SB3571 96TH GENERAL ASSEMBLY

LRB096 18266 WGH 33641 b

96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010
SB3571

Introduced 2/10/2010, by Sen. Gary Forby

SYNOPSIS AS INTRODUCED:

820 ILCS 185/5
820 ILCS 185/10

Amends the Employee Classification Act. Provides that the term "employment" does not include services performed by an individual as an operator of a truck, truck-tractor, or tractor if certain specified conditions are met. Provides that an individual performing services for a contractor is deemed to be an employee of the employer, unless the contractor is a truck owner-operator as defined in the Act. Effective January 1, 2011.

A BILL FOR

AN ACT concerning employment.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Employee Classification Act is amended by changing Sections 5 and 10 as follows:

(820 ILCS 185/5)

Sec. 5. Definitions. As used in this Act:

"Construction" means any constructing, altering, reconstructing, repairing, rehabilitating, refinishing, refurbishing, remodeling, remediating, renovating, custom fabricating, maintenance, landscaping, improving, wrecking, painting, decorating, demolishing, and adding to or subtracting from any building, structure, highway, roadway, street, bridge, alley, sewer, ditch, sewage disposal plant, water works, parking facility, railroad, excavation or other structure, project, development, real property or improvement, or to do any part thereof, whether or not the performance of the work herein described involves the addition to, or fabrication into, any structure, project, development, real property or improvement herein described of any material or article of merchandise. Construction shall also include moving construction related materials on the job site to or from the job site.

"Contractor" means any sole proprietor, partnership, firm, corporation, limited liability company, association or other legal entity permitted by law to do business within the State of Illinois who engages in construction as defined in this Act.

"Contractor" includes a general contractor and a subcontractor.

"Department" means the Department of Labor.

"Director" means the Director of the Department of Labor.

"Employer" means any contractor that employs individuals deemed employees under Section 10 of this Act; however, "employer" does not include (i) the State of Illinois or its officers, agencies, or political subdivisions or (ii) the federal government.

"Entity" means any contractor for which an individual is performing services and is not classified as an employee under Section 10 of this Act; however, "entity" does not include (i) the State of Illinois or its officers, agencies, or political subdivisions or (ii) the federal government.

"Interested party" means a person with an interest in compliance with this Act.

"Performing services" means the performance of any constructing, altering, reconstructing, repairing, rehabilitating, refinishing, refurbishing, remodeling, remediating, renovating, custom fabricating, maintenance, landscaping, improving, wrecking, painting, decorating, demolishing, and adding to or subtracting from any building, structure, highway, roadway, street, bridge, alley, sewer, ditch, sewage disposal plant, water works, parking facility, railroad, excavation or other structure, project, development, real property or improvement, or to do any part thereof, whether or not the performance of the work herein described involves the addition to, or fabrication into, any structure, project, development, real property or improvement herein described of any material or article of merchandise. Construction shall also include moving construction related materials on the job site to or from the job site.

"Employment" does not include services performed by an individual as an operator of a truck, truck-tractor, or tractor, if the person or entity to which the individual is contracted for service shows that the individual:

(1) is either:

(i) registered or licensed as a motor carrier of real or personal property by the Illinois Commerce Commission, the Interstate Commerce Commission, or any successor agencies; or

(ii) operating the equipment under an owner-operator lease contract with the person or entity, when the person or entity is registered, licensed, or both, as a motor carrier of real or personal property licensed by the Illinois Commerce Commission, the Interstate Commerce Commission, or any successor agencies;

(2) has the right to terminate the lease contract and thereafter has the right to perform the same or similar services, on whatever basis and whenever he or she chooses, for persons or entities other than the person or entity to which the individual is contracted for services;

(3) is not required by the person or entity to which the individual is contracted for services to perform services, or be available to perform services, at specific times or according to a schedule or for a number of hours specified by the person or entity; pickup or delivery times specified by a shipper or receiver shall not be deemed specified by the person or entity;

(4) either leases the equipment or holds title to the equipment, if the individual or entity from which the equipment is leased, or which holds any security or other interest in the equipment, is not:

(i) the person or entity to which the individual is contracted for service; or

(ii) owned, controlled, or operated by or in common with, to any extent, whether directly or indirectly, the person or entity to which the individual is contracted for services or a family member of a shareholder, owner, or partner of the person or entity;

(5) pays all costs of licensing and operating the equipment (except when federal or State law or regulation requires the carrier to pay), and the costs are not separately reimbursed by any other individual or entity; and

(6) maintains a separate business identity, offering or advertising his or her services to the public, by displaying its name and address on the equipment or otherwise.

