Kentucky Senate Passes Bill to Protect General Contractors

By RAE HODGE | February 18, 2014

Labor contractors would be protected from some litigation under a bill that cleared a Senate panel Thursday.

If passed, the bill would insulate primary contractors from any liability for the illegal practices of their subcontractors. The bill also broadens the legal classification of contractors, allowing more types of employees to fall under the definition.

Republican Sen. John Schickel of Union is the bill’s sponsor. He says the measure treats a subcontractor as a separate legal entity, which would be verified through the Labor Cabinet.

Lobbyist Tom Underwood testified with Schickel at the bill’s hearing. Underwood is also the State Director for the National Federation of Independent Business.

“What we’re trying to do here,” said Underwood, “is make sure there’s absolutely no question about who should be an employee, who should be a subcontractor. But the business that is doing it correctly, that is meeting their obligations, should not be penalized because another business is not doing it correctly.

Labor Cabinet Secretary Larry Roberts said the measure would also move unemployment claim responsibilities to the Labor Cabinet, something he said the cabinet is not prepared to handle. He called the measure an unfunded mandate.

Opponents of the bill also included Kentucky State AFL-CIO President Bill Londrigan, who cautioned the committee that removing legal responsibilities from primary contractors would open the door to substandard safety practices at worksites and could deprive subcontractors of legal protection. Londrigan also noted that broadening the legal classification of contractors has allowed some employer abuses to occur.

“This is not just an issue that is related to the construction workers,” said Londrigan. “We’ve had examples of places like factories and other places where every employee in the factory was classified as an independent contractor while doing work as an employee.”

The measure cleared the Senate Committee on Economic Development, Tourism and Labor on a 6-2 vote Thursday.

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