SENATE BILL No. 404
DIGEST OF INTRODUCED BILL
Citations Affected: IC 6-3-7-5; IC 22-3; IC 22-4-34-2.
Synopsis: False statements to state agencies. Provides that an
employee who knowingly or intentionally makes a false statement of
independent contractor status to the department of state revenue
commits a Class D felony. Provides that an employer or employee shall
not classify an employee as an independent contractor for the sole or
primary purpose of avoiding worker's compensation law, and that a
violation is a Class A infraction. Provides that a person who makes a
false representation that an employee is an independent contractor for
the purpose of avoiding unemployment compensation law commits a
Class C misdemeanor. Makes technical corrections. Makes conforming
Effective: July 1, 2007.
January 16, 2007, read first time and referred to Committee on Corrections, Criminal, and
First Regular Session 115th General Assembly (2007)
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between statutes enacted by the 2006 Regular Session of the General Assembly.
SENATE BILL No. 404
A BILL FOR AN ACT to amend the Indiana Code concerning labor
Be it enacted by the General Assembly of the State of Indiana:
SOURCE: IC 6-3-7-5; (07)IN0404.1.1. -->
SECTION 1. IC 6-3-7-5 IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2007]: Sec. 5. (a) As used in this section,
"independent contractor" refers to a person described in
IC 22-3-6-1(b)(7) or IC 22-3-7-9(b)(5).
(b) As used in this section, "person" means an individual, a
proprietorship, a partnership, a joint venture, a firm, an association, a
corporation, or other legal entity.
(c) An independent contractor who does not make an election under:
(1) IC 22-3-6-1(b)(4) or IC 22-3-6-1(b)(5) is not subject to the
compensation provisions of IC 22-3-2 through IC 22-3-6; or
(2) IC 22-3-7-9(b)(2) or IC 22-3-7-9(b)(3) is not subject to the
compensation provisions of IC 22-3-7;
and must file a statement with the department with supporting
documentation of independent contractor status and obtain a certificate
of exemption under this section.
(d) An independent contractor shall file with the department, in the
form prescribed by the department, a statement providing the following
(1) The independent contractor's name, trade name, address, and
(2) The independent contractor's federal identification number or
Social Security number.
(3) The name and:
(A) Social Security number;
(B) federal employer identification number (FEIN); or
(C) taxpayer identification number (TIN);
of each person or entity with whom the independent contractor
(e) Along with the statement required in subsection (d), an
independent contractor shall file annually with the department
documentation in support of independent contractor status before being
granted a certificate of exemption. The independent contractor must
obtain clearance from the department of state revenue before issuance
of the certificate.
(f) An independent contractor shall pay a filing fee of five dollars
($5) with the statement required in subsection (d). The fees collected
under this subsection shall be deposited into a special account in the
state general fund known as the independent contractor information
account. Money in the independent contractor information account is
annually appropriated to the department for its use in carrying out the
purposes of this section.
(g) The department shall keep each statement and supporting
documentation received under this section on file and on request may
verify that a certificate of exemption is on file.
(h) The certificate of exemption required by this section must be on
a form prescribed and provided by the department. A certificate issued
under this section is valid for one (1) year. The department shall
maintain the original certificate on file.
(i) A certificate of exemption must certify the following
(1) That the independent contractor has worker's compensation
coverage for the independent contractor's employees in
accordance with IC 22-3-2 through IC 22-3-7.
(2) That the independent contractor desires to be exempt from
being able to recover under the worker's compensation policy or
self-insurance of a person for whom the independent contractor
will perform work only as an independent contractor.
(j) The department shall provide the certificate of exemption to the
person requesting it not less than seven (7) business days after
verifying the accuracy of the supporting documentation. To be given
effect, a certificate of exemption must be filed with the worker's
compensation board of Indiana in accordance with
IC 22-3-2-14.5(g) and IC 22-3-7-34.5(g). IC 22-3-7-34.5(h).
(k) Not more than thirty (30) days after the department receives an
independent contractor's statement and supporting documentation and
issues a certificate of exemption, the department shall provide the
independent contractor with an explanation of the department's tax
treatment of independent contractors and the duty of the independent
contractor to remit any taxes owed.
(l) The information received from an independent contractor's
statement and supporting documentation is to be treated as confidential
by the department and is to be used solely for the purposes of this
(m) A contractor who knowingly or intentionally causes or assists
employees, including temporary employees, to file a false statement
and supporting documentation of independent contractor status
commits a Class D felony.
(n) An employee who knowingly or intentionally files a false
statement or false supporting documentation of independent
contractor status commits a Class D felony.
