Alaska’s Division of Worker’s Compensation now has a clearly defined definition of an independent contractor to help decide whether an injured worker is eligible for Workers’ Compensation or not.
The length definition is contained in House Bill 79, which was signed into law on Aug. 24 by Gov. Bill Walker in Fairbanks, in conjunction with the Alaska AFL-CIO Biennial Convention.
“Providing a clear definition of independent contractor will help businesses be successful and in compliance and will help workers clearly understand what constitutes independent contractor status,” said Labor Commissioner Heidi Drygas.
The new law “doesn’t change who is an independent contractor,” notes Marie Marx, director of the Alaska Division of Worker’s Compensation. “It just defines clearly who they are.”
The goal, she said, is to prevent employers from going out of business from huge injury losses and also to be sure that workers who are injured on the job are covered as required by law.
“This bill strengthens the system through a series of smart reforms that will help prevent fraud and ensure the system is there when workers need it the most,” said Rep. Andy Josephson, D-Anchorage, who carried the governor’s bill on the House floor. “Perhaps the most significant reform in the bill is to clearly define the distinction between independent contractors and employees. This clarification will help prevent good actors from going out of business from fines while making it more difficult for bad actors to fraudulently avoid paying workers’ compensation insurance.”
The bill also streamlines the process for obtaining a corporate exemption from workers’ compensation coverage, allows businesses to report data and make payments electronically, and increases funding for the Workers’ Compensation Safety Administrative Account, which funds the fraud unit that tracks down fraud and abuse.