West Virginia House Passes Measure To ‘Clarify’ Worker Classifications

The West Virginia House of Delegates has passed a bill making it easier for businesses owners to classify workers as independent contractors rather than employees entitled to benefits such as workers compensation and unemployment insurance.

Senate Bill 272 passed the House Wednesday on a 77-23 vote along strict party lines, with Republicans supporting the measure and Democrats opposed.

The measure would add into state code a section known as “the West Virginia Employment Law Worker Classification Act,” which seeks to clarify the definition of an independent contractor. The proposal would create a uniform test to determine how a worker would be classified under the law.

House Judiciary Chair Moore Capito, R-Kanawha, argued that the workforce is evolving, with many young workers taking part in the so-called “gig economy” and working a series of jobs that allows them the freedom to choose their hours.

“I can tell you the next-generation worker wants predictability [and] wants the freedom to contract independently. They don’t want to be an employee,” Capito said. “They don’t want to be an employee. They don’t want that relationship. They want this independent contractor relationship.”

Democrats said there are indeed issues with worker misclassification, but that the bill favors employers over workers.

Del. Kayla Young, D-Kanawha, noted that, in West Virginia between 2014 and 2018, there were $27.4 million in underreported wages because of worker misclassification. She argued that the issues are a problem to be solved on the federal level, not by the state.

“The federal government needs to fix that. We know they do,” Young said. “And I love that we’re trying to fix it here. But I worry what this could do for employers if they have all these independent contractors and then the federal government comes in and says, ‘Hey, those are all employees.’”

Young also noted that a series of federal penalties could be imposed on employers who misclassify workers as independent contractors instead of employees — and that more businesses could be subjected to those penalties.

Del. Lisa Zukoff, D-Ohio, said the bill may force workers who do not understand the rights and potential benefits, including worker compensation and unemployment insurance, they are giving up when they enter into a contract with an employer.

“We have a lot of people in West Virginia who are desperate for work,” Zukoff said. “And if they are offered a contract — and it’s going to get them a job to help them feed their family, regardless of whether they understand this contract or not — they may take this job.”

House Government Organization Chair Brandon Steele, R-Raleigh, defended the measure. He said the bill simplifies a contract down to it’s most “finite terms.”

“As a business owner myself that employs a lot of people and a lot of independent contractors, I’ve wanted to see this bill for a very long time,” Steele said. “What this bill represents is the ultimate freedom that everybody in West Virginia has — and that is the freedom to direct your labor.”

The bill now heads back to the Senate to consider amendments made in the House.