A.R.S. tit. 23 ch. 10 — Arizona Revised Statutes Title 23 Chapter 10 — Employment Relationships

23-1601. Declaration of independent business status A. Compliance with this chapter and the execution of a declaration of independent business status in compliance with this section are not mandatory in order to establish the existence of an independent contractor relationship between an employing unit and an independent contractor. The failure of a party to execute a declaration in compliance with this section does not create any presumptions and is not admissible to deny the existence of an independent contractor relationship. B. Any employing unit contracting with an independent contractor may prove the existence of an independent contractor relationship for the purposes of this title by the independent contractor executing a declaration of independent business status, as provided by this section, and by the employing unit acting in a manner substantially consistent with the declaration. Compliance with this section creates a rebuttable presumption of an independent contractor relationship between the independent contractor and the employing unit with whom the independent contractor contracts. Any declaration of independent business status shall be signed by the independent contractor, be dated and substantially comply with the following form: This declaration of independent business status is made by (contractor) in relation to services performed by the contractor for or in connection with (contracting party). The contractor states and declares the following: 1. The contractor acknowledges that the contractor operates the contractor's own independent business and is providing services for or in connection with the contracting party as an independent contractor. 2. The contractor acknowledges that the contractor is not an employee of the contracting party and the services rendered for or in connection with the contracting party do not establish any right to unemployment benefits or any other right arising from an employment relationship. 3. The contractor is responsible for all tax liability associated with payments received from or through the contracting party and the contracting party will not withhold any taxes from payments to the contractor. 4. The contractor is responsible for obtaining and maintaining any required registration, licenses or other authorization necessary for the services rendered by the contractor. 5. The contractor acknowledges at least six of the following: (a) That the contractor is not insured under the contracting party's health insurance coverage or workers' compensation insurance coverage. (b) That the contracting party does not restrict the contractor's ability to perform services for or through other parties and the contractor is authorized to accept work from and perform work for other businesses and individuals besides the contracting party. (c) That the contractor has the right to accept or decline requests for services by or through the contracting party. (d) That the contracting party expects that the contractor provides services for other parties. (e) That the contractor is not economically dependent on the services performed for or in connection with the contracting party. (f) That the contracting party does not dictate the performance, methods or process the contractor uses to perform services. (g) That the contracting party has the right to impose quality standards or a deadline for completion of services performed, or both, but the contractor is authorized to determine the days worked and the time periods of work. (h) That the contractor will be paid by or through the contracting party based on the work the contractor is contracted to perform and that the contracting party is not providing the contractor with a regular salary or any minimum, regular payment. (i) That the contractor is responsible for providing and maintaining all tools and equipment required to perform the services performed. (j) That the contractor is responsible for all expenses incurred by the contractor in performing the services. 6. The contractor acknowledges that the terms set forth in this declaration apply to the contractor, the contractor's employees and the contractor's independent contractors. C. Subsections A and B of this section do not apply to any employing unit that is licensed or is required to be licensed pursuant to title 32, chapter 10 unless the employing unit is contracting with an independent contractor to perform services that do not require a license pursuant to title 32, chapter 10 for or in connection with the employing unit. D. Execution of a declaration of independent business status under this section is optional and this section does not require an independent contractor to execute a declaration of independent business status to be considered an independent contractor. Any employing unit or independent contractor may rely on any provision in this title for the purposes of establishing an employment or independent contractor relationship. E. The execution of a declaration of independent business status and substantial compliance with the declaration pursuant to this section does not operate to the same effect as or otherwise act as a substitute for a written agreement executed pursuant to section 23-902, subsection D. 23-1602. Determination of employment relationship; prohibition Except for the enforcement of chapter 2, article 10 of this title, any supervision or control exercised by an employing unit to comply with any statute, rule or code adopted by the federal government, this state or a political subdivision of this state or any requirement of licensing, professional or ethical standards may not be considered for the purposes of determining the independent contractor or employment status of any relationship or individual for the purposes of this title. This section does not otherwise affect any investigatory or enforcement authority related to the determination of the independent contractor or employment status of any relationship as provided by this title or federal law. 23-1603. Qualified marketplace contractors; definitions A. A qualified marketplace contractor shall be treated as an independent contractor for all purposes under state and local laws, regulations and ordinances, including employment security laws prescribed in chapter 4 of this title and workers' compensation laws prescribed in chapter 6 of this title, if all of the following apply: 1. All or substantially all of the payment for the services performed by the qualified marketplace contractor is related to the performance of services or other output. 2. The services performed by the qualified marketplace contractor are governed by a written contract executed between the qualified marketplace contractor and a qualified marketplace platform. 