IA HF2385

Prohibits employers from willfully misclassifying employees as independent contractors, using IRS regulations and guidelines as the standard for determining proper worker classification.

Establishes escalating civil penalties: up to $5,000 per misclassified worker for first offense, up to $7,500 for second offense, and up to $10,000 for each subsequent offense.

Creates criminal penalties making willful misclassification a class "D" felony in addition to civil penalties.

Assigns the Iowa Department of Workforce Development responsibility for enforcement, including authority to hire inspectors and adopt administrative rules.

Places the burden of proof on employers to demonstrate by preponderance of evidence that they did not violate the misclassification prohibition when contesting department determinations.