The definition of "truck owner-operator" under this Section does not apply:

(1) if, as a condition for retaining the individual's services, the person or entity to which the individual is contracted specifies the person or entity from which the equipment is to be leased or purchased; or

(2) to any services that are required to be covered as a condition of approval of this Act by the United States Secretary of Labor under Section 3304(a)(6)(A) of the Federal Unemployment Tax Act.

Nothing in this definition of "truck owner-operator" shall be construed or used to effect the existence or non-existence of an employment relationship other than for purposes of this Act. For purposes of this definition of "truck owner-operator":

(1) "Family member" means any parent, sibling, child, sibling of a parent, or any of the foregoing relations by marriage.

(2) "Ownership", "control", or "operation" may be through any one or more natural persons or proxies, powers of attorney, nominees, proprietorships, partnerships, associations, corporations, trusts, joint stock companies, or other entities or devices, or any combination thereof.

(3) "Persons or entity" means a sole proprietorship, partnership, association, corporation, or any other legal entity.

(Source: P.A. 95-26, eff. 1-1-08.)

(820 ILCS 185/10)

Sec. 10. Applicability; status of individuals performing service.

(a) For the purposes of this Act, an individual performing services for a contractor is deemed to be an employee of the employer except as provided in subsections (b), and (c), and (d) of this Section.

(b) An individual performing services for a contractor is deemed to be an employee of the contractor unless it is shown that:

(1) the individual has been and will continue to be free from control or direction over the performance of the service for the contractor, both under the individual's contract of service and in fact;

(2) the service performed by the individual is outside the usual course of services performed by the contractor; and

(3) the individual is engaged in an independently established trade, occupation, profession or business; or

(4) the individual is deemed a legitimate sole proprietor or partnership under subsection (c) of this Section.

(c) The sole proprietor or partnership performing services for a contractor as a subcontractor is deemed legitimate if it is shown that:

(1) the sole proprietor or partnership is performing the service free from the direction or control over the means and manner of providing the service, subject only to the right of the contractor for whom the service is provided to specify the desired result;

(2) the sole proprietor or partnership is not subject to cancellation or destruction upon severance of the relationship with the contractor;

(3) the sole proprietor or partnership has a substantial investment of capital in the sole proprietorship or partnership beyond ordinary tools and equipment and a personal vehicle;

(4) the sole proprietor or partnership owns the capital goods and gains the profits and bears the losses of the sole proprietorship or partnership;

(5) the sole proprietor or partnership makes its services available to the general public or the business community on a continuing basis;

(6) the sole proprietor or partnership includes services rendered on a Federal Income Tax Schedule as an independent business or profession;

(7) the sole proprietor or partnership performs services for the contractor under the sole proprietorship's or partnership's name;

(8) when the services being provided require a license or permit, the sole proprietor or partnership obtains and pays for the license or permit in the sole proprietorship's or partnership's name;

(9) the sole proprietor or partnership furnishes the tools and equipment necessary to provide the service;

(10) if necessary, the sole proprietor or partnership hires its own employees without contractor approval, pays the employees without reimbursement from the contractor and reports the employees' income to the Internal Revenue Service;

(11) the contractor does not represent the sole proprietorship or partnership as an employee of the contractor to its customers; and

(12) the sole proprietor or partnership has the right to perform similar services for others on whatever basis and whenever it chooses.

(d) Where a sole proprietor or partnership performing services for a contractor as a subcontractor is deemed not legitimate under subsection (c) of this Section, the sole proprietorship or partnership shall be deemed an individual for purposes of this Act. An individual performing services for a contractor is deemed to be an employee of the employer, unless the contractor is a truck owner-operator as defined in Section 5 of this Act.

(e) Subcontractors or lower tiered contractors are subject to all provisions of this Act.

(f) A contractor shall not be liable under this Act for any subcontractor's failure to properly classify persons performing services as employees, nor shall a subcontractor be liable for any lower tiered subcontractor's failure to properly classify persons performing services as employees.

(Source: P.A. 95-26, eff. 1-1-08.)

Section 99. Effective date. This Act takes effect January 1, 2011.