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Bill > HF2371

IA HF2371

IA HF2371
A bill for an act prohibiting the misclassification of employees as independent contractors, providing penalties, and including applicability provisions.

summary

Introduced
02/08/2024
In Committee
02/08/2024
Crossed Over
Passed
Dead
04/16/2024

Introduced Session

90th General Assembly

Bill Summary

This bill prohibits an employer from willfully misclassifying an individual who performs services for the employer in return for remuneration as an independent contractor rather than an employee with the effect of denying the individual eligibility for an employment benefit provided by law or for a government program. Whether an individual performs services as an employee or independent contractor is determined under regulations or guidelines of the federal internal revenue service in effect as of the date of an alleged misclassification. The bill is enforced by the department of workforce development. An employer who violates this prohibition shall be subject to a civil penalty of up to $5,000 per misclassified individual for a first offense, up to $7,500 per misclassified individual for a second offense, and up to $10,000 per misclassified individual for each subsequent offense. The department shall provide written notice to an employer prior to imposition of a civil penalty. An employer may contest and seek judicial review of a determination of the department pursuant to Code chapter 17A. An employer shall bear the burden of proving that the employer did not misclassify an individual. Upon a final determination of the department that a violation occurred and the conclusion of the period for any appeals, the department shall bring an action in district court to collect the civil penalties for deposit in the general fund and refer the violation to a county attorney. A county attorney shall not be bound by any determination of the department. An employer who misclassifies an individual in violation of the bill commits a class “D” felony. A class “D” felony is punishable by confinement for no more than five years and a fine of at least $1,025 but not more than $10,245. The bill applies to misclassification of an individual by an employer occurring on or after the effective date of the bill.

AI Summary

This bill prohibits employers from willfully misclassifying individuals who perform services for the employer as independent contractors rather than employees, which would deny those individuals eligibility for employment benefits or government programs. The bill defines key terms like "employee," "independent contractor," and "misclassification." It imposes civil penalties on employers who violate this prohibition, ranging from $5,000 to $10,000 per misclassified individual, and allows employers to contest the department's determinations. The bill also makes it a class "D" felony for an employer to misclassify an individual in violation of the law. The Department of Workforce Development is tasked with enforcing the law and establishing necessary procedures and rules. The bill applies to misclassification that occurs on or after the effective date of the legislation.

Committee Categories

Labor and Employment

Sponsors (1)

Last Action

Introduced, referred to Labor and Workforce. H.J. 222. (on 02/08/2024)

Bill Topics

Labor and Employment
  • ‐ Fair Labor Standards
  • ‐ General Labor and Employment

bill text

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bill summary

Document Type Source Location Created
State Bill Page https://www.legis.iowa.gov/legislation/BillBook?ga=90&ba=HF2371 02/08/2024
BillText https://www.legis.iowa.gov/docs/publications/LGI/90/attachments/HF2371.html 02/08/2024
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