Independent Contractors Targeted

In an earlier blog, I advised you on the need to properly classify employees and independent contractors. I reported that both the IRS and state governments have begun increasing employer audits. Now we learn that, Congress has introduced new legislation targeting abuses of the employee/independent contractor classifications. The Employee Misclassification Prevention Act is aimed at insuring that workers who are considered “employees” under the broad test of the Fair Labor Standards Act (FLSA) are properly classified by their employers-making them eligible for minimum wage and overtime compensation and other statutory employee protections and providing tax revenue to the government through employer withholdings and payments.

 All employers should immediately begin a two pronged review:1) review every exempt employee to ensure they are properly classified under the Fair Labor Standards Act (FLSA); and 2) test each of your independent contractor positions using both the federal and states tests to ensure that they are properly classified. As I noted last month, a government audit can be painful, time consuming and expensive. Prepare now.

Advertisements

Leave a comment

Filed under Compliance, Leadership, Legislation, Management

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s