Wednesday, April 08, 2009
Employee Misclassification Bill Passes Both Houses
The employee misclassification bill has passed both chambers of the Maryland General Assembly (SB 909/HB819). The bills are currently being considered in the opposite chamber.
The legislation would increase penalties for employers who misclassify employees as independent contractors. The Maryland Chamber opposes this legislation. While we condemn any business that intentionally misclassifies employees as independent contractors, we raised several concerns about unintended consequences during the debate on these two bills. Concerns we raised included:
- The presumption that anyone who works for an employer is an employee, with testing requirements for independent contractor status being more stringent than other employment laws such as worker’s compensation, discrimination, tax, and labor relations.
- The provision of a right to private action (the ability to sue) with a damages provision that would create a tremendous incentive for plaintiffs to bring lawsuits directly rather than proceeding through DLLR, which would have a significant negative impact on small businesses in particular.
- There appears to be no administrative remedy for dispute resolution prior to court action.
- The timeframes for providing employee information to the Labor and Licensing Commissioner are too short and the document production requirements are too burdensome on business.
For more information, contact Allyson Black at .(JavaScript must be enabled to view this email address).
