FOR IMMEDIATE RELEASE

January 11, 2013
Contact: Mike Hruby
Phone: 978-263-3429

Law Hinders Self-Employment in 400 Occupations that Employ 1.4 Million in Massachusetts.

Boston, MA… The commonwealth’s independent contractor law, which was overhauled in 2004, suppresses the creation of self-employment jobs in 400 service occupations and blocks self-employment possibilities for nearly 1.4 million people in Massachusetts, or 42 percent of the current employed workforce of just over 3.3 million, according to an analysis released today by New Jobs for Massachusetts (New Jobs).

In “Re-Opening the Main Road to Self-Employment in Massachusetts,” New Jobs uses the latest data from the U.S. Bureau of Labor Statistics to analyze 739 occupational classifications.  The study finds 400 service occupations that lend themselves to contract work. They include nursing, maintenance and repair, accounting, law, engineering, marketing, sales, training and coaching, among others.

“Essentially half of all households in Massachusetts are directly affected by this state’s independent contractor law,” said New Jobs’ President Mike Hruby.  “Self-employment in the services should be the state’s largest engine of job growth, but the law keeps people in the services from even considering self-employment in their field.”

Massachusetts’ independent contractor law was amended in 2004, when it was made far more restrictive than the federal law and similar laws in other states.  For example, companies can not legally hire individuals as contractors unless their work is outside the company’s usual course of business.

“Federal law and other states’ laws permit individuals to work under contract doing project work, filling peak demand and emergency needs, providing specialized short-term assistance, offering custom services, working off-site, and carrying out assignments for multiple clients over time,” Hruby said.“  Few people realize Massachusetts law prevents that kind of job growth.”

The combination of vague wording that opens the law to broad legal interpretation and harsh penalties for violating it further add to the independent contractor law’s chilling effect on self-employment.  If either the commonwealth’s Attorney General or a state court find that a contractual relationship fails even one of the three tests laid out in the law, the contract customer becomes liable for damages of three times all possible compensation and benefits which might have been paid if the contractor were an employee.  These penalties cannot be challenged in court.

Employment attorney Robert M. Shea of the firm Morse, Barnes-Brown and Pendleton in Waltham calls Massachusetts’ independent contractor law “the harshest such law in the country.”

Peter Forman, President and CEO of the South Shore Chamber of Commerce, said, “The New Jobs for Massachusetts report will open some eyes.“  The anti-independent contractor law affects almost every business sector in the state, not just construction.”

The study identifies three relatively minor wording changes that would eliminate the law’s job-killing impact without reducing workers’ protection against abuse or coercion. Two of these are in bills S.886 and H.3313, which are currently before the Massachusetts Legislature.

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About New Jobs for Massachusetts: New Jobs for Massachusetts is a non-profit public policy advocate for rapid growth in private sector employment in Massachusetts. Its mission is to accelerate the growth of new jobs across the state.New Jobs works with legislators, agencies, the media, voters, interest groups and think tanks to devise solutions custom-tailored to Massachusetts’ unique resources for job growth. It is supported entirely by voluntary contribu­tions and accepts no government funds.

Mike Hruby has been a consultant to large and mid-sized technology companies for more than 20 years. During the course of over 500 projects, his firm helped companies nationwide develop new products and enter new markets. Since 2004 he built a data center cooling business for a client based on its patent, and found licensees for corporate technologies. He wrote an award-winning book on corporate growth strategy titled Technoleverage. He has an undergraduate degree in history, and a master's degree in resource economics from the University of New Hampshire. He lives in Boxborough with his wife, Leslie.

Link to report PDF:

http://www.newmassjobs.com/News_files/MICL_FINAL_REPORT-25.pdf

www.NewMassJobs.com