Senate says news carriers are independent contractors, not employees

by Anne Galloway May 1, 2013 vtdigger.org The Senate has approved a measure that would allow newspaper publishers to continue to treat news carriers as independent contractors.
The amendment passed in an 18-10 vote. The underlying bill, which provides temporary relief to businesses that have experienced higher unemployment costs as a result of layoffs association Tropical Storm Irene was approved on a voice vote.
The provision settles the news carriers issue for the Senate for now.
For many years, the status of news carriers has been in question because of confusion over the meaning of existing statutes. In 1985 Vermont Supreme Court ruled that news carriers for the Rutland Herald and Times Argus should be considered employees under existing law, and if the Legislature wanted to carve out an exemption for newspapers it could do so. Numerous measures have been proposed over the years to do just that, but all of them failed.
A revision of the unemployment insurance law in 2006 that excluded direct sellers, created more confusion. That year, the Department of Labor issued a bulletin extending the direct seller exemption to news carriers. Lawmakers have been split on whether that exemption was appropriate. The department reversed that decision in March and cited the 1985 VSC ruling as proof that current law firmly places news carriers in the employee classification.
Sen. Kevin Mullins amendment classifies news carriers as independent contractors not employees.
The independent contractor designation saves publishers about 30 percent on labor costs.
The new legislation must be approved by the House, which has a strong pro-labor contingent. Labor is on the side of counting them as employees so they can be covered by worker's compensation and the wages would count for social security earnings.