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F I S C A L I M P A C T R E P O R T

SPONSOR Lujan, B

DATE TYPED 3/10/2005 HB 850/aHBIC

SHORT TITLE Newspaper Vendor Workers’ Comp Coverage

SB

ANALYST Dunbar

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

See Narrative

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to HB653 and SB657

SOURCES OF INFORMATION

LFC Files

Responses Received From

Department of Labor (DOL)

Workers’ Compensation Administration (WCA)

SUMMARY

Synopsis of HBIC Amendment

The House Business and Industry Committee amendment to House Bill 850 deletes language in

the Workers Compensation Act defining “Work not Casual Employment” as it relates to news-

papers vendors who sell newspapers along or in a public thoroughfare. New language is inserted

pertaining to these vendors declaring a newspaper shall either provide accidental injury insurance

or workers’ compensation insurance, even though the vendor is an independent contractor.

Current approved workers' compensation policies require that an employer/employee relation-

ship exist to write the coverage. WCA indicates that a policy may have to be developed by a car-

rier and approved by the Insurance Department as a "manuscript policy" (special policy). It may

be preferable that a specialized policy be written than to confuse the issue with the definition of

employee as the last version of the bill tried to do. Testimony in previous hearing indicted that

some newspapers were providing accidental injury insurance to these vendors.

House Bill 850/aHBIC- Page 2

Synopsis of Original Bill

House Bill 850 adds vendors who sells newspapers” along or in” a public thoroughfare to those

covered by the workers’ compensation act by declaring that they cannot be considered independ-

ent contractors.

The Workers’ Compensation Advisory Council has scheduled this bill for review on February

22d.

Significant Issues

The WCA does not have information pertaining to the number of accidents that have occurred

regarding newspaper vendors or how many individuals will be covered in that category. DOL

also could not provide information on unemployment compensation that was provided to this

category of individuals.

ADMINISTRATIVE IMPLICATIONS

The additional case load can be absorbed without additional resources by WCA.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

HB653 and SB657 are different bills that attempt to define independent contracting elsewhere in

the law. If either were enacted, then issues of timing in the signing of bills into law could affect

the bill.

TECHNICAL ISSUES

The WCA notes that the vendor could be considered a self-employed business person, who is not

subject to the Workers Compensation Act because of the numerical exclusion, or could be con-

sidered an employee of the newspaper. Since the sponsor wishes the newspaper to provide in-

surance coverage, an amendment would be helpful to clarify the intent.

If a vendor sells multiple newspapers which employer provides the coverage.

Will the employers disallow street vending if they incur additional costs.

If the bill is amended to define the vendors as employees; will additional employee benefits be

available to these individuals.

OTHER SUBSTANTIVE ISSUES

The NMDOL does not administer Workers’ Comp., however, it does administer the Unemploy-

ment Insurance program. When in doubt about applying the definition of employee vs inde-

pendent contractor, the DOL administers the ABC test. The ABC test comprises the following

questions:

ABC Test – 51-1-42 Section F

A)

Is there any type of control or direction by the employer to the employee.

House Bill 850/aHBIC- Page 3

B)

Was the service provided during the course of the business.

C)

Are they independently established in the business. i.e., contractor’s license, reg-

istered at Tax & Revenue, do they invoice the employer.

Based on the answers to these – a determination is made as to whether the individual is an inde-

pendent contractor or an employee. Each case is handled independently.

BS/lg:yr