Business & Economy

Legislative preview: Rural development initiatives, independent contractor bill top economic development list

File photo by Mike Faher/VTDigger

The Legislature’s business-oriented committees will spend time on rural development and classification of employees versus independent contractors.

Leaders say the focus on rural development is in response to what they heard on the campaign trail in 2016 — that rural areas of Vermont are being left behind while Chittenden County prospers.

The classification of independent contractors will be revived from the 2016 session, when a bill dramatically changing Vermont’s labor laws unanimously passed the House Commerce Committee but never got a vote on the House Floor.

Sen. Tim Ashe, D/P-Chittenden, the presumed president pro tempore of the Vermont Senate, said he has tasked the Senate Committee on Agriculture and the Senate Committee on Economic Development to address rural development.

“I have a broad goal of bringing together several Senate committees with a particular emphasis on rural economic development,” he said. “What I’ve continued to hear is the refrain that there has not been a deliberate incentive for rural economic development in Vermont.”

Ashe said the Agriculture Committee is important for discussing rural development because it deals with forestry and farming.

Independent contractors

A 2016 bill that would have changed the definition of independent contractors will come back to life this session, reviving another existential fight between labor interests and business interests.

House Minority Leader Don Turner, R-Milton, said his caucus wants to pass the original version of last year’s independent contractor bill, which came out of the House Committee on Commerce and Economic Development 11-0 across party lines.

Proponents of the bill said it would allow Vermont’s workforce to move into the 21st century, allow more people to work for themselves, spur entrepreneurship, and require more construction subcontractors to carry their own worker’s compensation.

Critics said the bill would have allowed employers to fire their employees and rehire them as independent contractors in order to skirt Social Security and Medicare taxes, unemployment taxes and worker’s compensation insurance.

The bill faced nearly two months of procedural delays, and after behind-the-scenes maneuvering, was sent to die in the House Committee on Ways and Means because it would affect unemployment tax revenue.

“We will do everything we can to make sure that bill becomes law,” Turner said. “That bill received bipartisan support, an 11-0 vote, and was stifled by (former House Speaker) Shap Smith and the unions.”

Turner said the economy of the future would be based on more entrepreneurs, with people making apps, and five or six software developers working as independent contractors on the same project for one client.

“To us that’s one of the most important bills that we can get passed if we’re going to show people 25 to 45 that you can do business in Vermont in the way that you want to,” he said.

Rep. Mitzi Johnson, D-South Hero, confirmed that House Commerce would likely deal with the issue again this year. She said more and more people are working as independent contractors because they are “piecing together a living rather than having consistent, traditional employment.”

Paid Family Leave

A new labor rights initiative under consideration would require all businesses to provide 12 weeks of paid parental leave and short-term disability coverage to employees. The proposal is different from the paid sick leave law signed in 2016.

The proposal is modeled similarly to unemployment insurance: businesses and workers would pay a payroll tax to the state, and the Department of Labor would manage a fund that would pay workers who need to take time off to care for a newborn, a relative or recover from an injury.

Ashley Moore, a spokesperson for Main Street Alliance, said she is confident that the measure will move forward this biennium. Moore said is “a lot of momentum for this in Vermont” and there are representatives and senators willing to introduce bills supporting paid leave.

Gov.-elect Phil Scott called a payroll tax “a nonstarter” for him during the campaign, but expressed support for the concept of family and medical leave. He said he would be more open to a proposal that would not impact employers.

Additional proposals for economic incentives and business programs could come in Scott’s fiscal 2018 budget address.

If you read us, please support us.

Comment Policy requires that all commenters identify themselves by their authentic first and last names. Initials, pseudonyms or screen names are not permissible.

No personal harrassment, abuse, or hate speech is permitted. Comments should be 1000 characters or fewer.

We moderate every comment. Please go to our FAQ for the full policy.

Erin Mansfield

Recent Stories

Thanks for reporting an error with the story, "Legislative preview: Rural development initiatives, independent contr..."
  • Paco DeFrancis

    The idea “Chittenden County prospers” is the type of ignorant thinking that leads to population and job loss across the entire state.

    Growth in the county is anemic! Paltry compared to the county’s growth in the 70’s and 80’s. I can speak for myself and the many other recent graduates who live in Burlington–they’re are few jobs in Chittenden County for us! Many residents are forced to commute out to Montpelier and Waterbury in Washington County for employment.

    Open up your eyes Senator Ashe! People are leaving your county like flies because of lack of opportunity here combined with an affordability crisis driven by Act 250 permitting costs.

  • P.L. Stromgren

    The most significant thing that the Legislature could do would be to move Eco. Dev. out of the ACCD and make it a separate agency with its own field representatives. Lower cost, a focused agenda and a high potential for success. There is no magic pill to improving VT’s economic picture. A solid program with metrics brings results. As a start it should identify all the mfg., distribution, and IT companies already in VT and work with them to help improve their outcomes. Establishing a basic foundational program is a solid platform to build off of. A state bank and extra funding support is a small part of a sound program. We need to stop making half steps if VT is truly interested is results.

    • Ann Meade

      Removing DED from ACCD is not going to save any money, creating another agency just creates more overhead. I don’t know how many field agents DED currently has but the problem has been lack of tools provided to field staff, not numbers. A rep from DED shows up and does what? Tells them what they already can learn from their website, that there are very few incentives in VT and some very tired technical assistance programs. I can’t imagine that it would matter if the department closed.

  • Neil Johnson

    If you want to make millions, the place is NYC, Vermont is not the economic capital of our nation, that doesn’t mean you can’t make a good living, and I might say have a much better life than NYC. you will have to make sacrifices. The really high paying jobs for Vermont are in government, education and health care, all of which are not open to any competition, it they were our taxes could easily drop 25%, our health care 50% and we’d have better service in all sectors. There is such overhead, duplication and waste it’s frightening.

  • Neil Johnson

    Family Planning, what does this mean? Is there anything to this? Shouldn’t people be planning for their children? Isn’t this one of the things you plan for?

    • Gary Murdock

      “Shouldn’t people be planning for their children?”

      Nope. With the progressive model, which the majority of this state has clearly embraced, that task falls squarely under the domain of the all powerful, benevolent central government. Free from the mundane task of child rearing, we are free to embrace the Roper plan: ski during the day, work part time at night, and drive for Uber.

  • “That bill received bipartisan support, an 11-0 vote, and was stifled by (former House Speaker) Shap Smith and the unions.” Lets hope that now that Shumlin and his right hand man Shap are gone, we can get some real world, forward thinking, cost cutting, right sizing, less government (add your beef here) things done in this state. I’m hoping this is a new order rather than dragging on reminiscent of (for example) the Obama years. We need to embrace the new economy rather than kicking and screaming from the old one.

  • Arthur Hendrickson

    Why is the state wasting taxpayer money on TV commercials about the independent contractor bill?

    • Ann Meade

      And a really bad commercial at that.