First bill of session achieves final passage

LRC Public Information --

The measure, known as House Bill 186, would eliminate some potentially expensive requirements for Kentuckians that operate direct sales businesses like those that offer home décor, health and beauty products, and clothing, said Sen. Danny Carroll, R-Paducah, who stood to explain SB 186.

These types of companies have never been required to carry workers’ compensation insurance on those who contract with them to sell products. However, Carroll said there is a great deal of concern that the way workers’ compensation laws are currently being interpreted by courts, these direct sellers may be considered employees rather than independent contractors.

He added that 39 other states have passed similar laws to clarify the status of direct sellers.

Democratic Floor Leader Morgan McGarvey, D-Louisville, stood to explain his “no” vote.

“I believe the bill is a false promise to small business owners,” he said. “Our court system defines what constitutes an employee versus what constitutes an independent contractor.

“It doesn’t matter what we put in statute. That is not going to change. It is a judicial determination. I don’t think we should give businesses this false hope they are hiring anyone as an independent contractor.”

Sen. Stephen West, R-Paris, stood to explain he was voting “yes” despite having some of the same concerns as McGarvey.

“There is a bigger problem that we have here in the state," West said. "The judiciary ignores statute... That is something we need to look at.”

Sen. John Schickel, R-Union, stood to explain his “yes” vote. He said similar measures have passed out of the Senate several times in recent years but have never become law.

“Small businesses have really wanted this bill for many, many years,” he said.

The bill passed the Senate on a 25-7 vote.