Jul
01
2010
Congress Contemplates Changes to Independent Contractor Legislation
The Professional Alliance, through the Financial Services Institute (FSI), has been working with several coalitions to influence the outcome of the independent contractor debate currently taking place in Congress (see below). TPA and FSI are supporters of the Coalition to Preserve Independent Contractor Status. The Coalition is made up of a broad and diverse spectrum of industries committed to protecting and preserving the independent contractor status of workers that many businesses rely upon. FSI is also working with a coalition made up of other financial services trade associations, including ACLI, SIFMA, and FPA.
Summary of pending legislation:
- The Taxpayer Responsibility, Accountability, and Consistency Act of 2009 (H.R. 3408 and S. 2882) was introduced in the House and Senate by Rep. Jim McDermott (D-WA-7) and Senator John Kerry (D-MA), respectively. The core provisions of these bills make it more difficult for employers to classify workers as independent contractors. Among other things, the proposed legislation would remove an important safe-harbor provision in Section 530 of the Revenue Act of 1978, and give the IRS reason to question the independent contractor status of independent financial advisors affiliated with independent broker-dealers.
- The Employee Misclassification Prevention Act was introduced in the House (H.R. 5107) by Rep. Lynn Woolsey (D-CA-6) and the Senate (S. 3254) by Senator Sherrod Brown (D-OH). The bills would amend the Fair Labor Standards Act of 1938 to increase the financial consequences to a company that misclassifies an individual as an independent contractor and impose new and expensive recordkeeping and notice requirements on a company that does business with an independent contractor.
FSI is meeting with key Members of Congress who are in a position to exert influence over this issue. They expect to schedule additional meetings with Congressional leaders in their home states and districts during July 4 recess. We will keep you informed of these efforts and any movement on these bills.
