House Committee on Business Affairs and Labor (03/25/2009)

Final
STAFF SUMMARY OF MEETING

HOUSE COMMITTEE ON BUSINESS AFFAIRS AND LABOR

Date:	03/25/2009	ATTENDANCE

Time:	10:37 AM to 03:22 PM	Balmer	X
		Bradford	X
Place:	HCR 0112	Gagliardi	X
		Liston	X
This Meeting was called to order by		Priola	*
	Representative Rice	Ryden	X
		Scanlan	X
This Report was prepared by		Soper	X
	Christie Lee	Stephens	X
		Casso	X
		Rice	X
		X = Present, E = Excused, A = Absent, * = Present after roll call

Bills Addressed:		Action Taken:
HB09-1310 SB09-178		Amended, Referred to Appropriations Referred to Appropriations

10:37 AM -- House Bill 09-1310

Representative Levy, prime sponsor, presented House Bill 09-1310 concerning the misclassification of employees as independent contractors for purposes of the "Colorado Employment Security Act". This bill creates the Office of Employee Misclassification in the Division of Employment and Training in the Department of Labor and Employment. The office will investigate complaints of employers misclassifying employees as independent contractors in violation of the Colorado Employment Security Act. Upon finding a violation, the division director shall order the employer to pay back taxes owed plus interest. The director is authorized to impose a fine and prohibit an employer from contracting with the state for up to 2 years. The department is required to conduct a statewide study on the issue of employee misclassification and report those findings in combination with information on the operation of the office, to the General Assembly within 2 years.

10:39 AM

Representative Levy stated that about eight to nine percent of employees are being misclassified in Colorado. She talked about the impacts being misclassified has on employees and on the Unemployment Insurance Fund. Representative Levy talked about a fact sheet she distributed to the committee that talks about other states' laws that address improper classification of an independent contractor (Attachment A). Representative Ryden asked the sponsor to repeat her earlier statement about the estimated losses to the Unemployment Insurance Fund due to misclassification Representative Levy said the department has estimated the losses to be about $30 to $40 million dollars. Representative Levy responded to additional questions from the committee.

10:48 AM -- Virginia Love, representing the Colorado Competitive Council, testified against the bill as it was introduced. She talked about the concerns they have with the bill and some amendments that would address those concerns. Ms. Love responded to questions from the committee about the impact the bill would have on large companies that do business nation-wide. There was a discussion about the penalties provided in the bill.

11:05 AM -- Dan Block, a business law attorney with Robinson, Waters, and O'Dorisio, representing the Colorado Association of Commerce and Industry, testified against the bill as introduced. He said they have heard about amendments that may improve the bill. Mr. Block talked about some of the concerns they have with the bill and suggested some possible amendments to address those concerns. Mr. Block responded to questions from the committee.

11:17 AM -- Tony Gagliardi, representing the National Federation of Independent Businesses, testified against the bill and talked about their concerns with the bill. He talked about the issue of a business receiving an advisory opinion from the department rather than retaining an attorney. Mr. Gagliardi said they do support the amendments that he has heard about.

11:27 AM -- Greg Fulton, representing the Colorado Motor Carriers Association, testified on the bill and said they are leaning toward opposing the bill, but heard there may be amendments that address their concerns. He talked about those concerns and responded to questions from the committee.

11:40 AM -- Doug Stout, representing contractors, testified in support of the bill.

11:42 AM -- Linda Meric, representing 9 to 5 National Association of Working Women, testified in support of the bill.

11:47 AM -- Mike Cullen, Director of the Unemployment Insurance Program, Colorado Department of Labor and Employment, testified in support of the bill. He addressed earlier concerns and testimony. Mr. Cullen talked about the advisory opinion and said they are uncertain on where they stand on that issue. He talked about the issue of uncertainties over whether an advisory opinion will be binding or not. Mr. Cullen responded to questions from the committee.

12:02 PM

The committee recessed until 1:30 p.m.

12:02 PM

The committee was called back to order.

01:36 PM -- Vicki Smith, the Integrity Director of the Colorado Unemployment Insurance Program, responded to an earlier question about independent contractors.

01:38 PM -- Jeremy Schupbach, representing Alliance, testified against the bill and said they are concerned about the bill because they use various types of independent contractors. He suggested some changes to the bill that would address their concerns.

01:42 PM -- Dennis Creese, representing the International Union of Painters and Allied Trades, testified in support of the bill.

01:46 PM -- Ted Textor, representing the Teamsters, testified in support of the bill and distributed a packet of information to the committee that illustrated the impact of employee misclassification on communities and on states (Attachment B).

01:54 PM -- David Ahl, representing Gary Leimer, Inc., testified in support of the bill and talked about misclassification and workers' compensation insurance.

01:56 PM -- Misty Hageman, representing Expert Floor Covering, testified in support of the bill. She addressed earlier comments on the economic climate in Colorado. Ms. Hageman responded to questions from the committee.

02:09 PM -- Ralph Lufen, representing the Rocky Mountain Chapter of the National Electrical Contractors Association, testified in support of the bill and said the bill will create a level playing field in the industries where misclassification is taking place.

