This bill establishes regulations to prevent the misclassification of employees as independent contractors, which can deny individuals access to employment benefits and government programs. It defines key terms such as "employee," "employer," and "independent contractor" based on federal IRS guidelines. The Department of Workforce Development is tasked with enforcing these regulations and ensuring compliance, including the collection of employer contributions and the provision of public employment services.

Employers found to willfully misclassify individuals will face civil penalties ranging from $5,000 for a first offense to $10,000 for subsequent offenses per misclassified individual. Additionally, such violations can result in a class D felony charge, which carries potential imprisonment and fines. The bill outlines procedures for the imposition of penalties, including the requirement for written notice to employers and the opportunity for judicial review. The provisions of this bill will apply to misclassifications occurring on or after its effective date.

Statutes affected:
Introduced: 84A.5