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Connecticut General Assembly Passes Law Exempting Certain Truck Drivers from Unemployment Insurance Coverage




by:
Brian Del Gatto
Seamus M. Keating
David A. Rose
Wilson Elser Moskowitz Edelman & Dicker LLP - Stamford Office

 
July 16, 2013

Previously published on July 11, 2013

On June 1, 2013, the Conncticut General Assembly passed legislation that exempts certain commercial truck drivers from Connecticut’s unemployment law. It amends Connecticut General Statutes § 31-222(a)(5), relating to exemptions for certain types of services and employments from the unemployment law. On June 24, 2013, Governor Dannel Malloy signed the bill into law as Public Act No. 13-168.

The newly implemented exemption covers drivers who transport property under contract with another party if they meet the following conditions:

  • The driver’s vehicle weighs more than 10,000 pounds
  • The driver owns the vehicle or holds it under a “commercially reasonable” bona fide lease subject to certain conditions
  • The driver’s pay is based on factors including mileage-based rates, a percentage of any rate schedules, time spent driving or a flat fee
  • The driver can refuse to work without consequence and can accept work from multiple contractors without consequence
  • The driver is not considered an employee under the unemployment law’s “ABC test”

With regard to the last factor and the unemployment law’s ABC test, the law lays out an important directive. In considering whether a driver is an employee or an independent contractor, the labor commissioner is prohibited from making a determination solely because the driver works only for one company rather than multiple companies. To be an independent contractor under the ABC test, the worker must (A) be free from the employer’s control and direction; (B) perform a service outside of the employer’s usual course of business or outside of all the employer’s places or businesses; and (C) be customarily engaged in an independently established trade, occupation, profession or business of the same nature as the service being performed for the employer. Prior to this law, contracting with only one business would mean that the individual would fail part C and be considered an employee. With the passage of this bill, Connecticut law is brought into line with many surrounding states and territories in how it treats commercial truck drivers.

This bill will result in substantial savings for many trucking companies and truck drivers in Connecticut, as they will no longer have to pay unemployment taxes in Connecticut. The final language passed reflects the key priorities of the Motor Transport Association of Connecticut (MTAC) and the general interest of all commercial trucking in the state.



 

The views expressed in this document are solely the views of the author and not Martindale-Hubbell. This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance.
 

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