AK Governor Aims to Further Define Independent Contractor vs. Employee

Juneau, AK (WorkersCompensation.com) - Alaskan Gov. Bill Walker wants to make it very clear whether a worker is an independent contractor or employee as far as workers' compensation is concerned.

Under a special request by the governor, HB 79 will be proposed March 31. Just as many who favor the bill to be proposed Friday oppose it. One is Alaska State Director for the National Federation of Independent Business (NFIB) Danny Dewitt. 

Dewitt calls the proposed legislation "a nice little administrative cleanup with a poison pill in it to do away with independent contracting." He said that in Alaska, most small businesses use independent contractors since the region is not large enough to have a huge pool of employees.

"The language in this bill relative to independent contractors so closely defines what might be an independent contractor that it eliminates many, many folks from being independent contractors who are really independent contractors," Dewitt said.

In favor of the proposed legislation, Alaskan construction worker Charlie Young told officials at a March 20 hearing that HB 79 would level the playing field for laborers in the job bidding process. "I've been working in the painting and drywall finishing trade my entire adult life, and have never seen the abuse of this so high," Young said in an Associated Press report about employers misclassifying workers in attempt to save on workers’ compensation costs.

"More and more, these cheating contractors are winning the bids on projects, as I watch the amount of work for me get less and less," he added.

According to Dewitt, the governor has not brought up an issue that can't be resolved under current law. Calling the bill "silly" in many ways, Dewitt said one example of such proposed nonsense is independent contracting advertising requirements. "If you have a business card that is considered advertising," Dewitt said. "How that applies to whether or not I would be an employee for the purposes of workers' comp, it is certainly beyond my imagination, and I have a pretty good imagination."

Alaska Pipe Trades Union lobbyist Paul Grossi told the Alaska Public Media most often hindsight is 20/20 as far as employment misclassification and workers' compensation is concerned. “I can tell you this: These independent contractors, once they have this injury and they have $200,000 worth of medical bills, they seldom think of themselves as independent contractors,” Grossi said in the news report, noting said contractors are then forced to seek relief from the Workers’ Compensation Board.

Dewitt said while he recognizes that "there is a problem with the construction area where some general contractors have been trying to designate employees as independent contractors to reduce their cost," that should not change the definition of being an independent contractor in Alaska.  

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