Gov. Herbert signs worker classification bills

Published: Tuesday, April 26 2011 5:29 p.m. MDT

SALT LAKE CITY — Gov. Gary Herbert signed a series of bills Tuesday that he says corrects significant problems in the marketplace — worker misclassification.

It's a practice that blurs the lines in employee/owner relationships, affects payroll taxes, workers' compensation and unemployment coverage.

SB35, sponsored by Sen. Karen Mayne, D-West Valley City, defines what an employee is and what an owner is, and establishes rules about who can be classified as a worker versus an owner of an LLC business.

To be classified as an owner, a person must be an active manager, hold at least 8 percent ownership interest, or not be subject to workplace supervision.

"If you are not doing what you should do as a business, we're after you," she said. "Because we will not tolerate those businesses that do not cherish and take care of our workforce here in the state of Utah."

Mayne, who called the bill landmark legislation, says this isn't only a problem in Utah.

"This is a problem that's nationwide," she said. "And we were the first, really, one of the first states to really face it."

The bill levels the playing field and makes sure that there is fairness in the marketplace, Herbert said.

The bill applies only to the construction trade, but Mayne said she hopes it "morphs" into other industries as well.

Viviane Vo-Duc

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