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 […]
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 […]
Two weeks ago we posted an alert about a preliminary injunction blocking the Department of Labor’s new overtime-exemption rule. The rule was scheduled to take effect on December 1st. While the fate of the rule remains uncertain, the Department of Labor recently filed a notice of intent to appeal the trial court’s preliminary injunction.
For business owners monitoring the status of the case, we’ve gathered the following links providing coverage and commentary on the case. These links do not necessarily represent the opinion of Zlimen & McGuiness, PLLC, and are provided solely for our readers’ interest […]