S.F. 2296 Section 1. Section 85.61, subsection 11, paragraph c, 1 subparagraph (3), Code 2020, is amended to read as follows: 2 (3) (a) For purposes of this subparagraph, “owns” includes 3 but is not limited to holding legal title to a vehicle or being 4 a party to an agreement for the conditional sale or lease of 5 the vehicle that includes the party’s right to purchase upon 6 performance of conditions stated in the agreement with an 7 immediate right of possession. In the event a mortgagor of 8 a vehicle is entitled to possession of the vehicle, then the 9 conditional vendee or lessee and the mortgagor shall both be 10 deemed to own the vehicle. 11 (b) An owner-operator who, as an individual or partner, 12 or shareholder of a corporate owner-operator, owns a 13 vehicle licensed and registered as a truck, road tractor, or 14 truck tractor by a governmental agency, is an independent 15 contractor while performing services in the operation of the 16 owner-operator’s vehicle if all of the following conditions are 17 substantially present: 18 (a) (i) The owner-operator is responsible for the 19 maintenance of the vehicle. 20 (b) (ii) The owner-operator bears the principal burden 21 of the vehicle’s operating costs, including fuel, repairs, 22 supplies, collision insurance, and personal expenses for the 23 operator while on the road. 24 (c) (iii) The owner-operator is responsible for supplying 25 the necessary personnel to operate the vehicle, and the 26 personnel are considered the owner-operator’s employees. 27 (d) (iv) The owner-operator’s compensation is based on 28 factors related to the work performed, including a percentage 29 of any schedule of rates or lawfully published tariff, and not 30 on the basis of the hours or time expended. 31 (e) (v) The owner-operator determines the details and means 32 of performing the services, in conformance with regulatory 33 requirements, operating procedures of the carrier, and 34 specifications of the shipper. 35 -1- LSB 6305SV (1) 88 mo/ns 1/ 5

S.F. 2296 (f) (vi) The owner-operator enters into a contract which 1 specifies the relationship to be that of an independent 2 contractor and not that of an employee. 3 Sec. 2. Section 91A.2, subsection 3, Code 2020, is amended 4 to read as follows: 5 3. a. “Employee” means a natural person who is employed in 6 this state for wages by an employer. Employee also includes a 7 commission salesperson who takes orders or performs services 8 on behalf of a principal and who is paid on the basis of 9 commissions but does not include persons who purchase for their 10 own account for resale. 11 b. For the purposes of this chapter , the following persons 12 engaged in agriculture are not employees: 13 a. (1) The spouse of the employer and relatives of 14 either the employer or spouse residing on the premises of the 15 employer. 16 b. (2) A person engaged in agriculture as an owner-operator 17 or tenant-operator and the spouse or relatives of either who 18 reside on the premises while exchanging labor with the operator 19 or for other mutual benefit of any and all such persons. 20 c. (3) Neighboring persons engaged in agriculture who are 21 exchanging labor or other services. 22 c. For purposes of this chapter, “employee” does not include 23 an independent contractor as described in section 85.61, 24 subsection 11, paragraph “c” , subparagraph (3). 25 Sec. 3. Section 91D.1, Code 2020, is amended by adding the 26 following new subsection: 27 NEW SUBSECTION . 3A. For purposes of this chapter, 28 “employee” does not include an independent contractor as 29 described in section 85.61, subsection 11, paragraph “c” , 30 subparagraph (3). 31 Sec. 4. Section 96.19, subsection 17, Code 2020, is amended 32 to read as follows: 33 17. “Employing unit” means any individual or type 34 of organization, including this state and its political 35 -2- LSB 6305SV (1) 88 mo/ns 2/ 5

