employment; rural fire districts; exception

HB2349 - 572R - I Ver

REFERENCE TITLE:
employment; rural fire districts; exception

State of Arizona

House of Representatives

Fifty-seventh Legislature

Second Regular Session

2026

HB 2349

Introduced by

Representatives
Diaz: Gillette, Heap

AN
ACT

amending section 23-902, arizona
revised statutes; relating to workers' compensation.

(TEXT OF BILL BEGINS ON NEXT PAGE)

Be it enacted by the Legislature of the State of Arizona:

Section 1. Section 23-902, Arizona Revised
Statutes, is amended to read:

START_STATUTE
23-902.

Employers subject to chapter; exceptions

A. Employers subject to this chapter are
the

this
state, each county, city, town,
municipal corporation and school district and every person who employs any
workers or operatives regularly employed in the same business or establishment
under contract of hire, including covered employees pursuant to a professional
employer agreement, except domestic servants
and rural fire
districts that are located in a county with a population of less than one
million persons
. Exempted employers of domestic servants may come
under this chapter by complying with its provisions and the rules of the
commission. For the purposes of this subsection, "regularly
employed" includes all employments, whether continuous throughout the year
,
or for only a portion of the year, in the usual trade,
business, profession or occupation of an employer.

B. When an employer procures work to be done for the
employer by a contractor over whose work the employer retains supervision or
control
,
and the work is a part or process in the
trade or business of the employer,
then
the contractors
and the contractor's employees
,
and any
subcontractor and the subcontractor's employees,
are,

within the meaning of this section,
are
employees of the
original employer.� For the purposes of this subsection, "part or process
in the trade or business of the employer" means a particular work activity
that in the context of an ongoing and integral business process is regular,
ordinary or routine in the operation of the business or is routinely done
through the
business'

business's
own
employees.

C. A person engaged in work for a business, and who
while so engaged is independent of that business in the execution of the work
and not subject to the rule or control of the business for which the work is
done, but is engaged only in the performance of a definite job or piece of
work, and is subordinate to that business only in effecting a result in
accordance with that business design, is an independent contractor.

D. A business that uses the services of an
independent contractor and the independent contractor may prove the existence
of an independent contractor relationship by executing a written agreement that
complies with this subsection. The written agreement shall evidence
that the business does not have the authority to supervise or control the
actual work of the independent contractor or the independent contractor's
employees. A written agreement executed in compliance with this
subsection creates a rebuttable presumption of an independent contractor
relationship between the parties if the written agreement contains a disclosure
statement that the independent contractor is not entitled to workers'
compensation benefits from the business. Unless the rebuttable
presumption is overcome, no premium may be collected by the carrier on payments
by the business to the independent contractor if a fully completed written
agreement that satisfies the requirements of this subsection is submitted to
the carrier.� The written agreement shall be dated and contain the signatures
of both parties and, unless otherwise provided by law, shall state that the
business:

1. Does not require the independent contractor to
perform work exclusively for the business. This paragraph
shall

is
not
be construed as

conclusive evidence that an individual who performs services primarily or
exclusively for another person is an employee of that person.

2. Does not provide the independent contractor with
any business registrations or licenses required to perform the specific
services set forth in the contract.

3. Does not pay the independent contractor a salary
or hourly rate instead of an amount fixed by contract.

4. Will not terminate the independent contractor
before the expiration of the contract period
,
unless
the independent contractor breaches the contract or violates the laws of this
state.

5. Does not provide tools to the independent
contractor.

6. Does not dictate the time of performance.

7. Pays the independent contractor in the name
appearing on the written agreement.

8. Will not combine business operations with the person
performing the services rather than maintaining these operations separately.

E. A business that uses the services of a sole
proprietor who has waived the sole proprietor's rights to workers' compensation
coverage and benefits pursuant to section 23-961, subsection N is not
liable for workers' compensation coverage or the payment of premiums for the
sole proprietor.

F. The written agreement executed in compliance with
subsection D of this section shall be null and void and create no presumption
of an independent contractor relationship if the consent of either party is
either:

1. Obtained through misrepresentation, false
statements, fraud or intimidation.

2. Obtained through coercion or duress.

G. If any agreement is found to be null and void
under subsection F of this section the insurance carrier is entitled to collect
a premium.
END_STATUTE