SENATE BILL 657

47th legislature - STATE OF NEW MEXICO - first session, 2005

INTRODUCED BY

Cisco McSorley

AN ACT

RELATING TO EMPLOYMENT; ENACTING THE INDEPENDENT CONTRACTOR STATUS ACT; ESTABLISHING A PRESUMPTION OF EMPLOYER AND EMPLOYEE RELATIONSHIP; SETTING STANDARDS TO INDICATE WHEN A WORKER IS AN INDEPENDENT CONTRACTOR AND NOT AN EMPLOYEE; IMPOSING CRIMINAL PENALTIES AND LICENSE SANCTIONS FOR IMPROPERLY REPORTING AN EMPLOYEE AS AN INDEPENDENT CONTRACTOR.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     Section 1. A new section of Chapter 50, Article 4 NMSA 1978 is enacted to read:

     "[NEW MATERIAL] SHORT TITLE.--Sections 1 through 5 of this act may be cited as the "Independent Contractor Status Act"."

     Section 2. A new section of Chapter 50, Article 4 NMSA 1978 is enacted to read:

     "[NEW MATERIAL] DEFINITIONS.--As used in the Independent Contractor Status Act:

          A. "license" includes the whole or a part of any state agency-issued license, permit, certificate, approval, registration, charter, membership, statutory exemption or other form of permission required by law; and

          B. "state agency" means a department, commission, board, government corporation or educational institution of this state." 

     Section 3. A new section of Chapter 50, Article 4 NMSA 1978 is enacted to read:

     "[NEW MATERIAL] EMPLOYER AND EMPLOYEE RELATIONSHIP-- INDEPENDENT CONTRACTOR.--For purposes of the employer and employee relationship in this state, except as otherwise provided by law, a person providing labor or services for compensation shall be considered to be and have the status of an employee and shall not be considered to be or have the status of an independent contractor unless the following standards indicative of an independent contractor are met:

          A. the person providing labor or services is free from direction and control over the means and manner of providing the labor or services, subject only to the right of the person for whom the labor or services are provided to specify the desired results;

          B. the person providing labor or services obtains business registrations or licenses required by state law or local ordinance for the person to provide the labor or services;

          C. the person providing labor or services furnishes the tools or equipment necessary to provide the labor or services;

          D. the person providing labor or services has the authority to hire and fire employees to perform the labor or services;

          E. payment for labor or services is made upon completion of the performance of specific portions of a project or is made on the basis of a periodic retainer; and

          F. the person providing labor or services represents to the public that the labor or services are to be provided by an independently established business. A person is engaged in an independently established business when four or more of the following circumstances exist:

                (1) the labor or services are performed primarily at a location separate from the person's residence or in a specific portion of the residence that is set aside for performing labor or services;

                (2) commercial advertising or business cards are purchased by the person, or the person is a member of a trade or professional association;

                (3) telephone or email listings used for the labor or services are different from the person's personal listings;

                (4) the labor or services are performed only pursuant to a written contract;

                (5) the labor or services are performed for two or more persons within a period of one year; or

                (6) the person assumes financial responsibility for errors and omissions in labor or services as evidenced by insurance, performance bonds and warranties relating to the labor or services being provided."

     Section 4. A new section of Chapter 50, Article 4 NMSA 1978 is enacted to read:

     "[NEW MATERIAL] INDEPENDENT CONTRACTOR--IMPROPER REPORTING--PENALTY.--An employer who intentionally reports to a state agency that an employee is an independent contractor when the employee's status does not meet the standards indicative of an independent contractor as identified in Section 3 of the Independent Contractor Status Act is guilty of a misdemeanor and shall be punished by a fine of not more than five thousand dollars ($5,000) or by imprisonment for a definite term not to exceed six months or both."

     Section 5. A new section of Chapter 50, Article 4 NMSA 1978 is enacted to read:

     "[NEW MATERIAL] INDEPENDENT CONTRACTOR--IMPROPER REPORTING--LICENSE SANCTIONS.--Conviction of an employer for violating Section 4 of the Independent Contractor Status Act shall be grounds for a state agency to take action to suspend, revoke or refuse to renew a license issued to that employer. An action to suspend, revoke or refuse to renew the employer's license shall be brought by the state agency issuing the license pursuant to that agency's process and procedure, including right of appeal, for those actions as provided by law or rule."

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