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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.2
23:1472(12)(H)(XXII) and 1711(G), relative to unemployment compensation; to3
provide for employers' classification of workers; to provide for independent4
contractors; to provide for penalties; and to provide for related matters.5
Be it enacted by the Legislature of Louisiana:6
Section 1. R.S. 23:1472(12)(E) and 1761(9) are hereby amended and reenacted and7
R.S. 23:1472(12)(H)(XXII) and 1711(G) are 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
H. The term "employment" shall not include:9
* * *10
XXII. The services performed by an individual who meets the definition11
of an owner-operator as is defined in R.S. 23:1021(10).12
* * *13
§1711. False statements or representations; failure to file reports or maintain14
records; duties of officers and agents; presumptive proof; penalties15
* * *16
G. Misclassification of employees as independent contractors17
(1)(a) Written warning. If the administrator determines, after18
investigation, that an employer, or any officer, agent, superintendent, foreman,19
or employee of the employer, failed to properly classify an individual as an20
employee in accordance with this Chapter, and failed to pay contributions21
required by this Chapter, but the failure was not knowing or willful, the22
employer shall be issued a written warning as evidence that the employer has23
been cited for a first offense of misclassification. Such warning shall constitute24
a determination that any workers identified therein are employees, and all25
resulting contributions, interest and penalties shall be due, and shall be26
appealable as provided in this Section. However, no administrative penalties27
shall be due.28
(b) Administrative penalties. If the administrator determines, after29 SB NO. 472
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investigation, that an employer, or any officer, agent, superintendent, foreman,1
or employee of the employer, after June 30, 2013, and subsequent to the2
issuance of a written warning, failed to properly classify an individual as an3
employee and failed to pay contributions in accordance with this Chapter, then,4
in addition to any contributions, interest and penalties otherwise due, an5
administrative penalty of not more than two hundred fifty dollars per each such6
individual. Thereafter, any such failure by an employer to properly classify an7
individual as an employee and pay contributions due shall be subject to a8
penalty of not more than five hundred dollars per each such individual. In9
determining the amount of the penalty imposed, the administrator shall10
consider factors including previous violations by the employer, the seriousness11
of the violation, the good faith of the employer, and the size of the employer's12
business.13
(c) If, after an employer has been issued a written warning and14
subsequently found, on two or more separate occasions, to have failed to15
properly classify an individual as an employee, the employer may also be16
subject to an additional fine of not less than one hundred dollars nor more than17
one thousand dollars, or imprisoned for not less than thirty days nor more than18
ninety days, or both. For the purpose of this Subsection, each employee so19
misclassified shall constitute a separate offense.20
(d) No such determination shall be final or effective, and no resulting21
administrative penalty shall be assessed, unless the administrator first provides22
the employer with written notification by certified mail of the determination,23
including the amount of the proposed contributions, interest and penalties24
determined to be due, and of the opportunity to request a fair hearing of which25
a record shall be made within ten days of the mailing of said notice. The26
hearing request may be made by mail, as evidenced by the official postmarked27
date, or by otherwise timely delivering such appeal. If the employer does not28
request a hearing within the ten-day period the determination shall become29 SB NO. 472
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final and effective, and the contributions, interest, and penalties due shall be1
assessed.2
(2) If a timely hearing request is made, the findings and conclusions of3
the hearing officer shall be appealable by judicial review as a final assessment4
in accordance with the provisions of R.S. 23:1728.5
(3)(a) Upon a final determination that an employer or any officer, agent,6
superintendent, foreman, or employee of the employer knowingly or willfully7
failed to properly classify an individual as an employee in accordance with this8
Chapter and failed to pay required contributions, then, in addition to the9
penalties provided herein, the employer shall be prohibited from contracting,10
directly or indirectly, with any state agency or political subdivision of the state11
for a period of three years from the date upon which the determination becomes12
final.13
(b) The division of administration shall maintain and place the employer14
on a list of such employers and make that list available to state agencies and15
political subdivisions of the state.16
(4) Notice requirements. Every employer shall post in a prominent and17
accessible location at each of its business premises a poster provided by the18
administrator that describes the responsibilities of independent contractors to19
pay taxes as required by state and federal laws, the rights of employees to20
workers' compensation and unemployment benefits, protections against21
retaliation and the penalties if the employer fails to properly classify an22
individual as an employee. The notice shall also contain contact information for23
individuals to file complaints or obtain information regarding employment24
classification.25
* * *26
§1761. Definitions27
As used in this Chapter, the following terms shall have the meanings28
hereinafter ascribed to them:29 SB NO. 472
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* * *1
(9) "Staffing service" means any person or entity, other than a professional2
employer organization, that hires its own employees and assigns them supplies3
workers to a client to support or supplement the client's workforce. It includes4
temporary staffing services and leasing companies that supply employees to clients5
in special work situations such as employee absences, temporary skill worker6
shortages, seasonal workloads, and special assignments and projects, and other7
similar work situations.8
* * *9
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Carla S. Roberts.
DIGEST
Murray (SB 472)
Present law provides that services performed by an individual for wages or under any
contract of hire, written or oral, express or implied, will be deemed to be employment, for
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 will be deemed to be employment for the purposes of unemployment
insurance.
Proposed 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 will
be issued a written warning as evidence that the employer has been cited for a first offense
of misclassification. No administrative penalty shall be assessed. SB NO. 472
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Proposed law further provides that, if the administrator determines, after investigation, that
an employer, or any officer, agent, superintendent, foreman, or employee of the employer,
after 6/30/13 and subsequent to the issuance of a written warning, failed to properly classify
an individual as an employee and failed to pay contributions in accordance with the law then
an administrative penalty of up to $250 per individual shall be assessed. Thereafter, any
misclassification shall be subject to a penalty of up to $500 per individual.
Proposed law provides that, in determining the amount of the penalty imposed, the
administrator will 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, after an employer has been issued a written warning and
subsequently found, on two or more separate occasions, to have failed to properly classify
an individual as an employee, the employer may also be subject to an additional fine of not
less than $100 nor more than $1,000, or imprisoned for not less than 30 days nor more than
90 days, or both.
Proposed law provides that, for the purpose of misclassification, each employee so
misclassified will constitute a separate offense.
Proposed law provides that no determination will be final or effective, and no resulting
administrative penalty will 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 will 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 will become final and effective, and the contributions, interest, and penalties
due will be assessed.
Proposed law provides that if a timely hearing request is made, the findings and conclusions
of the hearing officer will be appealable by judicial review as a final assessment.
Proposed law provides that upon a final determination that an employer knowingly or
willfully failed to properly classify an individual as an employee and failed to pay
unemployment, then the employer will 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 will 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 will 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 will also contain contact information for individuals
to file complaints or obtain information regarding employment classification.
Proposed law exempts from the statutory requirements of unemployment misclassification
owner operators. Proposed law defines owner operators as a person who provides trucking
transportation services under written contract to a common carrier, contract carrier, or
exempt haulers which transportation services include the lease of equipment or a driver to
the common carrier, contract carrier, or exempt hauler. SB NO. 472
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Effective August 1, 2012
(Amends R.S. 23:1472(12)(E) and 1761(9); adds R.S. 23:1472(12)(H)(XXII) and 1711(G))
Summary of Amendments Adopted by Senate
Committee Amendments Proposed by Senate Committee on Labor and Industrial
Relations to the original bill
1. Adds a requirement for the department to issue a warning letter to an
employer who did not knowingly misclassify an employee.
2. Lowers penalty amounts and adds possible prison time..
3. Exempts owner-operators of trucking companies.