A bill for an act prohibiting the misclassification of employees as independent contractors, providing penalties, and including applicability provisions.

HF 2385 prohibits employers in Iowa from willfully misclassifying workers as independent contractors instead of employees, which would deny them benefits like unemployment insurance. It uses current federal IRS guidelines to determine worker classification and applies to misclassifications occurring after the bill's effective date. Employers violating this law face civil penalties of up to $10,000 per misclassified worker for repeat offenses, plus a Class D felony charge (up to 5 years in prison and fines up to $10,245). The Iowa Department of Workforce Development enforces the law, collects penalties for the general fund, and refers violations to county attorneys.