SB2895 99TH GENERAL ASSEMBLY

LRB099 16927 JLS 41274 b

99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016
SB2895

Introduced 2/18/2016, by Sen. James F. Clayborne, Jr.

SYNOPSIS AS INTRODUCED:

820 ILCS 105/3	from Ch. 48, par. 1003
820 ILCS 105/3.5 new

Amends the Minimum Wage Law. Sets forth the criteria for establishing that a person is conclusively presumed to be an independent contractor. Effective immediately.

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 Minimum Wage Law is amended by changing Section 3 and by adding Section 3.5 as follows:

(820 ILCS 105/3) (from Ch. 48, par. 1003)

Sec. 3. As used in this Act:

(a) "Director" means the Director of the Department of Labor, and "Department" means the Department of Labor.

(b) "Wages" means compensation due to an employee by reason of his employment, including allowances determined by the Director in accordance with the provisions of this Act for gratuities and, when furnished by the employer, for meals and lodging actually used by the employee.

(c) "Employer" includes any individual, partnership, association, corporation, limited liability company, business trust, governmental or quasi-governmental body, or any person or group of persons acting directly or indirectly in the interest of an employer in relation to an employee, for which one or more persons are gainfully employed on some day within a calendar year. An employer is subject to this Act in a calendar year on and after the first day in such calendar year in which he employs one or more persons, and for the following calendar year.

(d) "Employee" includes any individual permitted to work by an employer in an occupation, but does not include any individual permitted to work:

(1) For an employer employing fewer than 4 employees exclusive of the employer's parent, spouse or child or other members of his immediate family.

(2) As an employee employed in agriculture or aquaculture (A) if such employee is employed by an employer who did not, during any calendar quarter during the preceding calendar year, use more than 500 man-days of agricultural or aquacultural labor, (B) if such employee is the parent, spouse or child, or other member of the employer's immediate family, (C) if such employee (i) is employed as a hand harvest laborer and is paid on a piece rate basis in an operation which has been, and is customarily and generally recognized as having been, paid on a piece rate basis in the region of employment, (ii) commutes daily from his permanent residence to the farm on which he is so employed, and (iii) has been employed in agriculture less than 13 weeks during the preceding calendar year, (D) if such employee (other than an employee described in clause (C) of this subparagraph): (i) is 16 years of age or under and is employed as a hand harvest laborer, is paid on a piece rate basis in an operation which has been, and is customarily and generally recognized as having been, paid on a piece rate basis in the region of employment, (ii) is employed on the same farm as his parent or person standing in the place of his parent, and (iii) is paid at the same piece rate as employees over 16 are paid on the same farm.

(3) In domestic service in or about a private home.

(4) As an outside salesman.

(5) As a member of a religious corporation or organization.

(6) At an accredited Illinois college or university employed by the college or university at which he is a student who is covered under the provisions of the Fair Labor Standards Act of 1938, as heretofore or hereafter amended.

(7) For a motor carrier and with respect to whom the U.S. Secretary of Transportation has the power to establish qualifications and maximum hours of service under the provisions of Title 49 U.S.C. or the State of Illinois under Section 18b-105 (Title 92 of the Illinois Administrative Code, Part 395 - Hours of Service of Drivers) of the Illinois Vehicle Code.

(8) An individual described in Section 3.5.

The above exclusions from the term "employee" may be further defined by regulations of the Director.

(e) "Occupation" means an industry, trade, business or class of work in which employees are gainfully employed.

(f) "Gratuities" means voluntary monetary contributions to an employee from a guest, patron or customer in connection with services rendered.

(g) "Outside salesman" means an employee regularly engaged in making sales or obtaining orders or contracts for services where a major portion of such duties are performed away from his employer's place of business.

(h) "Day camp" means a seasonal recreation program in operation for no more than 16 weeks intermittently throughout the calendar year, accommodating for profit or under philanthropic or charitable auspices, 5 or more children under 18 years of age, not including overnight programs. The term "day camp" does not include a "day care agency", "child care facility" or "foster family home" as licensed by the Illinois Department of Children and Family Services.

(Source: P.A. 94-1025, eff. 7-14-06; 95-945, eff. 1-1-09.)

(820 ILCS 105/3.5 new)

Sec. 3.5. Independent contractor; presumption.

(a) For the purposes of this Act, a person is conclusively presumed to be an independent contractor if:

(1) unless the person is a foreign national who is legally present in the United States, the person possesses or has applied for an employer identification number or social security number or has filed an income tax return for a business or earnings from self-employment with the Internal Revenue Service in the previous year;

(2) the person is required by the contract with the principal to hold any necessary State or local business license and to maintain any necessary occupational license, insurance, or bonding; and

(3) the person satisfies 3 or more of the following criteria:

(A) Notwithstanding the exercise of any control necessary to comply with any statutory, regulatory, or contractual obligations, the person has control and discretion over the means and manner of the performance of any work and the result of the work, rather than the means or manner by which the work is performed, is the primary element bargained for by the principal in the contract.

(B) Except for an agreement with the principal relating to the completion schedule, range of work hours or, if the work contracted for is entertainment, the time such entertainment is to be presented, the person has control over the time the work is performed.

(C) The person is not required to work exclusively for one principal unless:

(i) a law, regulation, or ordinance prohibits the person from providing services to more than one principal; or

(ii) the person has entered into a written contract to provide services to only one principal for a limited period.

(D) The person is free to hire employees to assist with the work.

(E) The person contributes a substantial investment of capital in the business of the person including, without limitation, the:

(i) purchase or lease of ordinary tools, material, and equipment regardless of source;

(ii) obtaining of a license or other permission from the principal to access any work space of the principal to perform the work for which the person was engaged; and

(iii) lease of any work space from the principal required to perform the work for which the person was engaged.

The determination of whether an investment of capital is substantial for the purpose of this subsection must be made on the basis of the amount of income the person receives, the equipment commonly used, and the expenses commonly incurred in the trade or profession in which the person engages.

(b) The fact that a person is not conclusively presumed to be an independent contractor for failure to satisfy 3 or more of the criteria set forth in paragraph (3) of subsection (a) does not automatically create a presumption that the person is an employee.

(c) As used in this Section, "foreign national" has the meaning ascribed to it in 52 U.S.C 30121.

Section 99. Effective date. This Act takes effect upon becoming law.