02:11 PM

Representative Levy responded to some of the witness testimony and addressed their concerns with the bill. She responded to the concerns that were brought up by the small businesses. There was a discussion about protections that can be placed in the bill to deter competitors from filing frivolous complaints.


BILL:	HB09-1310
TIME:	02:34:51 PM
MOVED:	Balmer
MOTION:	Moved amendment L.001 (Attachment C). The motion passed without objection.
SECONDED:	Liston
		VOTE
	Balmer
	Bradford
	Gagliardi
	Liston
	Priola
	Ryden
	Scanlan
	Soper
	Stephens
	Casso
	Rice

Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection


BILL:	HB09-1310
TIME:	02:35:53 PM
MOVED:	Ryden
MOTION:	Moved amendment L.002 (Attachment D). The motion passed without objection.
SECONDED:	Balmer
		VOTE
	Balmer
	Bradford
	Gagliardi
	Liston
	Priola
	Ryden
	Scanlan
	Soper
	Stephens
	Casso
	Rice

Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection


BILL:	HB09-1310
TIME:	02:37:36 PM
MOVED:	Liston
MOTION:	Moved amendment L.003 (Attachment E), as amended. The motion passed 8-3.
SECONDED:	Stephens
		VOTE
	Balmer	Yes
	Bradford	Yes
	Gagliardi	No
	Liston	Yes
	Priola	Yes
	Ryden	No
	Scanlan	Yes
	Soper	No
	Stephens	Yes
	Casso	Yes
	Rice	Yes

Not Final YES: 8 NO: 3 EXC: 0 ABS: 0 FINAL ACTION: PASS


BILL:	HB09-1310
TIME:	02:38:35 PM
MOVED:	Rice
MOTION:	Moved amendment L.004 to L.003 (Attachment F). The motion passed 8-3.
SECONDED:	Balmer
		VOTE
	Balmer	Yes
	Bradford	Yes
	Gagliardi	No
	Liston	Yes
	Priola	Yes
	Ryden	No
	Scanlan	Yes
	Soper	No
	Stephens	Yes
	Casso	Yes
	Rice	Yes

Not Final YES: 8 NO: 3 EXC: 0 ABS: 0 FINAL ACTION: PASS


BILL:	HB09-1310
TIME:	02:47:59 PM
MOVED:	Liston
MOTION:	Moved amendment L.005 (Attachment G). The motion failed 6-5.
SECONDED:	Balmer
		VOTE
	Balmer	Yes
	Bradford	Yes
	Gagliardi	No
	Liston	Yes
	Priola	Yes
	Ryden	No
	Scanlan	No
	Soper	No
	Stephens	Yes
	Casso	No
	Rice	No

Not Final YES: 5 NO: 6 EXC: 0 ABS: 0 FINAL ACTION: FAIL


BILL:	HB09-1310
TIME:	02:55:10 PM
MOVED:	Balmer
MOTION:	Moved amendment L.006 (Attachment H). The motion passed 9-2.
SECONDED:	Rice
		VOTE
	Balmer	Yes
	Bradford	Yes
	Gagliardi	No
	Liston	Yes
	Priola	Yes
	Ryden	No
	Scanlan	Yes
	Soper	Yes
	Stephens	Yes
	Casso	Yes
	Rice	Yes

Not Final YES: 9 NO: 2 EXC: 0 ABS: 0 FINAL ACTION: PASS


BILL:	HB09-1310
TIME:	03:03:48 PM
MOVED:	Soper
MOTION:	Moved to refer House Bill 09-1310, as amended, to the Committee on Appropriations. The motion passed 6-5.
SECONDED:	Gagliardi
		VOTE
	Balmer	No
	Bradford	No
	Gagliardi	Yes
	Liston	No
	Priola	No
	Ryden	Yes
	Scanlan	Yes
	Soper	Yes
	Stephens	No
	Casso	Yes
	Rice	Yes

Final YES: 6 NO: 5 EXC: 0 ABS: 0 FINAL ACTION: PASS

03:09 PM -- Senate Bill 09-178

Representative Liston, prime sponsor, presented Senate Bill 09-178 concerning the waiver of certain eligibility conditions for unemployment insurance benefits for unemployed individuals attached to regular jobs. This bill requires the director of the Division of Employment and Training to waive the requirement for employees attached to regular jobs to register for work and report to an employment office as a condition of being eligible to receive unemployment insurance (UI) benefits for a period of 26 weeks. These are claimants who are unemployed due to a temporary lack of work from their most recent employer, but anticipate returning to work with that employer.

03:16 PM

Representative Liston responded to questions about the fiscal note.

03:17 PM -- Jeff Clayton, legislative liaison for the Department of Labor and Employment, testified in support of the bill and addressed earlier questions.


BILL:	SB09-178
TIME:	03:20:34 PM
MOVED:	Liston
MOTION:	Moved to refer Senate Bill 09-178 to the Committee on Appropriations. The motion passed 11-0.
SECONDED:	Soper
		VOTE
	Balmer	Yes
	Bradford	Yes
	Gagliardi	Yes
	Liston	Yes
	Priola	Yes
	Ryden	Yes
	Scanlan	Yes
	Soper	Yes
	Stephens	Yes
	Casso	Yes
	Rice	Yes

Final YES: 11 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: PASS

03:22 PM

The committee adjourned.