AN ACT TO ENACT THE EMPLOYEE FAIR CLASSIFICATION ACT.
Adds new Article 4, to be known as the Employee Fair Classification Act, to GS Chapter 95. Defines terms as they apply in Article 4. Includes the following definitions: (1)employ--to suffer or permit to work; specifies that an entity or individual is not deemed to be an employer of a person hired or otherwise engaged by the entity's orindividual'sindependent contractor; (2) employee--any person defined as an employee by either GS 95-25.2(4), 95-47.1(6), 95-174, 96-1(10), 97-2(2), or 105-163.1(4); specifies that a person who is an independent contractor under GS 95-280 is not an employee; (3) employee misclassification--inaccurately classifying an employee as an independent contractor, thereby avoiding tax liabilities and other obligations imposed by GS Chapters 95, 96, 97, or 105; and (4) employer--any entity or individual that employs one or more employees as in GS 95-276(a)(2) of this act.
Provides that nothing in new Article 4, GS Chapter 95, is to be construed or intended to alter the definition of employeror employeeunder any other provision of law.
Declares that the provisions of GS 95-280, enacted in this act, are intended to codify the North Carolina Supreme Court's holding inHayes v. Board of Trustees of Elon College,224 N.C. 11 (1994).
Provides the factors to be considered in determining whether an individual is an independent contractor for the purposes of new Article 4. Identifies the factors to be considered in determining independent contractor status. Provides that the presence of one or more factors is not controlling and that the presence of all the identified factors is not required to determine whether an individual is an independent contractor. Declares that other factors that are consistent with the opinion inHayes may also be considered in determining independent contractor status.
Establishes the Employee Misclassification Task Force (EMTF). Directs the Governor to appoint a director, as the chief executive officer of the EMTF, to serve a four-year term and devote full-time effort to the duties of the EMTF. Provides for the authority, duties, and responsibilities of the director. Provides that the director's salary is to be as provided in the Current Operations Appropriations Act. Provides that the appointment of the director is subject to confirmation by the General Assembly by joint resolution. Provides that the EMTF receive adequate funding to provide it with investigators and necessary staff to meet the duties of the EMTF as set out in this Article. Directs the Office of the State Controller to ensure that the EMTF is provided with all necessary access to the Government Data Analytic Center and other information technology services.
Delineates the powers and duties of the EMTF, which include investigating reports of employee misclassification and coordinating with and assisting all relevant state agencies with recovering any back taxes, wages, benefits, penalties, or other money owed as a result of an employer engaging in employee misclassification. Requires the director to appoint an informal advisory council to advise the director on issues within the jurisdiction of the EMTF.
Requires the EMTF to annually publish, no later than October 1 of each year, a report to the Governor and the Joint Legislative Commission on Governmental Operations on the administration of this Article, including any recommendations that the EMTF deems advisable. Provides information that the report must minimally include.
Prohibits employee misclassification. Provides additional civil penalties for repeated instances of employee misclassification. Provides that employers found by the EMTF to have engaged in employee misclassification have the right to appeal the final finding and any accompanying penalty. Employers may appeal either under GS Chapter 150B or by filing a petition in the superior court with jurisdiction over the matter. Declares that nothing in this section is to be construed as creating a private right of action, at law or in equity, for the activities prohibited in this section.
Directs the EMTF to establish and administer a temporary amnesty program to encourage voluntary self-reporting by employers who are currently engaging in employee misclassification. Confers immunity from the civil penalties provided for in GS 95-279 on every employer participating in the temporary amnesty program. Requires the EMTF to establish the procedures for participation in the temporary amnesty program and specifies what these procedures must minimally require.
Includes additional provisions regarding confidentiality and access to records and the responsibilities of occupational and licensing boards to certify that applicants have read and understood the employee misclassification notice set out in GS 95-278(a)(7).
Amends GS 95-25.15(c) to specify the content of the poster summarizing the major provisions of this Article that must be displayed in every establishment subject to this Article.
Amends GS 97-2 to delete the rebuttable presumption that "employee" does not include any person selling newspapers or magazines at a fixed price and amends GS 97-5.1 to delete the rebuttable presumption that taxi drivers are independent contractors.
Amends GS 153A-134 and GS 160A-194 to require that any applicant subject to regulation and licensure by a county or a city must certify that the applicant has read and understood the employee misclassification notice as provided by GS 95-278(a)(7).
Appropriates $293,000 from the General Fund to the Industrial Commission for the 2015-16 fiscal year and $293,000 for the 2016-17 fiscal year to support five new positions whose duties will include reviewing quarterly employer wage and earnings reports and comparing those to the Worker's Compensation insurance policies to detect fraud and employee misclassification. Requires the Industrial Commission to consult with the Department of Revenue, the Division of Employment Security of the Department of Commerce, and the Department of Labor in hiring staff for these positions.
Appropriates $17,500 for the 2015-16 fiscal year from the General Fund to the Industrial Commission for non-recurring costs associated with the positions authorized by this section.
Includes a severability clause to provide that if any provisions of the proposed act or its application are held to be unconstitutional or invalid, the invalidity does not affect other provisions or applications that can be given effect without the invalid or unconstitutional provisions or applications.
© 2021 School of Government The University of North Carolina at Chapel Hill
This work is copyrighted and subject to "fair use" as permitted by federal copyright law. No portion of this publication may be reproduced or transmitted in any form or by any means without the express written permission of the publisher. Distribution by third parties is prohibited. Prohibited distribution includes, but is not limited to, posting, e-mailing, faxing, archiving in a public database, installing on intranets or servers, and redistributing via a computer network or in printed form. Unauthorized use or reproduction may result in legal action against the unauthorized user.