S.F. 2296 subdivisions, state agencies, boards, commissions, and 1 instrumentalities thereof, any partnership, association, trust, 2 estate, joint stock company, insurance company or corporation, 3 whether domestic or foreign, or the receiver, trustee in 4 bankruptcy, trustee or successor thereof, or the legal 5 representative of a deceased person, which has or subsequent 6 to January 1, 1936, had in its employ one or more individuals 7 performing services for it within this state. All individuals 8 performing services within this state for any employing unit 9 which maintains two or more separate establishments within this 10 state shall be deemed to be employed by a single employing 11 unit for all the purposes of this chapter . Whenever any 12 employing unit contracts with or has under it any contractor or 13 subcontractor for any work which is part of its usual trade, 14 occupation, profession, or business, unless the employing unit 15 as well as each such contractor or subcontractor is an employer 16 by reason of subsection 16 or section 96.8, subsection 3 , the 17 employing unit shall for all the purposes of this chapter be 18 deemed to employ each individual in the employ of each such 19 contractor or subcontractor for each day during which such 20 individual is engaged in performing such work; except that each 21 such contractor or subcontractor who is an employer by reason 22 of subsection 16 or section 96.8, subsection 3 , shall alone 23 be liable for the contributions measured by wages payable to 24 individuals in the contractor’s or subcontractor’s employ, and 25 except that any employing unit who shall become liable for and 26 pay contributions with respect to individuals in the employ of 27 any such contractor or subcontractor who is not an employer 28 by reason of subsection 16 or section 96.8, subsection 3 , may 29 recover the same from such contractor or subcontractor, except 30 as any contractor or subcontractor who would in the absence 31 of subsection 16 or section 96.8, subsection 3 , be liable 32 to pay said contributions, accepts exclusive liability for 33 said contributions under an agreement with such employer made 34 pursuant to general rules of the department. Each individual 35 -3- LSB 6305SV (1) 88 mo/ns 3/ 5

S.F. 2296 employed to perform or to assist in performing the work of any 1 agent or employee of an employing unit shall be deemed to be 2 employed by such employing unit for all the purposes of this 3 chapter , whether such individual was hired or paid directly by 4 such employing unit or by such agent or employee, provided the 5 employing unit had actual or constructive knowledge of such 6 work, and provided, further, that such employment was for a 7 total of not less than eight hours in any one calendar week. 8 An employing unit shall not be deemed to employ an independent 9 contractor as described in section 85.61, subsection 11, 10 paragraph “c” , subparagraph (3). 11 EXPLANATION 12 The inclusion of this explanation does not constitute agreement with 13 the explanation’s substance by the members of the general assembly. 14 This bill regards persons who are deemed independent 15 contractors when performing services while operating certain 16 vehicles, for purposes of certain workers’ compensation, wage, 17 and unemployment requirements. 18 Under Code chapter 85 (workers’ compensation), a worker 19 or employee is entitled to certain workers’ compensation 20 benefits. However, the terms “worker” and “employee” do not 21 include an independent contractor. An owner-operator who owns 22 a vehicle licensed and registered as a truck, road tractor, or 23 truck tractor is considered an independent contractor while 24 performing services in the operation of the owner-operator’s 25 vehicle if certain conditions apply. The bill defines the term 26 “owns” as it relates to an owner-operator who owns a vehicle 27 and qualifies as an independent contractor for purposes of Code 28 chapter 85. By operation of law and pursuant to Code chapter 29 87 (workers’ compensation or employers’ liability insurance), 30 a motor carrier who contracts with an owner-operator who is 31 acting as an independent contractor under the bill is not 32 required to insure the motor carrier’s liability for the 33 owner-operator nor is the motor carrier required to purchase 34 compensation liability insurance for the owner-operator or its 35 -4- LSB 6305SV (1) 88 mo/ns 4/ 5

S.F. 2296 employees (Code sections 87.1 and 87.23). 1 The bill excludes from the term “employee” in Code chapters 2 91A (wage payment collection) and 91D (minimum wage) an 3 owner-operator performing services while operating their 4 vehicle who qualifies as an independent contractor under 5 the bill. By operation of law, an employer is exempt from 6 certain wage payment collection requirements and minimum wage 7 requirements as it relates to non-employees. Furthermore, 8 under Code chapter 91B, such non-employees are not entitled to 9 certain rights regarding access to information and bringing 10 certain claims against employers who release information. 11 The bill also provides that an employing unit, as defined 12 in Code chapter 96 (employment security and unemployment 13 compensation), shall not be deemed to employ an owner-operator 14 performing services while operating their vehicle who qualifies 15 as an independent contractor under the bill. By operation of 16 law, an employing unit is exempt from certain unemployment 17 compensation requirements as it relates to persons it does not 18 employ. 19 -5- LSB 6305SV (1) 88 mo/ns 5/ 5