3. The written contract required by paragraph 2 of this subsection provides for all of the following: (a) That the qualified marketplace contractor is providing services as an independent contractor and not as an employee. (b) That, pursuant to paragraph 1 of this subsection, all or substantially all of the payment paid to the qualified marketplace contractor shall be based on the performance of services or other output. (c) That the qualified marketplace contractor is allowed to work any hours or schedules the qualified marketplace contractor chooses. If the qualified marketplace contractor elects to work specified hours or schedules, a contract may require the qualified marketplace contractor to perform work during the selected hours or schedules. (d) That the qualified marketplace contract does not restrict the qualified marketplace contractor's ability to perform services for other parties. (e) That the qualified marketplace contractor bears all or substantially all of the qualified marketplace contractor's own expenses that are incurred by the qualified marketplace contractor in performing the services. (f) That the qualified marketplace contractor is responsible for the taxes on the qualified marketplace contractor's own income. (g) That the contract and the association created by the contract may be terminated without cause at any time and on reasonable notice in which the contract expressly provides for termination by either party to the contract or unilaterally by a qualified marketplace contractor at any time on reasonable notice given to the other party. B. For services performed by a qualified marketplace contractor before August 6, 2016, the qualified marketplace contractor shall be treated as an independent contractor for all purposes under state and local laws, regulations and ordinances, including employment security laws prescribed in chapter 4 of this title and workers' compensation laws prescribed in chapter 6 of this title, if both of the following apply: 1. All or substantially all of the payment for the services performed by the qualified marketplace contractor is related to the performance of services or other output. 2. The services performed by the qualified marketplace contractor are governed by a written contract executed between the qualified marketplace contractor and a qualified marketplace platform that conforms to the requirements of subsection A, paragraph 3 of this section. C. Compliance with this section is not mandatory in order to establish the existence of an independent contractor relationship. The exclusion of any contractor or digital platform from this section does not create any presumptions and is not admissible to deny the existence of an independent contractor relationship. D. This section does not apply to: 1. Service performed in the employ of a state, or any political subdivision of a state, or in the employ of an Indian tribe, or any instrumentality of a state, any political subdivision of a state or any Indian tribe that is wholly owned by one or more states or political subdivisions or Indian tribes, provided that such service is excluded from employment as defined in the federal unemployment tax act (26 United States Code sections 3301 through 3311) solely by reason of 26 United States Code section 3306(c)(7). 2. Service performed in the employ of a religious, charitable, educational or other organization that is excluded from employment as defined in the federal unemployment tax act (26 United States Code sections 3301 through 3311), solely by reason of 26 United States Code section 3306(c)(8). E. For the purposes of this section: 1. "Qualified marketplace contractor" means any person or organization, including an individual, corporation, limited liability company, partnership, sole proprietorship or other entity, that enters into an agreement with a qualified marketplace platform to use the qualified marketplace platform's digital platform to provide services to third-party individuals or entities seeking those services. Qualified marketplace contractor does not include any contractor when the services performed consist of transporting freight, sealed and closed envelopes, boxes or parcels or other sealed and closed containers for compensation. 2. "Qualified marketplace platform": (a) Means an organization, including a corporation, limited liability company, partnership or sole proprietorship or any other entity, that both: (i) Operates a digital website or digital smartphone application that facilitates the provision of services by qualified marketplace contractors to individuals or entities seeking such services. (ii) Accepts service requests from the public only through its digital website or digital smartphone application, and does not accept service requests by telephone, by facsimile or in person at physical retail locations. (b) Does not include any digital website or smartphone application where the services facilitated consist of transporting freight, sealed and closed envelopes, boxes or parcels or other sealed and closed containers for compensation. 23-1604. Franchisor and franchisee; owner of a mark and licensee; employment relationship; definitions A. For the purposes of this title: 1. A franchisor is not an employer or co-employer of either a franchisee or an employee of the franchisee, unless the franchisor agrees, in writing, to assume the role of employer or co-employer of the franchisee or the employee of the franchisee. 2. The owner of a mark is not an employer or co-employer of either the licensee or an employee of the licensee, unless the owner of the mark agrees, in writing, to assume the role of employer or co-employer of the licensee or the employee of the licensee. B. For the purposes of this section: 1. "Franchisee" has the same meaning prescribed in 16 Code of Federal Regulations section 436.1. 2. "Franchisor" has the same meaning prescribed in 16 Code of Federal Regulations section 436.1. 3. "Licensee" means a third party to whom the owner of a mark licenses the owner's mark for the purpose of independently conducting business using the licensed mark. 4. "Mark" has the same meaning prescribed in section 44-1441. 23-1605. Motor carriers; employment status; safety improvement; definitions A. The deployment, implementation or use of safety improvement by or as required by a motor carrier or its related entity, including by contract, may not be considered when evaluating a person's status as an employee, independent contractor or jointly employed employee under any state law. B. For the purposes of this section: 1. "Motor carrier" has the same meaning prescribed in section 28-5201. 2. "Safety improvement" means any device, equipment, software, technology, procedure, training, policy, program or operational practice intended and primarily used to improve or facilitate any of the following: (a) Compliance with traffic safety or motor carrier safety laws. (b) Safety of a motor vehicle. (c) Safety of the operation of a motor vehicle. (d) Safety of third-party users of a public highway as defined in section 28-5201.