SB 276

Under current law, for purposes of coverage under the worker's compensation

law, an independent contractor is not an employee of an employer for whom the

independent contractor performs work if the independent contractor: 1) maintains

a separate business with his or her own office, equipment, materials, and other

facilities; 2) holds a federal employer identification number or has filed business or

self-employment income tax returns based on that work; 3) operates under contracts

to perform specific work for specific amounts of money and under which he or she

controls the means of performing the work; 4) incurs the main expenses related to

the work; 5) is responsible for the satisfactory completion of the work and is liable

for a failure to complete the work; 6) receives compensation on a commission, per job,

or competitive bid basis; 7) may realize a profit or suffer a loss; 8) has continuing or

recurring business liabilities or obligations; and 9) succeeds or fails depending on the

relationship of business receipts to expenditures.

This bill, in addition, excludes from coverage under the worker's compensation

law an independent contractor who: 1) has signed a written agreement with the

employer for whom he or she performs work stating that he or she is performing the

work as an independent contractor; 2) performs the work primarily at his or her own

residence and primarily using his or her own tools and equipment; and performs the

work free from the control or direction of the employer, other than control or direction

provided for purposes of initial training or quality control. The bill provides that, for

purposes of the bill, "primarily" means 75 percent or more.

Currently, under the unemployment insurance (UI) law, coverage for services

performed by an individual is dependent in part upon whether the individual is an

"employee," which the UI law defines as any individual who is or has been performing

services for pay for an employing unit, whether or not the individual is paid directly

by the employing unit, subject to certain exceptions. One such exception is that an

individual performing services for an employing unit other than a government unit

or nonprofit organization in a capacity other than as a logger or trucker is not

considered an employee if the individual meets the following criteria: 1) the services

of the individual are performed free from control or direction by the employing unit

over the performance of his or her services, as determined by considering various

factors, including five specified in current law; and 2) the individual meets six or

more of nine specified conditions related to the nature of his or her work. An

employing unit is not required to pay UI contributions (taxes) on wages earned by

an individual not considered an employee under the UI law, and the individual's

wages may not be counted as base period wages for purposes of determining

eligibility for UI benefits.

This bill creates another exception from the definition of employee under the

UI law, which applies to an individual performing services for an employing unit

other than a government unit, nonprofit organization, or Indian tribe in a capacity