Michigan House Bill HB4390

Michigan 2023-2024 Regular Session

• Introduced: 4/12/23
• Refer: 4/12/23

Caption

Labor: hours and wages; penalties and remedies for misclassification of independent contractors; provide for. Amends secs. 1, 13, 15, 18 & 19 of 1978 PA 390 (MCL 408.471 et seq.) & adds secs. 13c & 13d.

Impact

This bill aims to enhance employees' rights by imposing stricter penalties on employers who fail to comply with payments of wages and benefits. Employers found in violation may face civil penalties up to $10,000, or significantly higher damages if the violations are flagrant or repeated. The establishment of a 'wages and fringe benefits fund,' from which the funds can be allocated for enforcement, further emphasizes the bill's focus on protecting employee rights and ensuring compliance in labor practices. It also allows the state to take more active enforcement measures against non-compliant employers.

Summary

House Bill 4390 proposes amendments to the 1978 PA 390, which regulates the payment of wages and fringe benefits, the rights and responsibilities of employers and employees, and allows for the settlement of related disputes. Notably, the bill extends the definitions and protections surrounding employee classification, particularly focusing on the treatment of independent contractors. It specifies that a person cannot classify or treat an employee as an independent contractor unless they can prove that this classification is appropriate, thus aiming to combat misclassification.

Contention

There may be points of contention surrounding the definitions of 'independent contractor' versus 'employee,' as the bill places the burden of proof on employers when misclassifications are alleged. Critics may argue that this could deter businesses from hiring independent contractors due to the increased administrative burden and potential for penalties. Meanwhile, proponents believe it is essential to ensure fair treatment of all workers and hold employers accountable for intentional misclassification, thereby fostering a more equitable workforce.