Employee vs. contractor rules need changing
I strongly urge our legislators to support H.331, “An act relating to worker’s compensation.”
I am a Colchester resident and own a small business in Burlington. We have recently decided to dismiss two people whom we had been paying to work for us on a limited basis. My partner came home one night and literally said, “we cannot afford to have employees.”
Due to Vermont’s extremely burdensome definition of employee (vs. independent contractor), on Jan. 1, we changed their status in our little company. Previously, we had treated them (with their permission and understanding) as independent contractors. Then we became aware of the Vermont Department of Labor ABC Test used to determine if a person is an employee or an independent contractor. The test is so rigid that it is nearly impossible to contract with an individual, even on a part-time, seasonal or temporary basis and even if they work out of their own home with very little direction from the company.
Once they are classified as an employee, all the state bureaucracy flows over you: unemployment insurance, worker’s compensation, paperwork, fees, etc. The Vermont Department of Labor website even admits that the Vermont definition of independent contractor is more strict than the IRS definition. This means that some one you hire to do a certain job might be considered an employee for Vermont purposes but an independent contractor for IRS purposes. How messed up is that? And for what benefit?
Vermonters are known for putting together a patchwork of employment. Many people have multiple part time jobs either by choice or necessity. A lot of individuals don’t have a typical 9-5 job with one employer but make a go of it by working in many capacities. And this arrangement works for many people and they make a decent living.
After dealing with the state, and worker’s comp, and unemployment insurance, and all related requirements revolving around “employment,” we have decided we cannot afford to keep these two individuals on, even in the very part-time roll they had in our business.
We enjoyed working with them and they provided valuable services and we paid them well as independent contractors, but between the money paid to the state and the time spent on the paperwork and bureaucracy, it was not possible to continue.
These regulations are unbelievably burdensome and overbearing. H.331 would offer small businesses some relief from the ridiculous ABC Test used by the Department of Labor. The government must get out of the pockets of small business and the lives of Vermonters. You’re killing us.