RELATING TO COUNTY ORDINANCES.

2024 Regular Session Introduced by Stanley Chang and 6 co-sponsors

SB 598 updates Arkansas's employment status criteria using a twenty-factor test, impacting employers and workers by clarifying rights and benefits under the law.

Carried over to 2024 Regular Session.

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Purpose and Intent

Senate Bill 598 (SB 598) aims to amend various laws related to the Division of Workforce Services in Arkansas. The primary focus of the bill is to update the criteria for determining the employment status of individuals, particularly in relation to the definitions of "employee" under the state's Workers' Compensation Law and wage discrimination laws. The bill seeks to streamline operations within the Division of Workforce Services and reflect recent administrative changes regarding the Temporary Assistance for Needy Families (TANF) program.

Key Provisions

SB 598 introduces several significant amendments, including:

Employment Status Determination:

The bill mandates the use of a twenty-factor test established by the Internal Revenue Service (IRS) to determine whether an individual is classified as an employee or an independent contractor. This test evaluates various aspects of the working relationship, such as:
- The degree of control the employer has over the worker.
- The nature of the training provided to the worker.
- The integration of the worker's services into the employer's business operations.

Definition of "Employee":

The bill modifies the definition of "employee" across multiple Arkansas codes, ensuring consistency in how employment status is assessed. This includes:
- Updating definitions under the Workers' Compensation Law and wage discrimination laws to incorporate the twenty-factor test.

Administrative Changes:

Reflects the removal of the Department of Commerce from the administration of the TANF program, indicating a shift in oversight responsibilities.

Distribution of Proceeds:

Alters the distribution of proceeds from administrative assessments related to workforce services.

Affected Parties

Employers and Agencies: The bill will impact employers and agencies responsible for determining employment status, as they will need to adopt the new criteria outlined in the bill.

Workers: Individuals seeking employment or currently employed may experience changes in their classification, which could affect their rights and benefits under the law.

Division of Workforce Services: The operational framework of this division will be streamlined, potentially improving efficiency in service delivery.

Procedural Timeline

Introduced: April 1, 2025

Status: Carried over to the 2024 Regular Session after initial readings and committee reviews.

Legislative Actions: The bill has undergone multiple readings, committee recommendations, and has been passed in both the Senate and House, indicating strong legislative support.

Conclusion

SB 598 represents a significant update to Arkansas's workforce laws, particularly in how employment status is determined. By implementing a standardized twenty-factor test and refining definitions related to employment, the bill aims to enhance clarity and consistency in workforce regulations. The changes are expected to affect various stakeholders, including employers, workers, and administrative bodies within the state.

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