(The Center Square) – A Louisiana House committee approved a bill Thursday that seeks to change how state officials deal with employers that improperly classify their employees as independent contractors.
Employers pay taxes into the unemployment trust fund based on their employee payroll. Claiming that your employees are contract workers allows an employer to dodge those taxes, forcing companies that play by the rules to shoulder more of the burden to support the fund, some lawmakers and officials said.
House Bill 705 by Columbia Republican Rep. Neil Riser is awaiting a vote in the Senate. It would enhance penalties for misclassification and establish criteria to define who is or isn’t an employee. Penalties would be waived for a first offense if the employer gets into compliance within 60 days.
The House Labor and Industrial Relations Committee advanced Senate Bill 224 by Sen. Jay Luneau, an Alexandria Democrat, on Thursday. It is a companion bill to set up an “amnesty program” for employers that want to get into compliance. The program would be open to employers that come forward voluntarily and those that regulators catch.
Employers would be eligible for amnesty only after their first offense.
“It’s a one-time deal,” Luneau said.
Employers still could be liable for back wages and taxes but not for potential fines. The stated goal is to help employers who have made honest mistakes rather than penalize them, which was a necessary condition for the business lobby’s support.
The proposals came out of a task force set up last year to study the issue. Business and labor advocates support the bills, which is not a common sight at the Capitol.
The committee also advanced House Bill 180 by Rep. Jonathan Goudeau, R-Lafayette. It is intended to set up another method to make sure unemployed workers are seeking jobs as required to receive unemployment benefits.
Employers would be able to report claimants who twice fail to show up to scheduled interviews without being able to show a good reason. Those claimants could lose their benefits, though the worker would retain the right to a hearing and to appeal the decision.
“You do still have to hear both sides,” Louisiana Workforce Commission Secretary Ava Cates said.
David Jacobs is a Baton Rouge-based award-winning journalist who has written about government, politics, business and culture in Louisiana for almost 15 years. He joined The Center Square in 2018.