SOURCE: IC 22-3-4-13; (07)IN0404.1.2. -->
SECTION 2. IC 22-3-4-13 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 13. (a) Every employer
shall keep a record of all injuries, fatal or otherwise, received by or
claimed to have been received by
his the employer's employees in the
course of their employment. Within seven (7) days after the occurrence
and knowledge thereof, as provided in IC 22-3-3-1, of any injury to an
employee causing his the employee's death or his absence from work
for more than one (1) day, a report thereof shall be made in writing and
mailed to the employer's insurance carrier or, if the employer is self
insured, delivered to the worker's compensation board in the manner
provided in subsections (b) and (c). The insurance carrier shall deliver
the report to the worker's compensation board in the manner provided
in subsections (b) and (c) not later than seven (7) days after receipt of
the report or fourteen (14) days after the employer's knowledge of the
injury, whichever is later. An employer or insurance carrier that fails
to comply with this subsection is subject to a civil penalty of fifty
dollars ($50), to be assessed and collected by the board. Civil penalties
collected under this section shall be deposited in the state general fund.
(b) All insurance carriers, companies who carry risk without
insurance, and third party administrators reporting accident information
to the board in compliance with subsection (a) shall:
(1) report the information using electronic data interchange
standards prescribed by the board no later than June 30, 1999; or
(2) in the alternative, the reporting entity shall have an
implementation plan approved by the board no later than June 30,
2000, that provides for the ability to report the information using
electronic data interchange standards prescribed by the board no
later than December 31, 2000.
Prior to the June 30, 2000, and December 31, 2000, deadlines, the
reporting entity may continue to report accidents to the board by mail
in compliance with subsection (a).
(c) The report shall contain the name, nature, and location of the
business of the employer, the name, age, sex, wages, and occupation
of the injured employee, the date and hour of the accident causing the
alleged injury, the nature and cause of the injury, and such other
information as may be required by the board.
(d) A person who violates any provision of this article, except
or IC 22-3-7-34(a) IC 22-3-6-4, IC 22-3-7-34(b), or
IC 22-3-7-34(b), IC 22-3-7-34(c), commits a Class C infraction. A
person who violates IC 22-3-5-1, or IC 22-3-7-34(a) or IC 22-3-6-4,
IC 22-3-7-34(b), or IC 22-3-7-34(c) commits a Class A infraction. The
worker's compensation board in the name of the state may seek relief
from any court of competent jurisdiction to enjoin any violation of this
(e) The venue of all criminal actions under this section lies in the
county in which the employee was injured. The prosecuting attorney of
the county shall prosecute all such violations upon written request of
the worker's compensation board. Such violations shall be prosecuted
in the name of the state.
(f) In an action before the board against an employer who at the time
of the injury to or occupational disease of an employee had failed to
comply with IC 22-3-5-1,
or IC 22-3-7-34(a) or IC 22-3-7-34(b), or
IC 22-3-7-34(c), the board may award to the employee or the
dependents of a deceased employee:
(1) compensation not to exceed double the compensation
provided by this article;
(2) medical expenses; and
(3) reasonable attorney fees in addition to the compensation and
(g) In an action under subsection
(c) (d) the court may:
(1) order the employer to cease doing business in Indiana until the
employer furnishes proof of insurance as required by IC 22-3-5-1
IC 22-3-7-34(a) or IC 22-3-7-34(b) or IC 22-3-7-34(c);
(2) require satisfactory proof of the employer's financial ability to
pay any compensation or medical expenses in the amount and
manner and when due as provided for in IC 22-3, for any injuries
which occurred during any period of noncompliance; and
(3) require the employer to deposit with the worker's
compensation board an acceptable security, indemnity, or bond to
secure the payment of such compensation and medical expense
(h) The penalty provisions of subsection
(e) (f) shall apply only to
the employer and shall not apply for a failure to exact a certificate of
insurance under IC 22-3-2-14 or IC 22-3-7-34(i) or IC 22-3-7-34(j).
SOURCE: IC 22-3-6-4; (07)IN0404.1.3. -->
SECTION 3. IC 22-3-6-4 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2007]: Sec. 4. An employer or employee shall not classify an
employee as an independent contractor for the sole or primary
purpose of avoiding the:
(1) rights and remedies due to the employee under IC 22-3-2-6
or IC 22-3-7-6; or
(2) liability due under IC 22-3-5-1(a) or IC 22-3-7-34(c)(1).
SOURCE: IC 22-4-34-2; (07)IN0404.1.4. -->
SECTION 4. IC 22-4-34-2 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 2. An employing unit
or other person who:
makes a false statement or representation knowing it to be
or who including misclassifying an employee as an
knowingly fails to disclose a material fact,
prevent or reduce the payment of benefits to any
thereto, or to to benefits;
avoid becoming or remaining subject to this article; or
avoid or reduce any contribution or other payment
required from an employing unit under:
this article; or
the employment security law of any other state, or of the
federal government or of a foreign government; or
knowingly fails to:
make any such contributions or other payment;
keep or furnish any reports required under this article; or
produce or permit the inspection or copying of records as
required under this article;
commits a Class C misdemeanor. Each day of a failure constitutes a