The article “S. 2044: Obama Weighs in on Independent Contractors”, posted in February 25, 2008, has put the issue of worker’s compensation under the spotlight in this year’s vital election issues that presidential candidates must give attention to.
The article was based on a news item about the bill sponsored by Senator Barack Obama, now a Democrat contender in the presidential elections. S. 2044 or better known as ‘Independent Contractor Proper Classification Act’, confronts the issue that many employers may face once the proposed amendments are made.
According to Obama's bill, the Revenue Act of 1978 must be amended in three key areas:
- It would require employers to treat workers misclassified as independent contractors as employees for employment tax purposes
- It would eliminate the defense of "industry practice" as a justification for misclassifying workers as independent contractors.
- It hopes to repeal a ban on Treasury regulations or revenue rulings on employee/independent contractor classification issues
Among its many effects, the bill would also enable workers to petition the Treasury Secretary for clarification of their status. Added to this, it would prohibit employer retaliation against any workers filing these petitions.
Moreover, the petition would be added to required workplace postings regarding employment rights. Finally, the bill requires any employer hiring an "independent contractor" to provide the following notice to the individual:
‘Each employer shall notify any individual who is hired...as an independent contractor...of the Federal tax obligations of an independent contractor, the labor and employment law protections that do not apply to independent contractors, and the right of such independent contractors to seek a status determinations from the IRS.’
Once approved, the amendments could pave the way for many so-called ‘independent contractors’ and employees to enjoy workers compensation which regular workers and employees are entitled to.
Workers compensation benefits are given to workers who are injured in work-related accidents. Under the law, the workers' compensation system would provide replacement income, medical expenses, and sometimes, vocational rehabilitation benefits. This includes on-the-job training, schooling, or job placement assistance.
In most states, employers are required to purchase insurance for their employees from a workers' compensation insurance company called as an insurance carrier.
By all means, this bill will help improve treatment of our workers and its passing can surely benefit countless people. At this time, we can only hope that this bill does not get stuck too long in the committee hearing.