Read the full stored bill text
House
File
348
-
Introduced
HOUSE
FILE
348
BY
B.
MEYER
A
BILL
FOR
An
Act
prohibiting
the
misclassification
of
employees
as
1
independent
contractors,
providing
penalties,
and
including
2
applicability
provisions.
3
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
4
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Section
1.
Section
84A.5,
subsection
3,
Code
2025,
is
1
amended
to
read
as
follows:
2
3.
The
department
of
workforce
development
is
responsible
3
for
administration
of
unemployment
compensation
benefits
4
and
collection
of
employer
contributions
under
chapter
96
,
5
providing
for
the
delivery
of
free
public
employment
services
6
established
pursuant
to
chapter
96
,
other
job
placement
and
7
training
programs
established
pursuant
to
section
84A.6
,
8
employment
agencies
under
chapter
84I
,
enforcement
of
chapter
9
95
relating
to
misclassification,
and
the
delivery
of
services
10
located
throughout
the
state.
11
Sec.
2.
NEW
SECTION
.
95.1
Definitions.
12
As
used
in
this
chapter,
unless
the
context
otherwise
13
requires:
14
1.
“Department”
means
the
department
of
workforce
15
development.
16
2.
“Employee”
means
an
individual
who
performs
services
in
17
this
state
for
an
employer
in
return
for
remuneration
and
who
18
is
considered
an
employee
under
regulations
or
guidelines
of
19
the
federal
internal
revenue
service
in
effect
as
of
the
date
20
of
an
alleged
misclassification.
21
3.
“Employer”
means
a
person
who
employs
an
individual
in
22
this
state
for
wages.
23
4.
“Independent
contractor”
means
an
individual
who
24
performs
services
in
this
state
for
an
employer
in
return
for
25
remuneration
and
who
is
considered
an
independent
contractor
26
under
regulations
or
guidelines
of
the
federal
internal
27
revenue
service
in
effect
as
of
the
date
of
an
alleged
28
misclassification.
29
5.
“Misclassify”
or
“misclassification”
means
to
classify
an
30
individual
for
employment
purposes
as
an
independent
contractor
31
rather
than
an
employee,
contrary
to
regulations
or
guidelines
32
of
the
federal
internal
revenue
service
in
effect
as
of
the
33
date
of
an
alleged
misclassification,
with
the
effect
of
34
denying
the
individual
eligibility
for
an
employment
benefit
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provided
by
law
or
for
a
government
program.
1
Sec.
3.
NEW
SECTION
.
95.2
Misclassification
of
employees
2
prohibited.
3
An
employer
shall
not
willfully
misclassify
an
individual.
4
Sec.
4.
NEW
SECTION
.
95.3
Civil
penalty
——
procedures.
5
1.
An
employer
who
violates
section
95.2
shall
be
subject
6
to
a
civil
penalty
of
up
to
five
thousand
dollars
per
7
misclassified
individual
for
a
first
offense,
up
to
seven
8
thousand
five
hundred
dollars
per
misclassified
individual
9
for
a
second
offense,
and
up
to
ten
thousand
dollars
per
10
misclassified
individual
for
each
subsequent
offense.
11
2.
The
department
shall
provide
written
notice
to
an
12
employer
prior
to
imposition
of
a
civil
penalty
under
this
13
section.
An
employer
may
contest
and
seek
judicial
review
of
a
14
determination
of
the
department
under
this
chapter
pursuant
to
15
chapter
17A;
however,
for
purposes
of
this
section,
an
employer
16
shall
bear
the
burden
to
demonstrate
by
a
preponderance
of
the
17
evidence
that
the
employer
did
not
violate
section
95.2.
18
3.
Upon
a
final
determination
of
the
department
that
an
19
employer
violated
section
95.2
and
the
conclusion
of
the
period
20
for
any
appeals,
all
of
the
following
apply:
21
a.
The
department
shall
bring
an
action
in
district
court
to
22
collect
the
penalties
provided
in
this
section.
The
department
23
shall
remit
any
penalties
collected
to
the
treasurer
of
state
24
for
deposit
in
the
general
fund.
25
b.
The
department
shall
refer
the
violation
to
a
county
26
attorney.
A
county
attorney
shall
not
be
bound
by
any
27
determination
of
the
department.
28
Sec.
5.
NEW
SECTION
.
95.4
Criminal
penalty.
29
In
addition
to
the
civil
penalties
provided
in
section
95.3,
30
an
employer
who
violates
section
95.2
commits
a
class
“D”
31
felony.
32
Sec.
6.
NEW
SECTION
.
95.5
Enforcement
——
rules.
33
1.
The
department
shall
enforce
this
chapter.
The
34
department
may
establish
additional
procedures
to
implement
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this
chapter
and
may
employ
inspectors
and
any
other
personnel
1
deemed
necessary
to
implement
this
chapter,
subject
to
the
2
provisions
of
chapter
8A,
subchapter
IV.
3
2.
The
department
shall
adopt
rules
pursuant
to
chapter
17A
4
to
administer
this
chapter.
5
Sec.
7.
APPLICABILITY.
This
Act
applies
to
6
misclassification,
as
defined
in
section
95.1,
as
enacted
by
7
this
Act,
of
an
individual
by
an
employer
occurring
on
or
after
8
the
effective
date
of
this
Act.
9
EXPLANATION
10
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
11
the
explanation’s
substance
by
the
members
of
the
general
assembly.
12
This
bill
prohibits
an
employer
from
willfully
13
misclassifying
an
individual
who
performs
services
for
14
the
employer
in
return
for
remuneration
as
an
independent
15
contractor
rather
than
an
employee
with
the
effect
of
denying
16
the
individual
eligibility
for
an
employment
benefit
provided
17
by
law
or
for
a
government
program.
Whether
an
individual
18
performs
services
as
an
employee
or
independent
contractor
19
is
determined
under
regulations
or
guidelines
of
the
federal
20
internal
revenue
service
in
effect
as
of
the
date
of
an
alleged
21
misclassification.
The
bill
is
enforced
by
the
department
of
22
workforce
development.
23
An
employer
who
violates
this
prohibition
shall
be
subject
24
to
a
civil
penalty
of
up
to
$5,000
per
misclassified
individual
25
for
a
first
offense,
up
to
$7,500
per
misclassified
individual
26
for
a
second
offense,
and
up
to
$10,000
per
misclassified
27
individual
for
each
subsequent
offense.
28
The
department
shall
provide
written
notice
to
an
employer
29
prior
to
imposition
of
a
civil
penalty.
An
employer
may
30
contest
and
seek
judicial
review
of
a
determination
of
31
the
department
pursuant
to
Code
chapter
17A.
An
employer
32
shall
bear
the
burden
of
proving
that
the
employer
did
not
33
misclassify
an
individual.
Upon
a
final
determination
of
the
34
department
that
a
violation
occurred
and
the
conclusion
of
the
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period
for
any
appeals,
the
department
shall
bring
an
action
in
1
district
court
to
collect
the
civil
penalties
for
deposit
in
2
the
general
fund
and
refer
the
violation
to
a
county
attorney.
3
A
county
attorney
shall
not
be
bound
by
any
determination
of
4
the
department.
5
An
employer
who
misclassifies
an
individual
in
violation
of
6
the
bill
commits
a
class
“D”
felony.
A
class
“D”
felony
is
7
punishable
by
confinement
for
no
more
than
five
years
and
a
8
fine
of
at
least
$1,025
but
not
more
than
$10,245.
9
The
bill
applies
to
misclassification
of
an
individual
by
an
10
employer
occurring
on
or
after
the
effective
date
of
the
bill.
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