An Act To Standardize the Definition of "Independent Contractor
Maine Legislature, Session 125, LD 1314
Committee Amendment CA_A_H832 (House)
Amends: 5 MRSA §19, 26 MRSA §591, 26 MRSA §591-A, 39-A MRSA §102, 39-A MRSA §105-A, 39-A MRSA §114, 39-A MRSA §401

COMMITTEE AMENDMENT "A " 
to H.P. 960, L.D. 1314, Bill, "An Act To 
Standardize the Definition of "Independent Contractor"" 
Amend the bill by striking out everything after the enacting clause and before the 
summary and inserting the following: 
'Sec. 1. 1 MRS A §1012, sub-§9, as amended by PL 1991, c. 885, Pt. E, § 1 and 
affected by §47, is further amended to read: 
9. 
Self-employed. 
"Self-employed" means that the person qualifies as an 
independent contractor under Title 39-A, section 102, subsection .g 13-A. 
Sec. 2. 5 MRSA §19, sub-§l, ,J, as amended by PL 1991, c. 885, Pt. E, §6 and 
affected by §47, is further amended to read: 
J. 
"Self-employed" means that the person qualifies as an independent contractor 
under Title 39-A, section 102, subsection.g l3-A. 
Sec. 3. 26 MRSA §591, sub-§2, as amended by PL 1985, c. 112, § 1, is further 
amended to read: 
2. Employer. "Employer" means an individual, partnership, association, corporation, 
legal representative, trustee, receiver, trustee in bankruptcy and any common carrier by 
rail, motor, water, air or express company doing business in or operating within the 
State7; and 
Sec. 4. 26 MRS A §591, sub-§3 is enacted to read: 
3. Independent contractor. "Independent contractor" means an individual who 
qualifies as an independent contractor under section 1043, subsection 11, paragraph E. 
Sec. 5. 26 MRSA §591-A is enacted to read: 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT" R" to H.P. 960, L.D. 1314 
§591-A. Employee misclassification 
An employer that intentionally or knowingly misclassifies an employee as an 
independent contractor commits a civil violation for which a fine of not less than $2,000 
and not more than $10,000 per violation may be adjudged. 
A determination of misclassification of a worker as an independent contractor may 
result in the assessment of penalties under section 1051, 1082 or 1225 or Title 39-A, 
section 105-A or 324. 
Sec. 6. 26 MRS A §1043, sub-§l1, ~, as amended by PL 2011, c. 292, §1, is 
repealed and the following enacted in its place: 
E. 
Services performed by an individual for remuneration are considered to be 
employment subject to this chapter unless it is shown to the satisfaction of the bureau 
that the individual is free from the essential direction and control of the employing 
unit, both under the individual's contract of service and in fact, and the employing 
unit proves that the individual meets all of the criteria in subparagraph (1) and criteria 
of at least 3 divisions of subparagraph (2). In order for an individual to be considered 
an independent contractor: 
(1) The following criteria must be met: 
(a) The individual has the essential right to control the means and progress 
of the work except as to final results; 
(b) The individual is customarily engaged in an independently established 
trade, occupation, profession or business; 
(c) The individual has the opportunity for profit and loss as a result of the 
services being performed for the other individual or entity; 
(d) The individual hires and pays the individual's assistants, if any, and, to 
the extent such assistants are employees, supervises the details of the 
assistants' work; and 
(e) The individual makes the individual's services available to some client or 
customer community even if the individual's right to do so is voluntarily not 
exercised or is temporarily restricted; and 
(2) At least 3 of the following criteria must be met: 
(a) 
The individual has a substantive investment in the facilities, tools, 
instruments, materials and knowledge used by the individual to complete the 
work; 
(b) 
The individual IS not required to work exclusively for the other 
individual or entity; 
(c) The individual is responsible for satisfactory completion of the work and 
may be held contractually responsible for failure to complete the work; 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT "A" to H.P. 960, L.D. 1314 
Cd) 
The parties have a contract that defines the relationship and gives 
contractual rights in the event the contract is terminated by the other 
individual or entity prior to completion ofthe work; 
Ce) Payment to the individual is based on factors directly related to the work 
performed and not solely on the amount of time expended by the individual; 
(f) The work is outside the usual course of business for which the service is 
performed; or 
Cg) The individual has been determined to be an independent contractor by 
the federal Internal Revenue Service. 
