REPORT TITLE:
Independent Contractor; Empl


DESCRIPTION:
Changes standard for determination of independent contractor
status to that followed in IRS regulations for purposes of
several state labor laws.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
HOUSE OF REPRESENTATIVES                H.B. NO.482        
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
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                   A  BILL  FOR  AN  ACT

RELATING TO EMPLOYMENT.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  Chapter 383, Hawaii Revised Statutes, is amended
 
 2 by adding a new section to be appropriately designated and to
 
 3 read as follows:
 
 4      "§383-     Independent contractor.  In determining whether a
 
 5 person is an independent contractor or an employee for the
 
 6 recipient of services, the parties shall use the guidelines set
 
 7 forth in Revenue Ruling 87-41.  If the person performs services
 
 8 for the recipient of services which are reasonably encompassed
 
 9 under a license, certificate of authority, or trade name
 
10 registration filed with the department of commerce and consumer
 
11 affairs or with the judiciary, then the burden shall be on the
 
12 person to produce substantial evidence to the contrary to rebut
 
13 the presumption that the person performed those services as an
 
14 independent contractor.  Otherwise, the burden shall be on the
 
15 recipient of services to produce substantial evidence to the
 
16 contrary to rebut the presumption that the person performed those
 
17 services as an employee."
 
18      SECTION 2.  Chapter 386, Hawaii Revised Statutes, is amended
 
19 by adding a new section to be appropriately designated and to
 

 
Page 2                                                     
                                     H.B. NO.           
                                                        
                                                        

 
 1 read as follows:
 
 2      "§386-     Independent contractor.  In determining whether a
 
 3 person is an independent contractor or an employee for the
 
 4 recipient of services, the parties shall use the guidelines set
 
 5 forth in Revenue Ruling 87-41.  If the person performs services
 
 6 for the recipient of services  which are reasonably encompassed
 
 7 under a license, certificate of authority, or trade name
 
 8 registration filed with the department of commerce and consumer
 
 9 affairs or with the judiciary, then the burden shall be on the
 
10 person to produce substantial evidence to the contrary to rebut
 
11 the presumption that the person performed those services as an
 
12 independent contractor.  Otherwise, the burden shall be on the
 
13 recipient of services to produce substantial evidence to the
 
14 contrary to rebut the presumption that the person performed those
 
15 services as an employee."
 
16      SECTION 3.  Chapter 392, Hawaii Revised Statutes, is amended
 
17 by adding a new section to be appropriately designated and to
 
18 read as follows:
 
19      "§392-     Independent contractor.  In determining whether a
 
20 person is an independent contractor or an employee for the
 
21 recipient of services, the parties shall use the guidelines set
 
22 forth in Revenue Ruling 87-41.  If the person performs services
 
23 for the recipient of services  which are reasonably encompassed
 

 
Page 3                                                     
                                     H.B. NO.           
                                                        
                                                        

 
 1 under a license, certificate of authority, or trade name
 
 2 registration filed with the department of commerce and consumer
 
 3 affairs or with the judiciary, then the burden shall be on the
 
 4 person to produce substantial evidence to the contrary to rebut
 
 5 the presumption that the person performed those services as an
 
 6 independent contractor.  Otherwise, the burden shall be on the
 
 7 recipient of services to produce substantial evidence to the
 
 8 contrary to rebut the presumption that the person performed those
 
 9 services as an employee."
 
10      SECTION 4.  Section 383-6, Hawaii Revised Statutes, is
 
11 repealed.
 
12      ["§383-6 Master and servant relationship, not required
 
13 when.  Services performed by an individual for wages or under any
 
14 contract of hire shall be deemed to be employment subject to this
 
15 chapter irrespective of whether the common law relationship of
 
16 master and servant exists unless and until it is shown to the
 
17 satisfaction of the department of labor and industrial relations
 
18 that:
 
19      (1)  The individual has been and will continue to be free
 
20           from control or direction over the performance of such
 
21           service, both under the individual's contract of hire
 
22           and in fact; and
 
23      (2)  The service is either outside the usual course of the
 

 
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                                     H.B. NO.           
                                                        
                                                        

 
 1           business for which the service is performed or that the
 
 2           service is performed outside of all the places of
 
 3           business of the enterprise for which the service is
 
 4           performed; and
 
 5      (3)  The individual is customarily engaged in an
 
 6           independently established trade, occupation,
 
 7           profession, or business of the same nature as that
 
 8           involved in the contract of service."]
 
 9      SECTION 5.  This Act does not affect rights and duties that
 
10 matured, penalties that were incurred, and proceedings that were
 
11 begun, before its effective date.
 
12      SECTION 6.  Statutory material to be repealed is bracketed.
 
13 New statutory material is underscored.
 
14      SECTION 7.  This Act shall take effect upon its approval.
 
15 
 
16                           INTRODUCED BY:  _______________________