New Definition of Independent Contractor Status in Arizona


 Employers with Arizona Employees


August 6, 2016


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Arizona H.B. 2114, a recent law providing Arizona employers and independent contractors tools to ascertain an individual’s employment status, became effective last month. Independent contractors now have the option to sign and date a Declaration of Independent Business Status (“DIBS”) to confirm their employment status.

The DIBS must contain certain acknowledgments regarding the contractor’s independent business, their lack of entitlement to unemployment benefits or other rights related to an employment relationship, and their responsibility to pay owed taxes and maintain necessary registration or licensing.  The DIBS must also state that the contractor meets at least 6 of 10 specific criteria typically used to assess a worker’s employment status.

Note that submitting a DIBS is optional, and it neither guarantees nor denies the possibility that the individual is an independent contractor rather than an employee.  The use of a DIBS creates a rebuttable presumption that the worker is an independent contractor, should the individual’s status be challenged later. However, lack of a DIBS does not raise the presumption that an independent contractor relationship does not exist.

Action Items

  1. Consider implementing use of a DIBS with current and future contractual relationships.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser.

© 2016 ManagEase, Incorporated.

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