HB541 Alabama 2019 Session

Summary

Primary Sponsor

Wes KitchensSenator

Republican

Session

Regular Session 2019

Title

Employment, require employers and state agencies to follow specified requirements to determine whether a worker is an employee for purposes of benefits and tax liabilities

Summary

HB 541 would require employers and state agencies to use the IRS 20-factor test to decide if a worker is an employee for benefits and tax purposes.

What This Bill Does

It would require every employer to apply the IRS Rev. Rul. 87-41 20-factor test to determine whether a worker is covered as an employee for unemployment benefits and for payroll tax liability. It would also require state agencies to apply the same guidelines when deciding if a worker is an employee for those purposes. The test includes factors such as who controls how the work is done, whether the worker receives training, how integrated the work is into the business, whether the worker performs tasks personally, and other related considerations like hours, location, payment, and the right to discharge or terminate.

Who It Affects

• Employers: must follow the guidelines to classify workers as employees or independent contractors for unemployment benefits and tax purposes.
• State agencies: must follow the same guidelines when determining whether a worker is an employee for benefits and tax purposes.

Key Provisions

• Employers (and applicable state agencies) must use the IRS Rev. Rul. 87-41 20-factor test to determine employment status for eligibility for Title 25 unemployment benefits and Title 40 tax liability, considering all 20 factors listed by the IRS.
• The act takes effect on the first day of the third month after it passes and is approved by the Governor.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Employment