Senate Passes Bill to Close Unfair Loophole, Protect Workers

The North Carolina Senate tentatively passed bipartisan legislation to help prevent the unfair misclassification of newspaper delivery workers and salespeople as independent contractors. The bill levels the playing field by deleting a special carve-out in the Workers’ Compensation Act that prevents these workers from being classified as “employees” of their publications entitled to benefits such as unemployment insurance, payroll taxes and workers’ compensation coverage – as long as multiple criteria are met.

The provision in House Bill 205 was partially inspired by a five-part series published in 2014 by The (Raleigh) News & Observer and The Charlotte Observer describing how some North Carolina companies gain an unfair competitive advantage by improperly treating their workers as independent contractors and neglecting to pay unemployment insurance, payroll taxes and workers’ compensation coverage.

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