Sec. 7. 39-A MRSA §102, sub-§13, as amended by PL 2009, c. 452, §4, is 
repealed. 
Sec. 8. 39-A MRSA §102, sub-§13-A is enacted to read: 
13-A. Independent contractor. A person who performs services for remuneration 
is presumed to be an employee unless the employing unit proves that the person is free 
from the essential direction and control of the employing unit, both under the person's 
contract of service and in fact and the person meets specific criteria. In order for a person 
to be an independent contractor: 
A. The following criteria must be met: 
(1) The person has the essential right to control the means and progress of the 
work except as to final results; 
(2) The person is customarily engaged in an independently established trade, 
occupation, profession or business; 
(3) The person has the opportunity for profit and loss as a result of the services 
being performed for the other individual or entity; 
(4) The person hires and pays the person's assistants, if any, and, to the extent 
such assistants are employees, supervises the details of the assistants' work; and 
(5) The person makes the person's services available to some client or customer 
community even if the person's right to do so is voluntarily not exercised or is 
temporarily restricted; and 
B. At least 3 of the following criteria must be met: 
(1) The person has a substantive investment in the facilities, tools, instruments, 
materials and knowledge used by the person to complete the work; 
(2) The person is not required to work exclusively for the other individual or 
entity; 
(3) The person is responsible for satisfactory completion of the work and may be 
held contractually responsible for failure to complete the work; 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT" A" to RP. 960, L.D. 1314 
(4) The parties have a contract that defines the relationship and gives contractual 
rights in the event the contract is terminated by the other individual or entity prior 
to completion of the work; 
(5) 
Payment to the person is based on factors directly related to the work 
performed and not solely on the amount oftime expended by the person; 
(6) The work is outside the usual course of business for which the service is 
performed; or 
(7) The person has been determined to be an independent contractor by the 
federal Internal Revenue Service. 
Sec. 9. 39-A MRSA §105-A, sub-§I, ~B, as enacted by PL 2009, c. 452, §5, is 
repealed and the following enacted in its place: 
B. "Construction subcontractor" means an independent contractor. 
Sec. 10. 39-A MRSA §114, as enacted by PL 2011, c. 176, § 1, is repealed. 
Sec. 11. 39-A MRSA §401, sub-§4, as amended by PL 1999, c. 364, §6, is 
further amended to read: 
4. Liability of landowner. A landowner subject to this Act who contracts to have 
wood harvested from the landowner's property by a contractor who, as an employer, is 
subject to this Act and who has not complied with the provisions of this section and who 
does not comply with the provisions of this section prior to the date of an injury or death 
for which a claim is made is liable to pay to any person employed by the contractor in the 
execution of the work any compensation under this Act that the landowner would have 
been liable to pay if that person had been immediately employed by the landowner. 
A landowner is not liable for compensation if at the time the landowner enters into the 
contract with the contractor, the landowner applies for and receives a predetennination of 
the independent status of the contractor as set forth in section 105, the landowner requests 
and receives a certificate of independent status, issued by the board on an annual basis to 
a contractor, certifying that the contractor harvests forest products in a manner that would 
not make the contractor an employee of the landowner or the landowner requests and 
receives a certificate of insurance, issued by the contractor's insurance carrier, certifying 
that the contractor has obtained the required coverage and indicating the effective dates of 
the policy, and if the landowner requests and receives at least annually similar certificates 
indicating continuing coverage during the performance of the work. A landowner who 
receives a predetennination of the contractor's status as independent contractor or a 
certificate of independent status is only relieved of liability under this paragraph if the 
contract for wood harvesting expressly states that the independent contractor will not hire 
any employees to assist in the wood harvesting without first providing the required 
certificate of insurance to the landowner. 
