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Regular Session, 2012
SENATE BILL NO. 472
BY SENATOR MURRAY
UNEMPLOYMENT COMP. Prohibits certain employees of staffing services from being
classified as independent contractors. (2/3-CA 7s2.1(A)) (8/1/12)
AN ACT1
To amend and reenact R.S. 23:1472(12)(E) and 1761(9) and to enact R.S. 23:1711(G),2
relative to unemployment compensation; to provide for employers' classification of3
workers; to provide for independent contractors; to provide for penalties; and to4
provide for related matters.5
Be it enacted by the Legislature of Louisiana:6
Section 1. 23:1472(12)(E) and 1761(9) are hereby amended and reenacted and R.S.7
23:1711(G) is hereby enacted to read as follows: 8
§1472. Definitions9
* * *10
(12) * * *11
E. (a) Services performed by an individual for wages or under any contract12
of hire, written or oral, express or implied, shall be deemed to be employment13
subject to this Chapter unless and until it is shown to the satisfaction of the14
administrator that;15
* * *16
(b) Services performed by an individual for a staffing service shall be17 SB NO. 472
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deemed to be employment subject to this Chapter. "Staffing service" means1
any person or entity, other than a professional employer organization as defined2
by R.S. 23:1761(7), that supplies workers to a client to support or supplement3
the client's workforce, including, but not by way of limitation, temporary4
staffing services and leasing companies that supply workers to clients in work5
situations such as employee absences, temporary worker shortages, seasonal6
workloads, special assignments and projects, and other similar work situations.7
* * *8
§1711. False statements or representations; failure to file reports or maintain9
records; duties of officers and agents; presumptive proof; penalties10
* * *11
G. Misclassification of employees as independent contractors12
(1)(a) If the administrator determines, after investigation, that an13
employer, or any officer, agent, superintendent, foreman, or employee of the14
employer, failed to properly classify an individual as an employee in accordance15
with this Chapter, and failed to pay contributions required by this Chapter, but16
the failure was not knowing or willful, the employer shall be assessed, in17
addition to any contributions, interest and penalties otherwise due, an18
administrative penalty not to exceed ten thousand dollars per employee, not to19
exceed a maximum penalty of twenty-five thousand dollars per audit. In20
determining the amount of the penalty imposed, the administrator shall21
consider factors including previous violations by the employer, the seriousness22
of the violation, the good faith of the employer, and the size of the employer's23
business.24
(b) If the administrator determines, after investigation, that an employer25
or any officer, agent, superintendent, foreman, or employee of the employer26
knowingly or willfully failed to properly classify any individual as an employee27
in accordance with this Chapter, and failed to pay contributions required by28
this Chapter, then the maximum administrative penalty assessed shall not29 SB NO. 472
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exceed twenty thousand dollars per employee, not to exceed a maximum penalty1
of fifty thousand dollars per audit.2
(c) If it can be determined that an employer has willfully and knowingly3
engaged in a pattern of systematic failure to properly classify individuals as4
employees, the employer also shall be subject to imprisonment for not less than5
thirty or more than ninety days, or both. Each employee so misclassified shall6
constitute a separate offense.7
(d) No such determination shall be final or effective, and no resulting8
administrative penalty shall be assessed, unless the administrator first provides9
the employer with written notification by certified mail of the determination,10
including the amount of the proposed contributions, interest and penalties11
determined to be due, and of the opportunity to request a fair hearing of which12
a record shall be made within ten days of the mailing of said notice. The13
hearing request may be made by mail, as evidenced by the official postmarked14
date, or by otherwise timely delivering such appeal. If the employer does not15
request a hearing within the ten-day period the determination shall become16
final and effective, and the contributions, interest, and penalties due shall be17
assessed.18
(2) If a timely hearing request is made, the findings and conclusions of19
the hearing officer shall be appealable by judicial review as a final assessment20
in accordance with the provisions of R.S. 23:1728.21
(3)(a) Upon a final determination that an employer or any officer, agent,22
superintendent, foreman, or employee of the employer knowingly or willfully23
failed to properly classify an individual as an employee in accordance with this24
Chapter and failed to pay required contributions, then, in addition to the25
penalties provided herein, the employer shall be prohibited from contracting,26
directly or indirectly, with any state agency or political subdivision of the state27
for a period of three years from the date upon which the determination becomes28
final.29 SB NO. 472
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(b) The division of administration shall maintain and place the employer1
on a list of such employers and make that list available to state agencies and2
political subdivisions of the state.3
(4) Notice requirements. Every employer shall post in a prominent and4
accessible location at each of its business premises a poster provided by the5
administrator that describes the responsibilities of independent contractors to6
pay taxes as required by state and federal laws, the rights of employees to7
workers' compensation and unemployment benefits, protections against8
retaliation and the penalties if the employer fails to properly classify an9
individual as an employee. The notice shall also contain contact information for10
individuals to file complaints or obtain information regarding employment11
classification.12
* * *13
§1761. Definitions14
As used in this Chapter, the following terms shall have the meanings15
hereinafter ascribed to them:16
* * *17
(9) "Staffing service" means any person or entity, other than a professional18
employer organization, that hires its own employees and assigns them supplies19
workers to a client to support or supplement the client's workforce. It includes20
temporary staffing services and leasing companies that supply employees to clients21
in special work situations such as employee absences, temporary skill worker22
shortages, seasonal workloads, and special assignments and projects, and other23
similar work situations.24
* * *25
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Carla S. Roberts.
