Georgia Bill HB 389, signed into law in May of this year, went into effect on July 1 and changes how the difference between employees and independent contractors will be determined for the purpose of unemployment insurance. Logistics brokers that work with independent contractors in Georgia would be wise to examine these changes and ensure that their practices comply with the new standards.
Originally Georgia law merely required that independent contractors be independently established businesses free from control or direction over their performance of services, a restatement of the traditional common-law test for independent contractor status. However, HB389 sets forth seven factors that must be taken into consideration in determining whether an individual is free from direction and control. These factors are whether the individual:
- Is allowed to work for others;
- Can accept or reject work without consequence;
- Is not given minimum required work hours;
- Has the discretion to set their own work schedule;
- Receives only minimal instructions (such as locations or requested deadlines) without direct oversight or supervision;
- Can work without territorial or geographic restrictions; and
- Is not required to act in a manner that demonstrates employment, as the rules and regulations of the Commissioner of Labor prescribe.
Many logistics brokers probably meet most of these factors in their independent contractor relationships already, but this is a good opportunity to review compliance practices and update policies as needed. Furthermore, the seventh factor gives wide latitude to the Commissioner of Labor to determine what other requirements demonstrate employment, so brokers should be paying attention to and, if possible, participating in the Commissioner’s rulemaking process.
HB 389 also adds an exemption for app-based services that makes it easier for individuals working with them to qualify as independent contractors so long as their contracts prevent the employer from placing certain restrictions on those individuals. This exemption is narrowly targeted at “network companies” that maintain their own online applications or platforms to facilitate the transportation of passengers or goods.
SCI is willing to work with its clients that Broker deliveries in the State of Georgia to offer advice and compliance solutions.