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General Assembly Raised Bill No. 955
January Session, 2019
LCO No. 4843
Referred to Committee on LABOR AND PUBLIC EMPLOYEES
Introduced by:
(LAB)
AN ACT CLARIFYING EXISTING LAW REGARDING DIRECT SEL LERS
AND INDEPENDENT CONT RACTORS.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. Subdivision (5) of subsection (a) of section 31-222 of the 1
general statutes is repealed and the following is substituted in lieu 2
thereof (Effective October 1, 2019): 3
(5) No provision of this chapter, except section 31-254, shall apply to 4
any of the following types of service or employment, except when 5
voluntarily assumed, as provided in section 31-223: 6
(A) Service performed by an individual in the employ of such 7
individual's son, daughter or spouse, and service performed by a child 8
under the age of eighteen in the employ of such child's father or 9
mother; 10
(B) Service performed in the employ of the United States 11
government, any other state, any town or city of any other state, or any 12
political subdivision or instrumentality of any of them; except that, to 13
the extent that the Congress of the United States permits states to 14
require any instrumentalities of the United States to make 15 Raised Bill No. 955
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contributions to an unemployment fund under a state unemployment 16
compensation law, all of the provisions of this chapter shall be 17
applicable to such instrumentalities and to services performed for such 18
instrumentalities; provided, if this state is not certified for any year by 19
the Secretary of Labor under Section 3304 of the Federal Internal 20
Revenue Code, the contributions required of such instrumentalities 21
with respect to such year shall be refunded by the administrator from 22
the fund in the same manner and within the same period as is 23
provided in sections 31-269, 31-270 and 31-271 with respect to 24
contributions erroneously collected; 25
(C) Service with respect to which unemployment compensation is 26
payable under an unemployment compensation plan established by an 27
Act of Congress, provided the administrator is authorized to enter into 28
agreements with the proper agencies under such Act of Congress, to 29
provide reciprocal treatment to individuals who have, after acquiring 30
potential rights to benefits under this chapter, acquired rights to 31
unemployment compensation under such Act of Congress, or who 32
have, after acquiring potential rights to unemployment compensation 33
under such Act of Congress, acquired rights to benefits under this 34
chapter, and provided further, in computing benefits the administrator 35
shall disregard all wages paid by employers who fall within the 36
definition of "employer" in Section 1(a) of the Federal Railroad 37
Unemployment Insurance Act; 38
(D) Service performed in this state or elsewhere with respect to 39
which contributions are required and paid under an unemployment 40
compensation law of any other state; 41
(E) Service not in the course of the employer's trade or business 42
performed in any calendar quarter by an employee, unless the cash 43
remuneration paid for such service is fifty dollars or more and such 44
service is performed by an individual who is regularly employed by 45
such employer to perform such service. For purposes of this 46
subparagraph, an individual shall be deemed to be regularly 47
employed by an employer during a calendar quarter only if (i) on each 48 Raised Bill No. 955
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of some twenty-four days during such quarter such individual 49
performs for such employer for some portion of the day service not in 50
the course of the employer's trade or business; or (ii) such individual 51
was so employed by such employer in the performance of such service 52
during the preceding calendar quarter; 53
(F) Service performed in any calendar quarter in the employ of any 54
organization exempt from income tax under Section 501(a) of the 55
Internal Revenue Code or under Section 521 of said code excluding 56
any organization described in Section 401(a) of said code, if the 57
remuneration for such service is less than fifty dollars; 58
(G) Service performed in the employ of a school, college, or 59
university if such service is performed (i) by a student who is enrolled 60
and is regularly attending classes at such school, college or university, 61
or (ii) by the spouse of such a student, if such spouse is advised at the 62
time such spouse commences to perform such service, that (I) the 63
employment of such spouse to perform such service is provided under 64
a program to provide financial assistance to such student by such 65
school, college or university, and (II) such employment will not be 66
covered by any program of unemployment insurance; 67
(H) Service performed as a student nurse in the employ of a hospital 68
or a nurses' training school chartered pursuant to state law by an 69
individual who is enrolled and is regularly attending classes in such 70
nurses' training school, and service performed as an intern in the 71
employ of a hospital by an individual who has completed a four years' 72
course in a medical school chartered or approved pursuant to state 73
law; 74
(I) Service performed by an individual under the age of eighteen in 75
the delivery or distribution of newspapers or shopping news, not 76
including delivery or distribution to any point for subsequent delivery 77
or distribution; 78
(J) Service performed by an individual who is enrolled, at a 79
nonprofit or public educational institution which normally maintains a 80 Raised Bill No. 955
