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Bill > HF348
IA HF348
IA HF348A bill for an act prohibiting the misclassification of employees as independent contractors, providing penalties, and including applicability provisions.
summary
Introduced
02/12/2025
02/12/2025
In Committee
02/12/2025
02/12/2025
Crossed Over
Passed
Dead
Introduced Session
91st 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 establishes a comprehensive framework to prevent employers from improperly classifying workers as independent contractors instead of employees, which can deny workers important legal protections and benefits. The legislation defines misclassification as categorizing a worker as an independent contractor contrary to federal Internal Revenue Service (IRS) guidelines, with the effect of denying the individual employment benefits or access to government programs. Under the bill, employers who willfully misclassify workers face escalating civil penalties of up to $5,000 for a first offense, $7,500 for a second offense, and $10,000 for subsequent offenses per misclassified worker. Additionally, employers who misclassify workers can be charged with a class "D" felony, which carries potential imprisonment of up to five years and fines between $1,025 and $10,245. The Department of Workforce Development is tasked with enforcing these provisions, including providing employers with written notice before imposing penalties and having the authority to bring actions in district court to collect penalties. The bill places the burden of proof on employers to demonstrate that they did not misclassify workers, and it applies to worker misclassifications occurring on or after the bill's effective date. The legislation aims to protect workers' rights and ensure they receive appropriate employment classifications and associated legal protections.
Committee Categories
Labor and Employment
Sponsors (1)
Last Action
Introduced, referred to Labor and Workforce. H.J. 303. (on 02/12/2025)
Official Document
bill text
bill summary
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bill summary
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bill summary
| Document Type | Source Location |
|---|---|
| State Bill Page | https://www.legis.iowa.gov/legislation/BillBook?ga=91&ba=HF348 |
| BillText | https://www.legis.iowa.gov/docs/publications/LGI/91/attachments/HF348.html |
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