Amendment #563 to H3400

Clarify the Definition of Independent Contractor

Representatives O'Connell of Taunton, DeCoste of Norwell, Lombardo of Billerica and Mirra of West Newbury move to amend the bill by adding the following section:-

“SECTION XXXX. Paragraph (a) of Section 148B of Chapter 149 of the General Laws, as appearing in the 2012 Official Edition, is hereby amended by striking out paragraph (a) and inserting in place thereof the following paragraph:—

(a) (1) any person performing services for a contractor shall be classified as an employee unless the person is a separate business entity under subparagraph (2) of this section or all of the following criteria are met, in which case the person shall be an independent contractor:

(a) the person is free from control and direction in performing the job, both under the contract and in fact;

(b) the service is performed outside the usual course of business of the contractor for which the service is performed; and

(c) the person is customarily engaged in an independently established trade, occupation, profession, or business that is similar to the service at issue.

(2) a business entity, including any sole proprietor, partnership, corporation or entity that may be a contractor under this section shall be considered a separate business entity from the contractor where all the following criteria are met:

(a) the business entity is performing the service free from the direction or control over the means and manner of providing the service, subject only to the right of the contractor for whom the service is provided to specify the desired result;

(b) the business entity is not subject to cancellation or destruction upon severance of the relationship with the contractor;

(c) the business entity has a substantial investment of capital or education or experience or knowledge in the business entity beyond ordinary tools and equipment and a personal vehicle;

(d) the business entity owns the capital goods and gains the profits and bears the losses of the business entity;

(e) the business entity makes its services available to the general public or the business community on a continuing basis;

(f) the business entity includes services rendered on a federal income tax schedule as an independent business or profession;

(g) the business entity performs services for the contractor under the business entity's name;

(h) when the services being provided require a license or permit, the business entity obtains and pays for the license or permit in the business entity's name;

(i) the business entity furnishes the tools and equipment necessary to provide the service;

(j) if necessary, the business entity hires its own employees without contractor approval, pays the employees without reimbursement from the contractor and reports the employees' income to the internal revenue service;

(k) the contractor does not represent the business entity as an employee of the contractor to its customers; and

(l) the business entity has the right to perform similar services for others on whatever basis and whenever it chooses.”