OLR Bill Analysis
AN ACT CONCERNING THE INTERSTATE PASSENGER CARRIER LAW.
This bill exempts certain professional drivers from coverage under the state's unemployment law. As exempted workers, these drivers would not accrue unemployment benefits for their service, and businesses using them are not required to pay unemployment taxes or meet the unemployment law's requirements, other than its record keeping requirements, for their service. The exemption applies to drivers under a contract with another party if the driver:
1. drives a vehicle that (a) can transport at least eight passengers, including the driver, and (b) has a gross vehicle weight rating over 6,000 pounds;
2. owns the vehicle or holds it under a “commercially reasonable” bona fide lease that is not with the contracting party or a related entity;
3. is paid based on factors that can include mileage-based rates, a percentage of any rate schedules, time spent driving, or a flat fee;
4. can refuse to work without consequence and can accept work from many contractors without consequence; and
5. is not considered an employee under the unemployment law's “ABC” test (see BACKGROUND).
When determining if a driver meets the ABC test, the bill prohibits the labor commissioner from considering a driver an employee solely because the driver chooses to perform services only for the contracting party.
Under the bill, commercially reasonable means the lease, loan, or loan guarantee for the driver's vehicle has terms equal to those typically available for a retail trucking equipment lease or purchase in the state.
The bill also prohibits the exemption from affecting any state income tax requirements.
EFFECTIVE DATE: October 1, 2017
Unemployment law presumes a worker to be an employer's employee unless the worker meets the ABC test's three requirements. The worker must be free from the employer's control and direction (part A); perform a service outside the employer's usual course of business or outside of all the employer's places of business (part B); and be customarily engaged in an independently established trade, occupation, profession, or business of the same nature as the service being performed for the employer (part C).
By law, a worker could fail to meet part C of the test if he or she provides services for only one employer. Workers who satisfy all three provisions of the ABC test are generally considered independent contractors exempt from the unemployment law.
Labor and Public Employees Committee
Joint Favorable Substitute