24.11.2407 DETERMINATION OF INDEPENDENT CONTRACTORS--DEPARTMENT PROCEDURES
(1) As provided in 39-51-204, MCA, an individual found to be an independent contractor pursuant to 39-71-417, MCA, is considered to be an independent contractor for the purposes of unemployment insurance. If an individual is not required to obtain an independent contractor exemption certificate because the individual regularly and customarily performs services at his or her own fixed business location, or if an individual is exempt from 39-71-417, MCA, by other sections of the workers' compensation act, the department shall apply the guidance set out in ARM Title 24, chapter 35, subchapters 2 and 3 and use the following two-part test to determine whether an individual is an independent contractor or an employee:
(a) whether an individual is and shall continue to be free from control or direction over the performance of the services, both under contract and in fact; and
(b) whether an individual is engaged in an independently established trade, occupation, profession, or business.
(2) When evaluating the status of an individual who possesses an independent contractor exemption certificate, the department shall apply the two-part test in (1)(a) and (b). The department may recommend the suspension of an individual's independent contractor exemption certificate for a specific business relationship when the department determines that an employing unit exerts or retains a right of control to the degree that the certificate holder fails to qualify for independent contractor designation. The department may recommend certificate revocation when the department determines the certificate holder has violated the provisions of 39-71-418, MCA.
(3) To determine whether a hiring agent exerts control over an individual, the department shall evaluate:
(a) direct evidence of right or exercise of control;
(b) method of payment;
(c) furnishing of equipment; and
(d) right to fire.
(4) For purposes of this rule, "individual" means a worker who renders service in the course of a trade, occupation, profession, or business, and "employing unit" means the individual or other legal entity as described in the definition of "employing unit" in 39-51-201, MCA, that hired one or more individuals.
(5) To determine whether an independent contractor or employment relationship exists, the department may:
(a) review written contracts between the individual and the employing unit;
(b) interview the individual, co-workers, or the employing unit;
(c) obtain statements from third parties;
(d) examine the books and records of the employing unit;
(e) review filing status on income tax returns; and
(f) make any other investigation necessary to determine employment status.
(6) After investigation, the department may issue an initial written determination on whether an individual is an independent contractor. Any person or employing unit aggrieved by this initial determination may request investigation and a decision by the department's Independent Contractor Central Unit (ICCU) pursuant to ARM 24.11.203 and ARM Title 24, chapter 35, subchapters 2 and 3, within ten days of notice of the initial determination.
(a) A party is considered to have been given notice on the date a written notice is personally delivered or three days after a written notice is mailed to the party.
(b) The time limits set forth above may be extended for good cause as provided in 39-51-2402, MCA.
(7) Thereafter, the process set out in ARM Title 24, chapter 35, subchapters 2 and 3 controls.
History: 39-51-301, 39-51-302, MCA; IMP, 39-51-201, 39-51-204, 39-51-1109, 39-51-2402, 39-71-418, MCA; NEW, 1988 MAR p. 2723, Eff. 1/1/89; AMD, 1996 MAR p. 1667, Eff. 7/1/96; TRANS, from 24.11.820, 2004 MAR p. 2808, Eff. 11/19/04; AMD, 2010 MAR p. 1608, Eff. 7/16/10; AMD, 2011 MAR p. 573, Eff. 4/15/11.