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.
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.