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News & Press: State Legislation

AK Workers Compensation Proposing NEW Definition of Independent Contractor

Tuesday, February 6, 2018   (0 Comments)
Posted by: Sheri Ryan
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In HB79, currently before the 30th Alaska Legislature, Alaska Workers Compensation is proposing a NEW definition of who would be classified as an "independent contractor" under the AK Workers' Compensation program   This is NEW proposed language.  Currently, there is no definition of an "independent contractor" in AK work comp statute/regulation for the purposes of workers' compensation insurance. Work comp only defines who is an "employee".  It's important to note this new definition would apply to who you (as a business owner) would be responsible for paying workers' comp insurance for.  Do you have independent contractors in your office?  How would they measure up under this new definition?  HB79 was introduced at the beginning of last year's legislative session and the definition has evolved due to stakeholder concerns (Alaska Trucking, NFIB, and Alaska State Home Building Association).  Do you have concerns with this definition?  The Alaska Chiropractic Society wants to hear from you.  

Here's the proposed work comp language - 

HB0079c   Sec. 29. AS 23.30.230(a) is amended to read:

(a) The following persons are not covered by this chapter:

(11) a person employed as an independent contractor; a person is an independent contractor for the purposes of this chapter only if the person

(A) has an express contract to perform the services;
(B) is free from direction and control over the means and  manner of providing services, subject only to the right of the individual  for whom, or entity for which, the services are provided to specify the  desired results, completion schedule, or range of work hours, or to monitor the work for compliance with contract plans and specifications, or federal, state, or municipal law;  
(C) incurs most of the expenses for tools, labor, and other operational costs necessary to perform the services, except that materials and equipment may be supplied;  
(D) has an opportunity for profit and loss as a result of the  services performed for the other individual or entity;  
(E) is free to hire and fire employees to help perform the  services for the contracted work;  
(F) has all business, trade, or professional licenses required  by federal, state, or municipal authorities for a business or individual  engaging in the same type of services as the person;  
(G) follows federal Internal Revenue Service requirements by

(i) obtaining an employer identification number, if required;  
(ii) filing business or self-employment tax returns for the previous tax year to report profit or income earned for the same type of services provided under the contract; or
(iii) intending to file business or self-employment tax returns for the current tax year to report profit or income earned for the same type of services provided under the contract if the person's business was not operating in the previous tax year; and

(H) meets at least two of the following criteria:

(i) the person is responsible for the satisfactory  completion of services that the person has contracted to perform and is subject to liability for a failure to complete the contracted work, or maintains liability insurance or other insurance policies necessary to protect the employees, financial interests, and  customers of the person's business;
(ii) the person maintains a business location or a business mailing address separate from the location of the individual for whom, or the entity for which, the services are performed;
(iii) the person provides contracted services for two or more different customers within a 12-month period or engages in any kind of business advertising, solicitation, or other marketing efforts reasonably calculated to obtain new contracts to provide similar services.

You can contact the Alaska Chiropractic Society at 907.903.1350 or  

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Alaska Chiropractic Society, PO Box 111507, Anchorage, AK  99511-1507 
Phone: (907) 903-1350   Fax:  (907) 770-3790   Email: