HB408 Alabama 2021 Session

Updated Feb 26, 2026

Notable

Summary

Primary Sponsor: Wes KitchensSenator
Republican
Session: Regular Session 2021
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: HB408 requires employers and state agencies to use IRS guidelines to determine whether a worker is an employee for benefits and tax purposes, with a workers' compensation exemption.
What This Bill Does
If enacted, employers must use the IRS test from Rev. Rul. 87-41 and apply the Section 530 safe harbor when deciding if a worker is an employee for unemployment benefits and tax purposes. State agencies would use the same guidelines when determining employment status for these purposes. The rule does not change workers' compensation determinations, and it becomes effective on the first day of the third month after passage and governor approval.

Who It Affects
Private employers - must apply the IRS test and Section 530 safe harbor to determine if workers are employees for benefits and tax purposes.
State agencies - must use the same guidelines to determine employment status for benefits and tax purposes; workers' compensation determinations are unaffected.

Key Provisions
Provision 1: Employers must use the IRS test in Rev. Rul. 87-41 (as amended) and apply the Section 530 safe harbor when determining whether a worker is an employee for employee benefits and tax liability purposes.
Provision 2: State agencies must use the same IRS guidelines for employment status determinations for benefits and tax purposes; the act excludes workers' compensation determinations and becomes effective the first day of the third month after passage and governor approval.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.
Subjects: Employment