Priorities, Analysis

Misclassification

This remains a huge issue for legislative and executive branch officials as the 2018 legislative session begins to unfold.  Ellis Mills, along with a summer working group, assisted the Vermont Department of Labor (VTDOL) and the Vermont Department of Financial Regulation (VTDFR) in drafting guidance regarding misclassification, which was finally issued late last month. The guidance extends the ruling for the Bourbeau case (which determined a single member LLC qualifies as an independent contractor for purposes of unemployment insurance) to include workers’ compensation insurance. VTDFR has issued this guidance to insurance carriers across the state.

Even though the guidance is an encouraging interim fix for our members and allies, there is still a desire among legislators and relevant state agencies (and certainly among Vermont homebuilders/remodelers) for a clear and emphatic legislative “fix” for the misclassification issue.

BILL	BILL STATUS	SPONSOR	NOTES
H.119	https://legislature.vermont.gov/bill/status/2018/H.119	Scheurmann	This bill proposes to establish a common definition of “independent contractor” for the workers’ compensation and unemployment insurance statutes. Doesn’t use the totality of the circumstance, instead it allows for any two circumstances out of the list to qualify someone as an I.C
H.223	https://legislature.vermont.gov/assets/Documents/2018/Docs/BILLS/H-0223/H-0223%20As%20Introduced.pdf	Poirier	This bill proposes to amend the definitions related to independent contractors in the workers’ compensation and unemployment insurance laws. Tracks closely with FLSA.
H.323	https://legislature.vermont.gov/bill/status/2018/H.323	Hooper	This bill proposes to amend definitions related to independent contractors in the workers’ compensation and unemployment compensation statutes.
H.574	https://legislature.vermont.gov/bill/status/2018/H.574	Poirier	This bill proposes to amend definitions related to independent contractors in the workers’ compensation and unemployment compensation statutes. Track closely with FLSA and attempts to close the person vs individual LLC loophole.
H.681	https://legislature.vermont.gov/bill/status/2018/H.681	O’Sullivan	This bill proposes to provide for notice at worksites of the requirements regarding employee classification; permit the Department of Labor to enter an employer’s premises for the purposes of investigating compliance with the workers’ compensation and unemployment compensation laws; permit the Department to obtain an injunction to enforce a stop-work order related to a violation of the workers’ compensation law; It also transfers misclassification enforcement to the Attorney General’s office.
S.73	https://legislature.vermont.gov/bill/status/2018/S.73	Sirotkin	This bill proposes to create an interagency commission to investigate, evaluate, and address the negative impacts from employee misclassification in Vermont on workers’ compensation rates, unemployment insurance contributions, and State tax revenues.
S.141	https://legislature.vermont.gov/bill/status/2018/S.141	Rodgers	This bill proposes to establish a common definition of “independent contractor” for the workers’ compensation and unemployment insurance statutes. Tracks closely with FLSA.

It’s worth highlighting a couple of the bills listed above.  H.574 is the newest iteration of a misclassification bill, introduced by Rep. Paul Poirier (I-Barre). It tracks closely with pending misclassification bills that use the FLSA standard but it also attempts to close the LLC loophole exposed by the Bourbeau Supreme Court case.

H.681 is also a bill that would provide even more potent enforcement powers to the VTDOL.  In addition, H.681 proposes to spread enforcement power to the Vermont Attorney General’s office.  The AG’s consumer protection office has increasingly focused on contractors/homebuilders in recent years and H.681 is yet another chance for them to scrutinize Vermont small businesspeople (the AG’s office was the driving force behind the Sunrise Review discussed later in this report).

In addition to misclassification, HBRANVT will be actively engaged in the following issues before the Vermont General Assembly:

Sunrise Review, Contractor Certification

Senate Committee on Government Operations reviewed a preliminary sunrise assessment for identifying the need to regulate home improvement and construction contractors. The Office of Professional Regulation (OPR) did not recommend full licensure, but does recommend the following:

1) Mandatory, minimally intrusive registration for providers of residential home-improvement services, that work above a specified monetary level, and

2) Voluntary, State-backed certification, benefitting those practitioners wishing to distinguish themselves in the marketplace, and those consumers seeking verified skills.

The recommended registration fee is $100 per year. Registration requirements would be the same requirements that all professionals must comply with (taxes, child support) but would not attach a level of qualification to perform the work.  In addition, the recommendation to include a voluntary State-backed certification that would add another level of confidence for consumers seeking information on who they hire to work on their home.

Stormwater

Last year, the bill to reduce the threshold on operational stormwater permits (H.39) made it out of the House Natural Resources Committee in time for the cross-over deadline on a 7-3-1 vote. Because it involves revenue, it was then committed to the House Ways and Means Committee. They discussed it only briefly and it squeaked by with a 6-5 vote. The decision was made not to release it to the floor with such a weak committee vote, so it's fate is now uncertain. It is not slated for discussion in the next couple of weeks, but we are monitoring it closely as water quality remains a major focus of the Vermont legislature.