Policy & Politics: September Recap

Governor Hobbs has issued an executive order regarding the misclassification of workers as 1099 independent contractors when they should be employees. She has directed the Department of Economic Security (DES), the Department of Revenue (DOR), the Industrial Commission of Arizona (ICA), and the Registrar of Contractors to collaborate on a report to address this problem. Here are the specifics of what she has asked

1. Information sharing. Four agencies are to share non-confidential information on worker misclassification and use it to enforce state law together: the DES, the DOR, the ICA, and the Registrar of Contractors. This includes final decisions finding that a business misclassified workers.

2. State contractors. The Department of Administration is to review contract clauses and consider measures such as payroll certification, so that companies with state contracts follow labor laws.

3. Workforce retention. The Department of Administration is also to study ways to

encourage state contractors to keep existing workers when taking on new state contracts.

4. Recommendations. The agencies are to report recommendations to the governor by

October 1, 2026, including how to track misclassification data and improve education and compliance.

5. Advisory council. The Registrar of Contractors is to form an Industry Advisory Council on Paycheck Protection, made up of businesses, workers, and others, which meets at least three times before the report.

The report on next steps in due the day I am writing this update. I will get a copy and share it with the board as soon as it is available.