From Mondaq, Beth A. Deragon from The McLane Law Firm writes about a bill in New Hampshire that attempts to define an independent contractor that would be used by the New Hampshire Department of Labor and New Hampshire Employment Security. The New Hampshire House of Representatives passed the bill and it is now with the Senate. Beth writes:
Below is the new ’employee’ definition – remember that the presumption is that the individual is an employee and the burden is on the employer to rebut the presumption:
- The individual must satisfy all of the following five requirements: controls the detailed means and manner of the work except as to final results; has the opportunity for profit and loss as a result of the services being performed; performs services customarily engaged in as an independently established trade, occupation, profession or business (the individual may work for one entity for a 6 month period and still be in compliance); hires and pays his/her own assistant and supervises them to the extent they are employees; and is paid based on the agreed scope of work performed; and
- The individual must satisfy three of the following six criteria: have substantial investments in facilities, tools, materials, instruments and knowledge used to complete the work; is responsible for the satisfactory completion of the work and may be held contractually responsible for failure to complete the work; the parties have a written contract; the work is outside the usual course of business of the hiring unit; the work is performed outside all places of business of the hiring unit; or the Internal Revenue Service has classified the individual as an independent contractor.
HB 450 represents an effort to level the playing field in a political environment both nationally and at the state level that supports a heightened enforcement of the misclassification of employees as independent contractors. To those ends, NH DOL and NH ES cooperate in regard to reporting alleged misclassifications to each other. While NH DOL’s application of the new ’employee’ definition will not collaterally estop a separate finding by NH ES, it would likely be taken into account – especially if the determination is being made contemporaneously, as it typically happens.