Passage of a new bill removes a tremendous advantage North Carolina newspapers have enjoyed in Worker’s Compensation litigation for nearly two decades. The bill removes a legislative presumption of independent contractor status for newspaper carriers under the state’s Workers’ Compensation law.
The presumption was first attacked in 2015, when legislation was introduced into both Houses of the Legislature to not only repeal it, but to add independent contractor “unfriendly” language to the statutory test for independent contractor status. The North Carolina Press Association mobilized to oppose this legislation and a full-court press occurred. On September 29, 2015, the Publishers were successful – the bill died at the end of the legislative session.
In 2017, Senate Bill 436 was introduced into the North Carolina Senate to repeal the presumption, but never made it out of the Senate Committee. Shortly thereafter, State Senator Trudy Wade attached the repeal to House Bill 205, which originally only addressed the wages of prison inmates. Added to that bill was the repeal of the legislative presumption, plus a provision containing eight factors that would determine whether an individual is an employee, if all were met.
At the very end of the legislative session on June 28, 2017 – literally at the midnight hour – a modified version of H.B. 205 passed both Houses. The independent contractor presumption that the newspaper industry has enjoyed for the last 20 years was removed. The revised bill did not include the eight points concerning employee/independent contractor status.
There is a reasonable probability that the Governor will veto the bill. However, if the bill is signed into law, what does this mean for North Carolina Newspaper Publishing Companies? It means that, for the first time in 20 years, Publishing Companies will likely face litigation on whether newspaper carriers are independent contractors or employees.
While the presumption was in effect, there was little – if any – challenge to independent contractor status under the state’s Workers’ Compensation law. Previously, the legislative presumption had been enough to discourage plaintiffs from bringing cases. The issue is now up for grabs, as there is no longer a burden of proof on the plaintiff to overcome the presumption of independent contractor status.
If your North Carolina Publishing Company does not already have an incentive to get its independent contractor house in order, losing the legislative presumption should provide extra motivation. The good news is that, if challenged, most Publishing Companies will be able to prevail on the issue. The bad news is they will have to go through the expensive process of litigation.
We will keep you updated on any new developments.