Business & Economy

House Commerce starts writing new independent contractor bill

Bill Botzow

Rep. Bill Botzow, D-Pownal, the chair of the House Commerce and Economic Development Committee, speaks to reporters. File photo by Erin Mansfield/VTDigger

[T]he House Committee on Commerce and Economic Development has begun work on a new bill that would redefine which workers in Vermont are employees and which are independent contractors.

The committee has spent nearly a month hearing from business and labor interests on the issue, then spent Tuesday evening coming up with language on the purpose of the new bill. Members will continue writing the bill this week.

Rep. Bill Botzow, D-Pownal, the chair of House Commerce, said Monday he wants to get it just right.

Friday was the deadline by which committees were supposed to pass most legislation they want taken up by the rest of the Legislature this year. But Botzow said he has already made arrangements regarding the bill with House Speaker Mitzi Johnson, D-South Hero, and Sen. Kevin Mullin, R-Rutland, the chair of the Senate Economic Development Committee.

“I have told people that I’m not going to put out a do-or-die deadline, but I do not want in any way” the energy in the committee to wane, Botzow said. “My promise is to pursue” the bill.

In 2016, Botzow’s committee unanimously passed a bill on independent contractors that business interests, including general contractors, supported. The bill went through a series of political machinations before dying shortly before the end of the biennium.

That version would have dramatically simplified the test for who is an employee versus an independent contractor. It would have done away with current law, which has two different standards for classifying employees.

Currently, the Department of Labor uses one definition to determine whether the employer needs to provide workers’ compensation insurance for the worker, and another for determining whether the employer needs to pay taxes for unemployment insurance.

Advocates for the 2016 bill said creating one definition would help construction companies and freelancers who work in information technology. Opponents of that bill said it would have stripped workers of their rights. Now, stakeholders are looking for more of a balance.

Lindsay Kurrle

Lindsay Kurrle, the commissioner of the Department of Labor. File photo by Erin Mansfield/VTDigger

Labor Commissioner Lindsay Kurrle said the department would support clarity in the law, but she qualified that to say the bill should not impede business growth or lower protections for workers.

Kurrle said the department won’t be writing a bill itself, but it gets “numerous inquiries” from businesses that do not understand the definition of an independent contractor and would benefit from more clarity.

“I think there are a lot of people that really, really want to follow the law that find confusion in it, and they want clarity in it, and I think there are certainly a lot of bad actors who also want to go around it,” Kurrle said.

“The majority of people really, really want to do the right thing, but they just need better guidance,” she said. “If we can offer clarity, whether in the form of guidance or in the form of legislation, I think it’s very important.”

Cameron Wood, the department’s director of unemployment insurance and wages, agreed. He said his division and employers would appreciate having a common definition for an employee for both unemployment insurance purposes and workers’ compensation insurance purposes.

“But the reality is we do serve two different purposes in workers’ compensation and unemployment insurance,” Wood said. “If it’s possible to create one (definition), that’s great, and the people using it on the employer side would find it very helpful.”

Steve Monahan, the director of workers’ compensation at the Department of Labor, said redefining who is an employee and who is an independent contractor has been an issue in the Legislature for more than a decade.

“This is one of those things where everybody has an opinion, and building consensus is extremely difficult,” Monahan said. “People are not necessarily happy with what it is, but they’re fearful of what may be.”

Kurrle added: “We’re trying to find something that makes sense, because we need the employers. We need them to employ the workers, so I look at it as a very broad, cohesive team.”

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Erin Mansfield

About Erin

Erin Mansfield covers health care and business for VTDigger. From 2013 to 2015, she wrote for the Rutland Herald and Times Argus. Erin holds a B.A. in Economics and Spanish from the State University of New York at Stony Brook, where she also attended journalism school. Erin has worked in public and private schools across Vermont and interned in the U.S. Senate. She has been published by the Columbia Journalism Review and the Society of Professional Journalists. She grew up in Killington.

Email: [email protected]

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