Kentucky already has a growing problem with worker misclassification, in which employers inaccurately and often unlawfully treat employees as independent contractors. These workers are deprived of their rights, protections and benefits as a result, and Kentucky is deprived of tax dollars.
House Bill (HB) 732 would make this problem much worse by creating a new opening for employers to misclassify workers, further undermining job quality for Kentuckians. Under current law, a worker is considered an employee if they perform work that is part of the company’s regular course of business and that would otherwise have to be done by the employer or an employee. Employers can treat someone as an independent contractor only if they perform a specialized job that is not similar or connected to the business and whose work the employer has no direction or control over.
One indicator that an individual is an employee is that they receive fringe benefits from the employer. But HB 732 seeks to get around that by allowing businesses to kick in funds toward one or more employee benefits for contractors without accepting the full responsibilities associated with employment.
In doing so, HB 732 essentially seeks to create a new, second-class employment tier that employers would be incentivized to shift workers to, saving corporations money and liability while leaving their workers underpaid and at greater risk.
Misclassification is already a big problem in Kentucky
When workers are ...
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