Bill
SB 2318
Rhode Island permits workers’ cooperatives to furnish contract labor by treating placed workers as independent contractors, reducing employee-owed benefits and payroll obligations.
Rhode Island SB 2318 (2026) — Workers' Cooperatives
Purpose and intent
- The bill clarifies and expands the role of corporations that elect to be governed as workers’ cooperatives, specifically in relation to furnishing contract labor and acting as a hiring hall under certain circumstances.
- It seeks to designate workers furnished by a workers’ cooperative corporation as independent contractors, while also addressing how such workers and the cooperative interact with state labor and employment laws.
Key provisions
- Creation of a new statutory section: 7-6.2-3.1, added to Chapter 7-6.2 (Workers’ Cooperatives).
- Electing governance as a workers’ cooperative:
- A corporation can indicate in its articles of incorporation or bylaws its intent to be governed as a workers’ cooperative for the purpose of furnishing contract labor to other entities.
- The relationship between the workers’ cooperative and the individuals performing labor must demonstrate that those individuals are independent contractors furnishing skilled labor through the cooperative.
- Clarification of application of Section 7-6.2-4(f):
- If an individual uses a workers’ cooperative to secure work with another entity but is not a member of the cooperative or is not furnishing services directly to the cooperative, the terms of 7-6.2-4(f) do not apply to that individual. In other words, certain employment-related provisions may not apply to such individuals in that circumstance.
- Payroll and employment compliance considerations:
- The legislative explanation indicates that workers furnished by a workers’ cooperative would be considered independent contractors for purposes of the arrangement.
- The workers’ cooperative, with respect to those workers, would be exempt from the provisions of Title 28 that treat workers as employees (i.e., payroll taxes, temporary disability insurance, state unemployment insurance, workers’ compensation insurance) when the workers are independent contractors (subject to the cooperative’s structure and compliance with separate requirements for independent contractors).
- Effective date: The act takes effect upon passage.
Who is affected
- Rhode Island corporations that elect to be governed as workers’ cooperatives (for the purpose of supplying contract labor to other entities).
- Individuals who render labor through these worker cooperatives, who would be treated as independent contractors rather than employees for the purposes described.
- State labor and employment regulatory framework, since the cooperative and its workers would interact with Title 28 (employment laws) in the described independent-contractor context.
Procedural and timeline aspects
- Introduced January 23, 2026, and referred to the Senate Labor & Gaming Committee.
- Committee action: The committee recommended passage (April 29, 2026).
- Senate calendar: Placed on the Senate calendar for May 7, 2026 (pending further debate or action).
Notes and considerations
- The bill focuses on clarifying operational and legal distinctions between workers’ cooperatives acting as hiring halls and the independent-contractor status of workers they place with contracting entities.
- It potentially reduces certain employee-related obligations (e.g., payroll taxes, unemployment and workers’ compensation insurance) for workers who are treated as independent contractors under the cooperative structure, while emphasizing independent-contractor relationships and related compliance.
- Implementation will depend on how Rhode Island courts and regulatory agencies interpret the independent-contractor designation within cooperatives and how subsequent rules in Title 28 are applied.
Compiled from official sources — confirm details with the bill’s official record.
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