House File 2772 H-8423 Amend House File 2772 as follows: 1 1. Page 19, after line 15 by inserting: 2 < DIVISION ___ 3 MISCLASSIFICATION OF EMPLOYEES 4 Sec. ___. Section 84A.5, subsection 3, Code 2026, is amended 5 to read as follows: 6 3. The department of workforce development is responsible 7 for administration of unemployment compensation benefits 8 and collection of employer contributions under chapter 96 , 9 providing for the delivery of free public employment services 10 established pursuant to chapter 96 , other job placement and 11 training programs established pursuant to section 84A.6 , 12 employment agencies under chapter 84I , enforcement of chapter 13 95 relating to misclassification, and the delivery of services 14 located throughout the state. 15 Sec. ___. NEW SECTION . 95.1 Definitions. 16 As used in this chapter, unless the context otherwise 17 requires: 18 1. “Department” means the department of workforce 19 development. 20 2. “Employee” means an individual who performs services in 21 this state for an employer in return for remuneration and who 22 is considered an employee under regulations or guidelines of 23 the federal internal revenue service in effect as of the date 24 of an alleged misclassification. 25 3. “Employer” means a person who employs an individual in 26 this state for wages. 27 4. “Independent contractor” means an individual who 28 performs services in this state for an employer in return for 29 remuneration and who is considered an independent contractor 30 under regulations or guidelines of the federal internal 31 revenue service in effect as of the date of an alleged 32 misclassification. 33 5. “Misclassify” or “misclassification” means to classify an 34 individual for employment purposes as an independent contractor 35 -1- HF 2772.4306 (1) 91 nls/ko 1/ 3 #1.

rather than an employee, contrary to regulations or guidelines 1 of the federal internal revenue service in effect as of the 2 date of an alleged misclassification, with the effect of 3 denying the individual eligibility for an employment benefit 4 provided by law or for a government program. 5 Sec. ___. NEW SECTION . 95.2 Misclassification of employees 6 prohibited. 7 An employer shall not willfully misclassify an individual. 8 Sec. ___. NEW SECTION . 95.3 Civil penalty —— procedures. 9 1. An employer who violates section 95.2 shall be subject 10 to a civil penalty of up to five thousand dollars per 11 misclassified individual for a first offense, up to seven 12 thousand five hundred dollars per misclassified individual 13 for a second offense, and up to ten thousand dollars per 14 misclassified individual for each subsequent offense. 15 2. The department shall provide written notice to an 16 employer prior to imposition of a civil penalty under this 17 section. An employer may contest and seek judicial review of a 18 determination of the department under this chapter pursuant to 19 chapter 17A; however, for purposes of this section, an employer 20 shall bear the burden to demonstrate by a preponderance of the 21 evidence that the employer did not violate section 95.2. 22 3. Upon a final determination of the department that an 23 employer violated section 95.2 and the conclusion of the period 24 for any appeals, all of the following apply: 25 a. The department shall bring an action in district court to 26 collect the penalties provided in this section. The department 27 shall remit any penalties collected to the treasurer of state 28 for deposit in the general fund. 29 b. The department shall refer the violation to a county 30 attorney. A county attorney shall not be bound by any 31 determination of the department. 32 Sec. ___. NEW SECTION . 95.4 Criminal penalty. 33 In addition to the civil penalties provided in section 95.3, 34 an employer who violates section 95.2 commits a class “D” 35 -2- HF 2772.4306 (1) 91 nls/ko 2/ 3

felony. 1 Sec. ___. NEW SECTION . 95.5 Enforcement —— rules. 2 1. The department shall enforce this chapter. The 3 department may establish additional procedures to implement 4 this chapter and may employ inspectors and any other personnel 5 deemed necessary to implement this chapter, subject to the 6 provisions of chapter 8A, subchapter IV. 7 2. The department shall adopt rules pursuant to chapter 17A 8 to administer this chapter. 9 Sec. ___. APPLICABILITY. This division of this Act applies 10 to misclassification, as defined in section 95.1, as enacted by 11 this Act, of an individual by an employer occurring on or after 12 the effective date of this Act. > 13 2. Title page, by striking lines 5 and 6 and inserting 14 < certain regents institutions; codifying the housing renewal 15 program; and prohibiting the misclassification of employees; 16 providing penalties, and including applicability provisions. > 17 3. By renumbering as necessary. 18 ______________________________ COOLING of Linn -3- HF 2772.4306 (1) 91 nls/ko 3/ 3 #2. #3.