Proposal to Allow Attorney General to Investigate Employee Misclassification and Add Additional Penalties

S.108 would allow individuals to ask the Attorney General to investigate and impose penalties in cases of misclassification of employees as independent contractors with regard to worker’s compensation, unemployment insurance, wage and hour, minimum wage, and paid sick leave.  It is currently under review in the House Commerce and Economic Development Committee.

There are a number of problems with the bill, as AIV outlined in testimony this past Thursday.  First, the bill would allow for duplicative investigations of alleged misclassification cases.  Second, it could lead to conflicting interpretations of employee definitions.  Third, it would apply additional penalties not designed or intended for cases of misclassification.  Relatedly, fourth, it would also allow for different potential penalties for the same violations based solely on which agency conducts an investigation.

In our testimony, AIV first recommended against moving the bill as unnecessary and problematic.  Barring such restraint, we recommended the following changes:

  • Require that the Department of Labor must voluntarily decide to refer cases to the AG rather than allow individuals to request investigations directly.
  • Ensure that the AG would be governed by Department guidelines and precedents in interpreting definitions of employee.
  • Require that the AG refer decisions back to the Department for assessment of penalties based on current law.
  • Sunset the AG’s authority after no more than three years and require a report on the cost and value of the option.

It remains unclear whether the Committee will make such changes to the bill, but there are members supportive of AIV’s recommendations.  We will be continuing to engage the Committee on this issue in the coming days.  Members interested in the bill are urged to review the current version and to contact us at info@aivt.org for more information and to learn more about different ways to engage on this bill.

To review the version of S.108 as passed by the Senate, click here.

For contact information for the House Commerce and Economic Development Committee, click here.

To find contact information for your Representative(s), click here.

To contact House Speaker Mitzi Johnson:  (802) 828-2245  |  speaker@leg.state.vt.us