CONSTRUCTION Accounting ARTICLE -
New Massachusetts Independent Contractor Law

On July 19, 2004, a change in the Massachusetts definition of "independent contractor" was enacted. This law change is part of "An Act Further Regulating Public Construction in the Commonwealth" that was signed by Governor Romney on that date.  The law sets forth the presumption that a worker is an employee unless each of the following factors are present:

1. the individual is free from control and direction in connection with the performance of the service, both under his contract for the performance of service and in fact; and

2. the service is performed outside the usual course of business of the employer; and,

3. the individual is customarily engaged in an independently established trade, occupation, profession or business of the same nature as that involved in the service performed. 

With respect to individuals and partnerships, carrying worker's compensation insurance is no longer a factor.  Even though the new legislation is part of a bill that addresses problems relating to public works projects, it also applies to the private sector. Civil and criminal penalties for violations can be brought against the business entity, corporate officer and management who are responsible for affected workers. 

The Office of the Attorney General can easily obtain information to determine construction companies that may be in violation of this law.  As of 1/1/2004, the Massachusetts "New Hire Reporting" requirements were extended to the reporting of "newly-hired independent contractors".   The reporting is required:

• If an independent contractor is re-hired under a new contract, send a report within 14 days of the independent contractor’s first day under the new contract.
• If there has been a lapse in pay of thirty calendar days or more, send a report within 14 days of the individual’s first day back to work.

The Office of the Attorney General issued an advisory stating that they feel worker misclassification is a serious violation of state law.  In order to protect those that have previously been at a disadvantage, the AG states that they will aggressively enforce this issue.

To view the complete law please click here: http://www.mass.gov/legis/laws/seslaw04/sl040193.htm.

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