless earning money is not part of the desired outcome, it is a job for the dim-witted. I tried it once – very briefly. After completing the route,… Read more »
Jill Charbonneau
3 years 2 months ago
If it walks like a duck and quacks like a duck it is probably a duck. The newspaper carriers work diligently, before the crack of dawn, over hills and dale,in all sorts of weather to ensure people have their papers available to them long before many of us have even enjoyed the first aroma of our morning coffee. How is it they are not employees? They are as much employees as migrant farm workers. Why is it so convenient to look the other way? One may think they are the least of us when looking at their earnings. If one… Read more »
Susan Bilkowszeki
3 years 2 months ago
I wish they would do this nationwide & finally consider all carriers “employees”. I have been delivering for years now. I drive about 50 miles a day in the only car we own. I do about almost $300 a month in gas and only get $42 every two weeks for gas allowance. If there’s a complain I’m double charged the price of the paper and on weekend triple charged the price of the paper which comes out of my check. I have to pay for all bags, rubber bands, collection envelopes, etc. out of pocket. Not to mention blowing through… Read more »
Steven Farnham
3 years 2 months ago
Dear, Susan The feds allow 55-1/2 cents a mile for mileage expense. That assumes normal use. You are working parts of your car way harder than average. Your per-mile driving expense may be closer to $1.00 or $1.50. Do the math. Multiply the length of your route by $1.00 or so. Deduct that from all that you are paid per day (’cause their measly mileage allowance won’t be enough). Divide the remainder by the number of hours you’re on the road per day. If it ain’t at least minimum wage, it’s time for a new job. Or unionize, but good… Read more »
Bryan Bouchard
3 years 2 months ago

The newspaper publishers have been abusing the delivery folks for years and this is just more of the same. If you were to do the math, these delivery people are delivering the papers for free. These people cannot deliver the papers when they feel like it, they do it under the direction of the newspaper. They are employees and should be treated as such.
Campbell doesn’t want to put financial burden on the publishers, so lets squeeze some poor working guy with three jobs trying to make ends meet. Mr. Campbell you should be ashamed of yourself.

Ellen Oxfeld
3 years 2 months ago

The newspaper carriers deserve the same benefits as other workers. Also, when we enlarge the pool of workers who have good benefits and labor protections we are not only doing them a favor, we are helping our entire economy. Ultimately, we all benefit. Even business cannot do well when everyone is just scrapping by.

Susan Bilkowszeki
3 years 2 months ago
In terms of direction by the paper in how we do our job (I’m in Pennsylvania, came across this article in my search online pertaining to newspaper carriers) we have been told numerous things such as we have to count our papers in the morning to make sure we have the proper amount & if we don’t & call in a shortage we’re told they could terminate our contract for not counting papers when in fact there’s nothing in the contract that says we have to count any papers-if they gave us the correct amount we wouldn’t have to count… Read more »
Ron Pulcer
3 years 1 month ago

Susan,

Do the newspapers allow you to share contact info with other carriers so that you can cover for each other to enjoy a vacation, or weekend off, or for bereavement of a family member?

Kathy Callaghan
3 years 2 months ago
Thank you Susan, for putting some reality into this ridiculous argument. Of course these are employees – ill treated employees, but employees none the less. These newspaper companies should be thankful for dedicated employees such as Susan and others whom I have met (described in post above). Of course the news companies can afford $45k – and far better than these dedicated employees who are working at this thankless job just to make ends meet. Both Kevin Mullin and John Campbell should be ashamed of themselves. On a human level, they know better, both of them. If you can’t be… Read more »
3 years 1 month ago
The senators sponsoring this amendment should be ashamed of themselves. The newspaper delivery drivers have a hard life and serve at the pleasure of the company. If they lose their jobs for circumstances beyond their control they should have the protection of the unemployment compensation system, just like any other employee. These drivers are not independent contractors, they’re employees. They have none of the characteristics that define independent contractors and should not be treated as such. Everyone who disagrees with this amendment should call the Sergeant at Arms and leave a message that they want their senator to vote against… Read more »
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