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Anti-independent contractor laws. Massachusetts scandal

Tuesday, November 05, 2013

 ICA’s Ken Phillips met with the Massachusetts House Small Business Caucus in October 2013 in Boston.  The members are concerned that Massachusetts' anti-independent contractor laws  suppress jobs growth in Massachusetts.

Mike Hruby heads a Massachusetts small business advocacy group ‘New Jobs for Massachusetts'. Its recent report ‘Reopening the Main Road to Self-employment in Massachusetts' says the laws cost Massachusetts some 43,000 jobs annually. Further, while over the last 20-plus years USA jobs have grown by 20 per cent, Massachusetts has had no jobs growth.

What’s more, the anti-independent contractor laws appear to be the result of a procedural scandal. Here’s what happened:
  • In 2004 there was an effort to change Massachusetts' construction laws. Allegations were that companies were forcing workers to be 'non-employees' under federal tax laws thus enabling construction firms to avoid particular taxes.
  • The Legislature established a commission of investigation consulting widely across the industry and government departments.
  • A Bill was put to the Legislature and passed both the Massachusetts House and Senate.
  • However, the allegation is that somewhere between the Legislature and the printing of the Bill for the Governor’s signing into law, the wording on the Bill was changed. It’s a scandal!
The outcome was that the law applies not just to the construction sector but to all independent contractors, effectively banning self-employed, independent contractor entrepreneurs from working in Massachusetts. It’s no theoretical situation. Freelance writers, for example, have had to flee Massachusetts to be able to continue their work. It’s incredible to see such a law in the ‘land of the free!’

More ICA commentary here.
Comments
Sally commented on 05-Nov-2013 08:16 PM
The US is stuffed. Crony capitalism rules. See http://mises.org/daily/6576/How-the-World-Was-Made-Safe-for-Crony-Capitalism
Here's hoping that our new government in Australia stands up to powerful big business, Union and NGO interest groups that push for rules that selectively advantage them to the detriment of small business. The signs are looking OK so far, but there is lot to unwind, and a lot of interest groups and elites that will get angry when their power and dominance is removed and they are brought back down to earth to live in equality with us commoners and battlers in “main street”.

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