HB1324 - The Employee Classification Act

• Creates new law addressing misclassification of employees as independent contractors in the commercial and residential building construction industry for unemployment insurance purposes.

• Establishes strict criteria for independent contractor classification, requiring written contract, freedom from control, established independent trade/business, essential tools/equipment, profit/loss arrangement, separate business location, prior experience or availability to other clients, and minimum $50,000 liability insurance.

• Prohibits improper employee misclassification and authorizes Department of Labor to investigate violations, issue orders to show cause, assess civil penalties up to $1,000 for first violation and $2,500 for subsequent violations, and petition courts for stop-work orders.

• Creates criminal penalties of Class C misdemeanor for intentional violations (first offense) and Class B misdemeanor for subsequent offenses; negligent violations punishable by fine up to $1,000.

• Prohibits retaliation against workers for exercising rights under the law and requires Department of Labor to post notice of requirements on job sites; enforcement limited until adequate funding is available.