Many businesses try to hire “independent contractors” by issuing IRS Form 1099 and signing independent-contractor agreements. Unfortunately, these steps don’t guarantee that workers are legitimate subcontractors or independent contractors. Instead, federal and state guidelines generally focus on the worker’s job duties in order to determine the appropriate classification.
Each state can create additional rules and regulations pertaining to worker classification. Check with your state labor department for clarification on state-specific rules. However, the federal government’s guidelines, described below, generally provide enough clarity to determine proper worker classification.
Federal guidelines 1: IRS
The IRS […]
In May 2016, the US Department of Labor issued a new final rule amending the salary requirements for workers who qualified for overtime exemptions under the Fair Labor Standards Act (FLSA). Under the rule, the salary requirements for exempt workers would rise from a minimum of $455 per week ($23,660 per year) to $913 per week ($47,892 per year) with additional increases scheduled for every three years beginning in 2020.
In November 2016, before the new rule went into effect, a preliminary injunction was issued by a Federal District court in Texas, preventing the rule from taking effect […]
In May 2016, the City of Minneapolis passed a highly-publicized ordinance requiring most employers to provide paid sick and safe leave for many employees. The ordinance resurfaced in Minnesota headlines this week when a Hennepin County judge prevented the City from enforcing the ordinance against nonresident employers when it goes into effect in July.
Recap: The ordinance
Minneapolis Ordinance No. 2016-040 requires employers to provide their employees with 1 hour of paid sick/safe leave for every 30 hours worked, with annual caps and some rollover. Leave can be used for various illness- or safety-related […]
Misclassifying employees as independent contractors is a costly mistake. Under the federal Fair Labor Standards Act (FLSA), the difference between an employee and an independent contractor depends on the circumstances under which work is performed. The distinction has major implications for wage and benefit structures. Unfortunately, businesses routinely fall into the trap of classifying workers based on external criteria – such as cost savings, independent contractor agreements, or franchise operation – rather than on work circumstances.
This winter, in an effort to reach both businesses and workers, the DOL added several misclassification resources to its website. The additions include a mythbusters page […]