Assigned to COMPS AS
PASSED BY COMMITTEE
Assigned to COMPS AS
PASSED BY COMMITTEE
ARIZONA STATE SENATE
Fifty-Third Legislature, Second Regular Session
AMENDED
employment security; employee; employer; status
Purpose
Background
Under current law, an employee is an individual who performs services for an employing unit while subject to the control of the employing unit regarding work performance and results. Areas subject to employer control include the individual’s hours of work, location of work, the right to perform services for others and the tools, equipment and expenses necessary to complete the services (A.R.S. § 23-613.01).
An individual is exempt from employee status if they: 1) perform services as an independent contractor, business person or consultant; 2) are subject to employer control only under a trade regulation; 3) are not taxed as employees by the federal government; or 4) perform officiating services on a contest-by-contest basis. Services may be classified as exempt employment by the Department of Economic Security (DES) if they are not a part of an employing unit's trade or are performed in occasional transactions (A.R.S. § 23-613.01).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Excludes, from the definition of employee, medical or health care professionals that:
a) contract with a medical practice group or hospital (contracted group) directly or through an agent;
b) conduct compensation, billing, and tax return activity as a business or contractor;
c) are not paid wages by the contracted group;
d) do not have wage withholdings from the contracted group; and
e) are not provided employee benefits by the contracted group.
2. Excludes, from the definition of employee, home care services providers that contract with an individual, other than as an employee, directly or through an agent, to furnish nonmedical therapeutic and restorative services, except behavioral health such as:
a) General supervision, protective, preventative and person care; and
b) Activities and living skills training, meals, housekeeping, companionship and health monitoring at the location where the recipient resides.
3. Prohibits DES from determining employee status based on whether the individual:
a) executed a confidentiality agreement;
b) operates as a sole proprietor; or
c) performs services that are subject to quality, time or location standards of an employer's client or customer.
4. Designates IRS treatment of income from an independent contractor relationship as determinative of the federal government's judgment of employee status for an individual or class of individuals.
5. Includes isolated or occasional transactions performed for the clients of an employing unit in services exempt from employment.
7. Makes technical changes.
8. Becomes effective on the general effective date.
Amendments Adopted by Committee
1. Excludes home care services providers from the definition of employee.
2. Requires DES to provide a complete case record copy to a requesting employer during an appeal hearing.
Senate Action
COMPS 2/12/18 DPA 8-0-1
Prepared by Senate Research
February 15, 2018
GH/JP/lb