Tag Archive | Independent Contractor

Worker Misclassification Amnesty: Olive Branch or a Bear Trap?

On September 21, 2011, the Internal Revenue Service (IRS) extended an olive branch to employers when it announced a new program called the Voluntary Worker Classification Program.  The IRS announcement proclaims “This new program will allow employers the opportunity to get into compliance by making a minimal payment covering past payroll tax obligations rather than […]

Do Not Turn Your Contractor Into An Employee!

Managers are expected to tell employees when, where, and how to perform their duties.  However, if they choose to do the same thing to an independent contractor, that individual might be deemed an employee.  And if such a designation is given by the IRS or another administrative agency, your company could be liable for overtime […]

The Employee Notification Initiative Expands… to FLSA Exempt Employees and Independent Contractors

  Pursuant to Executive Order 13496, the Department of Labor requires all Federal contractors and subcontractors to provide written notice to employees of their rights under the National Labor Relations Act (NLRA) to organize and bargain collectively with their employers and to engage in other protected concerted activity.  On December 22, 2010, the National Labor Relations […]

Targeting Misclassification

When the Obama administration took control in 2008, lost revenue was a major focus behind a myriad of legislation seeking to crack down on employee misclassification and discourage employers engaging in employee misclassification. The Government Accountability Office estimated that in 2006 employee misclassification cost the federal government $2.72 billion in tax revenue from Social Security, unemployment, […]

Strong White House Support for Misclassification Legislation

On September 15, 2010, Senator John Kerry (D-Mass.) and Representative Jim McDermott (D-Wash.) introduced The Fair Playing Field Act of 2010 (S. 3786, H. 6128), which seeks to address employer misclassification of employees as independent contractors and close a so-called “loophole” under the current tax regime. Since the Democrats have taken control of Congress and […]

Targeting Employee Misclassification

On April 22, 2010, Representative Lynn Woolsey (D-Cal.) and Senator Sherrod Brown (D-Ohio) introduced identical bills entitled the Employee Misclassification Prevention Act (“EMPA”) (H.R. 5107 and S. 3254), to target abuses of the employee/independent contractor classifications.  Should EMPA become law, it will have an obvious, immediate impact on employers, not only under the wage-hour laws but others, including […]

Misclassification as Independent Contractors Becoming Significantly Riskier

Under the Obama Administration, the Department of Treasury and the Department of Labor are developing a plan to team up to address the misclassification of workers as independent contractors.  President Obama has stated that he can increase the federal coffers by $7 billion through aggressive enforcement of employee misclassifications over the next ten years Some commentators advise that […]

IRS Tips on Employee v. Contractor Determination

On August 21, 2009, the IRS provided the top 10 things every employer should know about hiring people as independent contractors versus hiring them as employees.  The determination of whether an individual that is working for a business is an independent contractor or an employee influences the amount of tax paid by the business pays […]

House Bill Proposes Increasing Penalties for Misclassifying Employees as Independent Contractors

On July 30, 2009, Representative Jim McDermott (D-Wa.) introduced the Taxpayer Responsibility, Accountability, and Consistency Act of 2009 (H.R. 3408).  The legislation would make it more difficult for employers to avoid employment tax liability if they have misclassified a worker as an independent contractor and significantly increase employer penalties in the event of the misclassification.

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