Notwithstanding section 105, subsection I, paragraph A, a predetennination under 
section 105 related only to a person engaged in harvesting forest products is a conclusive 
presumption that the detennination is correct and section 105, subsection 2 does not apply 
to that detennination. Each party involved in or affected by the predetennination must be 
provided infonnation on the workers' compensation laws and the effect of independent 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT" A 
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contractor status in relation to those laws. A predetermination under section 105 related 
to a person engaged in harvesting forest products is effective for one calendar year or the 
duration of the contract, whichever is shorter. 
A landowner required to pay compensation under this section is entitled to be 
indemnified by the contractor and may recover the amount paid in an action against that 
contractor. A landowner may demand that the contractor enter into a written agreement 
to reimburse the landowner for any loss incurred under this section due to a claim filed 
for compensation and other benefits. The employee is not entitled to recover at common 
law against the landowner for any damages arising from such injury if the employee takes 
compensation from that landowner. 
Landowners willfully acting to circumvent the provisions of this section by using 
coercion, intimidation, deceit or other means to encourage persons who would otherwise 
be considered employees within the meaning of this Act to pose as contractors for the 
purpose of evading this section are liable subject to the provisions of section 324, 
subsection 3. Nothing in this section may be construed to prohibit an employee from 
becoming a contractor subject to the provisions of section 102, subsection -lJ. 13-A. 
Sec. 12. Reports. The Commissioner of Labor or the commissioner's designee in 
cooperation with the Executive Director of the Workers' Compensation Board or the 
executive director's designee shall submit 2 interim reports and one comprehensive final 
report to the joint standing committee of the Legislature having jurisdiction over labor 
matters. The first interim report is due February 1, 2013 and must include a review of the 
implementation of the independent contractor criteria under this Act. This report must 
include a break down of information by industry and include agency audit finding data 
for 2011 and 2012; the number of workers misclassified as independent contractors; and, 
specifically for unemployment insurance, the overreporting and underreporting of wages 
and unemployment contributions credited or due. The 2nd report is due June 2, 2014 and 
must include agency audit finding data for 2013, the effects of the criteria on 
misclassification and an update of the information required in the initial report. 
The comprehensive final report must break information down by industry and is due 
to the joint standing committee of the Legislature having jurisdiction over labor matters 
by February 1, 2015. This report must include the following: 
1. An analysis of the new criteria in comparison with previous criteria for both 
workers' compensation and unemployment insurance; 
2. The identification of any issues with the interpretation or the understanding of the 
new criteria language by agency staff, businesses and workers; 
3. The identification of any issues in the application of the criteria across different 
industries and occupations; 
4. Data, to the extent possible, on the potential effect of identified misclassification 
on the affected workers with regard to loss of fringe benefits or other workplace benefits; 
and 
5. Data on the effects of the use of the new misclassification penalty. 
Sec. 13. Effective date. This Act takes effect December 31, 2012.' 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT ,,(l, to H.P. 960, L.D. 1314 
SUMMARY 
This amendment, which is the majority report, standardizes the definition of 
"independent contractor" for employment security law and workers' compensation law. It 
clearly states the penalties for the misc1assification of a worker as an independent 
contractor. The amendment also requires 2 interim reports and a final comprehensive 
report to the joint standing committee of the Legislature having jurisdiction over labor 
matters from the Workers' Compensation Board and the Department of Labor on the 
implementation of the new independent contractor definition. 
FISCAL NOTE REQUIRED 
(See attached) 
COMMITTEE AMENDMENT 
Approved: 03/14112 :;t;yac. 
LD 1314 
LR 804(02) 
An Act To Standardize the Definition of "Independent Contractor" 
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Fiscal Note for Bill as Amended by Committee Amendment 'A"( H <g3d-) 
Committee: Labor, Commerce, Research and Economic Development 
Fiscal Note Required: Yes 
Fiscal Note 
Minor cost increase - General Fund 
Minor revenue increase - General Fund 
Correctional and Judicial Impact Statements 
Increases the number of civil violations. 
The collection of additional fines may also increase General Fund revenue by minor amounts. 
Fiscal Detail and Notes 
Additional costs to the Department of Labor and the Workers' Compensation Board to prepare and submit the required 
report can be absorbed within each agency's existing budgeted resources. 
LR0804(02) - Fiscal Note - Page 1 of 1