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regular faculty and curriculum and normally has a regularly organized 81
body of students in attendance at the place where its educational 82
activities are carried on, as a student in a full-time program, taken for 83
credit at such institution, which combines academic instruction with 84
work experience, if such service is an integral part of such program, 85
and such institution has so certified to the employer, except that this 86
subparagraph shall not apply to service performed in a program 87
established for or on behalf of an employer or group of employers; 88
(K) Service performed by an individual as an insurance agent, other 89
than an industrial life insurance agent, and service performed by an 90
individual as a real estate salesperson, if all such service is performed 91
for remuneration solely by way of commission; 92
(L) Service performed in the employ of a hospital, if such service is 93
performed by a patient of the hospital, as defined in subsection (h) of 94
this section; 95
(M) Service performed by an individual in the employ of any town, 96
city or other political subdivision, provided such service is performed 97
in lieu of payment of any delinquent tax payable to such town, city or 98
other political subdivision; 99
(N) Service performed by an individual as an outside sales 100
representative of a for-profit travel agency if substantially all of such 101
service is performed outside of any travel agency premises, and all 102
such service is performed for remuneration solely by way of 103
commission. For purposes of this subparagraph, an "outside sales 104
representative" means an individual whose services to a for-profit 105
travel agency are performed under such travel agency's Airlines 106
Reporting Corporation accreditation, or the International Airlines 107
Travel Agent Network endorsement; 108
(O) Service performed by the operator of an escort motor vehicle, 109
for an oversize vehicle, overweight vehicle or a vehicle with a load 110
traveling upon any Connecticut highway pursuant to a permit 111
required by section 14-270, and the regulations adopted pursuant to 112 Raised Bill No. 955
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said section, provided the following conditions are met: 113
(i) The service is provided by an individual operator who is 114
engaged in the business or trade of providing such escort motor 115
vehicle; 116
(ii) The operator is, and has been, free from control and direction by 117
any other business or other person in connection with the actual 118
performance of such services; 119
(iii) The operator owns his or her own vehicle, and statutorily 120
required equipment, and exclusively employs this equipment in 121
providing such services; and 122
(iv) The operator is treated as an independent contractor for all 123
purposes, including, but not limited to, federal and state taxation, 124
workers' compensation, choice of hours worked and choice to accept 125
referrals from multiple entities without consequence; [and] 126
(P) Service performed by the operator of a motor vehicle 127
transporting property or capable of carrying eight passengers or more, 128
including the driver, for compensation pursuant to an agreement with 129
a contracting party, provided the following conditions are met: 130
(i) The motor vehicle has a gross vehicle weight rating in excess of 131
ten thousand pounds or six thousand pounds for passenger transport; 132
(ii) The operator owns such motor vehicle or holds it under a bona 133
fide lease arrangement, provided any lease arrangement, loan or loan 134
guarantee is commercially reasonable and is not with the contracting 135
party or any related entity. For purposes of this subparagraph, a lease 136
arrangement, loan or loan guarantee shall be commercially reasonable 137
if it is on terms equal to terms available in a trucking equipment 138
purchase or lease in customary and usual retail transactions generally 139
available in the state; 140
(iii) The operator's compensation is based on factors, which may 141
include, but not be limited to, mileage-based rates, a percentage of any 142 Raised Bill No. 955
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schedule of rates or by the hours or time expended in relation to actual 143
performance of the service contracted for or an agreed upon flat fee; 144
(iv) The operator may refuse to work without consequence and may 145
accept work from multiple contracting entities in compliance with 146
statutory and regulatory limitations without consequence. The service 147
performed by the operator shall satisfy the requirements of 148
subparagraph (B)(ii) of subdivision (1) of subsection (a) of this section, 149
except that the administrator shall not find that the operator is an 150
employee of the contracting party solely because such operator 151
chooses to perform services only for such contracting party; and 152
(v) The provisions of this subparagraph shall not affect the 153
applicability of any provision of chapter 229; and 154
(Q) Services performed by a direct seller, as defined in subdivision 155
(2) of subsection (b) of section 3508 of the Internal Revenue Code of 156
1986, or any subsequent corresponding internal revenue code of the 157
United States, as amended from time to time. 158
This act shall take effect as follows and shall amend the following
sections:
Section 1 October 1, 2019 31-222(a)(5)
Statement of Purpose:
To exempt individual direct sellers from unemployment compensation
coverage.
[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline,
except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is
not underlined.]