RELATING TO CORPORATIONS, ASSOCIATIONS, AND PARTNERSHIPS -- WORKERS', COOPERATIVES
Summary
S2318 amends Rhode Island’s workers’ cooperatives law to clarify that a corporation electing cooperative status may state in its articles of incorporation or bylaws that it is organized to furnish contract labor for other entities. The bill is aimed at allowing certain workers’ cooperatives to function more like a hiring hall or labor-furnishing entity, so long as the arrangement reflects an independent contractor relationship between the individual worker and the contracting entity.
The bill also specifies that when an individual uses a workers’ cooperative to obtain work with another entity, but is not a member of the cooperative and is not directly furnishing services to the cooperative, the provisions of § 7-6.2-4(f) do not apply to that individual. In practical terms, the measure creates a clearer legal pathway for cooperatives to supply skilled labor without automatically treating those workers as employees of the cooperative for all purposes.
Impact
This bill would amend chapter 7-6.2 of the Rhode Island General Laws by adding a new section governing corporations organized to furnish skilled labor through a workers’ cooperative structure. It would affect how such cooperatives and the workers they place are classified under state law, particularly by treating those workers as independent contractors in the specified circumstances and by exempting the cooperative from employee-based obligations tied to title 28, including payroll taxes, temporary disability insurance, unemployment insurance, and workers’ compensation coverage for those workers.
Sentiment
The available materials suggest generally favorable or at least clarifying intent around the bill, with no recorded committee testimony or votes indicating opposition. The bill’s caption and explanatory statement frame it as a technical clarification to permit a workers’ cooperative to operate as a hiring hall under certain conditions, suggesting support for expanding flexibility in cooperative labor arrangements. Because there are no transcripts or votes in the provided record, the overall sentiment can only be characterized as neutral-to-supportive based on the bill text itself.
Contention
The main point of potential contention is worker classification. By designating certain labor furnished through a workers’ cooperative as independent contractor work, the bill may raise concerns about whether workers receive the protections and benefits associated with employee status, including unemployment insurance, temporary disability insurance, payroll tax treatment, and workers’ compensation. Supporters are likely to view the measure as a needed clarification for cooperative labor models, while critics may worry it could be used to avoid employer obligations or weaken labor protections.
Clarifies the role of a corporation electing to be governed as a workers' cooperative to allow it to operate as a hiring hall under certain circumstances.
Establishes a seven (7) member public-private partnership infrastructure oversight commission to approve all requests for proposals submitted for public-private partnership construction of qualified facilities.