George Ports, CAI’s Senior Executive and HR Advisor shares important legislation updates for NC employers in today’s post.
The 2015 Session of the North Carolina General Assembly officially convened on January 28, 2015. As we expected, there has been a lot of activity pertaining to legislation introduced affecting day-to-day workplace issues, legislation that I will be covering at CAI’s 2015 Employment and Labor Law Update in May.
Bills introduced in the House and in the Senate aim to make changes to North Carolina’s unemployment laws. Some of these changes such as requiring a photo ID to receive benefits, requiring more weekly attempts by claimants to obtain employment and authorizing the NCDMV to release social security numbers to the NCDES to prevent fraud were contained in legislation passed in the 2014 Session but vetoed by Governor McCrory.
Other legislation addresses criminal record expunction laws, one bill places restrictions on credit history checks for applicants, and another provides NC Industrial Commission fraud investigators more authority (investigators would be sworn law enforce officers with arrest powers). Oh yes, and there is a bill that attempts to revise North Carolina’s E-verify law, increasing the number of employers required to use e-verify (employers from 25 or more employees to employers with 5 or more employees).
For many years “employee misclassification” has been a Hot Button for USDOL’s Wage & Hour Division—is the individual providing services to an employer an employee or an independent contractor? This misclassification issue has garnered quite a bit of attention from North Carolina regulatory agencies and legislators. Employers don’t pay payroll taxes or unemployment taxes on independent contractors nor are independent contractors covered by employers’ workers compensation insurance. Independent contractors therefore are not eligible for unemployment or workers’ compensation benefits.
As this article is being written, there are at least four bills that have been introduced in attempts to address “employee misclassification.” All four have their own definitions of employee and independent contractor. Two bills are similar in their definitions and that they allow employers a “second bite of the apple” before penalties are imposed. There is one bill’s definition of an independent contractor, however, it is quite narrow and its penalties for misclassifying an employee as an independent contractor are severe. Civil penalties can range from $500 to $4000 per violation. The amount of the penalty will be determined by “the size of the business of the person charged and the gravity of the violation”. This legislation also contains a provision giving regulatory agencies the authority to issue a stop work order, in other words, shut down business operations.
During my presentation, I’ll be giving status updates on each bill, stating whether they’ve passed and providing insights as to the probability of them passing or not. We at CAI look forward to hosting our annual Employment and Labor Law Update on May 14th and 15th at the McKimmon Center in Raleigh.
The Employers Coalition of North Carolina (ECNC) was created to give the business community a more focused avenue of public policy input concerning day to day employer-employee workplace issues. ECNC is a partnership of three North Carolina employers’ associations: CAI (Capital Associated Industries), TEA (The Employers Association) and WCI (Western Carolina Industries) and their 2500 members.