DIGEST
Present law provides that services performed by an individual for wages or under any
contract of hire, written or oral, express or implied, shall be deemed to be employment, for SB NO. 472
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the purposes of unemployment insurance, unless and until it is shown to the satisfaction of
the administrator that all of the following are met:
1. Such individual has been and will continue to be free from any control or direction
over the performance of such services both under his contract and in fact.
2. Such service is either outside the usual course of the business for which such service
is performed, or that such service is performed outside of all the places of business
of the enterprise for which such service is performed.
3. Such individual is customarily engaged in an independently established trade,
occupation, profession or business.
Proposed law retains present law but provides that services performed by an individual for
a staffing service shall be deemed to be employment for the purposes of unemployment
insurance.
Present law defines "staffing service" as any person or entity that supplies workers to a client
to support or supplement the client's workforce, including temporary staffing services and
leasing companies that supply workers to clients in work situations such as employee
absences, temporary worker shortages, seasonal workloads, special assignments and
projects, and other similar work situations.
Proposed law provides that, if the administrator determines, after investigation, that an
employer failed to properly classify an individual as an employee and failed to pay
unemployment contributions but the failure was not knowing or willful, the employer shall
be assessed, in addition to any contributions, interest and penalties otherwise due, an
administrative penalty not to exceed $10,000 per employee, not to exceed $25,000 per audit.
Proposed law provides that, in determining the amount of the penalty imposed, the
administrator shall consider factors including previous violations by the employer, the
seriousness of the violation, the good faith of the employer, and the size of the employer's
business.
Proposed law provides that, if the administrator determines, after investigation, that an
employer knowingly or willfully failed to properly classify any individual as an employee
and failed to pay unemployment contributions then the maximum administrative penalty
assessed shall not exceed $20,000 per employee, not to exceed a maximum penalty of
$50,000 per audit.
Proposed law provides that, if it can be determined that an employer has willfully and
knowingly engaged in a pattern of systematic failure to properly classify individuals as
employees, the employer also shall be subject to imprisonment for not less than 30 days nor
more than 90 days. Each employee so misclassified shall constitute a separate offense.
Proposed law provides that no determination shall be final or effective, and no resulting
administrative penalty shall be assessed, unless the administrator first provides the employer
with written notification by certified mail of the determination, including the amount of the
proposed contributions, interest and penalties determined to be due, and of the opportunity
to request a fair hearing of which a record shall be made within 10 days of the mailing of the
notice. If the employer does not request a hearing within the 10-day period, the
determination shall become final and effective, and the contributions, interest, and penalties
due shall be assessed.
Proposed law provides that if a timely hearing request is made, the findings and conclusions
of the hearing officer shall be appealable by judicial review as a final assessment.
Proposed law provides that upon a final determination that an employer knowingly or SB NO. 472
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words in boldface type and underscored are additions.
willfully failed to properly classify an individual as an employee and failed to pay
unemployment, then the employer shall be prohibited from contracting with any state agency
or political subdivision of the state for a period of three years from the date upon which the
determination becomes final.
Proposed law provides that the division of administration shall maintain and place the
employer on a list of such employers and make that list available to state agencies and
political subdivisions of the state.
Proposed law provides that every employer shall post in a prominent and accessible location
at each of its business premises a poster provided by the administrator that describes the
responsibilities of independent contractors to pay taxes as required by state and federal laws,
the rights of employees to workers' compensation and unemployment benefits, protections
against retaliation, and the penalties if the employer fails to properly classify an individual
as an employee.
Proposed law provides that the notice shall also contain contact information for individuals
to file complaints or obtain information regarding employment classification.
Effective August 1, 2012
(Amends R.S. 23:1472(12)(E) and 1761(9); adds R.S. 23:1711(G))