Arizona’s New Independent Contractor Declaration Law

On August 6, 2016, the Arizona State Legislature enacted the “Declaration of Independent Business Status” law (“DIBS”). The DIBS added Chapter 10 to Title 23 of the Arizona Revised Statutes (Arizona’s “Labor” statute). In short, DIBS allows certain Arizona companies (referred to in the statute as an “employing unit”) to obtain a declaration from those individuals they deem “independent contractors” (rather than employees) so that a rebuttable presumption exists that the relationship is in fact one of independence. Obtaining a declaration under the DIBS is discretionary and the statute states expressly that compliance with the law and the execution of a declaration of independent business status are not mandatory in order to establish the existence of an independent contractor relationship. Further, the failure of a party to execute a declaration in compliance with the DIBS does not create any presumptions and is not admissible to deny the existence of an independent contractor relationship.

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