On November 1, 2007 an important change in employment/taxation law will go into effect in Oklahoma. In an effort to penalize illegal aliens in Oklahoma and the individuals and businesses who utilize alien personal services, the Oklahoma Legislature passed HB1804. The pertinent text of the new law is set out below.
The summary of a pertinent portion of HB1804 is:
1. Any community association contracting with someone for personal services (landscaping/mowing, construction/repair work, etc) on an independent contractor basis (i.e., not as an employee of the association) must now verify employment authorization of the independent contractor.
2. The hiring entity (the association) must verify employment authorization just as if the association were hiring the contractor as an employee (completion of Form I-9 with supporting documentation).
3. The association must retain records of the employment authorization.
4. If the independent contractor fails to provide proof of employment authorization, the association must now withhold income taxes from the independent contractor just as if the independent contractor were an employee of the association.
5. IF the association fails to verify employment authorization AND withhold income taxes from an independent contractor who is not authorized for employment, the association may become liable for the income taxes that should have been withheld from the independent contractor.
Not only does this new law require employment documentation from even independent contractors used by the association, HB1804 will severely penalize the association for failing to meet the dictates of the law. I just hope HB1804 won't be applied to my local pizza delivery person, because I'm sure my family orders more than $600 per year in pizza from the local restaurant.
posted by Matthew L. Winton, Oklahoma community association attorney
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