NC "employee classification" law warrants caution but doesn't change substantive law

On August 11, Gov. Roy Cooper signed into law the North Carolina Employee Fair Classification Act. The portion of the legislation that deals with worker classifications will take effect December 31.

The legislation does not change existing definitions of “employee” and “independent contractor” under state law but creates an Employee Classification Section of the North Carolina Industrial Commission, which will be empowered to receive and investigate reports of worker misclassification, and to provide for information sharing among various state agencies, including the Department of Labor, the Division of Employment Security, the Department of Revenue, and the Industrial Commission.

In short, the law provides a mechanism for workers to make complaints and may make it easier for affected state agencies to pursue employers who misclassify their workers.

State licensing boards will be required to ask applicants to disclose any investigations for employee misclassification and the outcome for a period of time to be determined. Failure to comply will result in denial of the license or permit.

Employers will be required to post a notice that includes the following information:

*That workers must be treated as employees unless they are independent contractors.

*That workers who believe they have been misclassified have the right to report the alleged misclassification to the Employee Classification Section.

*The physical and email addresses and telephone number where alleged misclassifications can be reported.

The classification provisions apply to “employees” as defined in the North Carolina Wage and Hour Act, the Employment Security Act, the Workers’ Compensation Act, and Chapter 105 of the General Statutes (Taxation).

Elsewhere, the legislation also authorizes the Industrial Commission to adopt guidelines for the use of opioids and pain management treatment for compensable workplace injuries and illnesses.

Image Credit: From flickr, Creative Commons license, by orionpozo.

Robin Shea has 30 years' experience in employment litigation, including Title VII and the Age Discrimination in Employment Act, the Americans with Disabilities Act (including the Amendments Act). 
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