Both the state and federal governments have been cracking down on independent contractor status. They call it “misclassification” of employees as independent contractors. In their eyes all workers are employees; none are “independent contractors.” Essentially any worker who performs work for your business and who doesn’t clearly have their own separate business will be considered your employee. In 2012, California made it a crime for someone to “willfully” misclassify a worker as an independent contractor (Labor Code section 226.8). California also made it a crime for anyone other than a lawyer to advise an employer to treat a worker as an independent contractor to avoid employee status (Labor Code section 2753). Both the employer and the person who advised the employer are “jointly and severally” liable if the worker is found not to be an independent contractor. This means both the employer and the advisor can be held liable for the misclassification. The stakes for “misclassification” issues are high.
Who is an “independent contractor?” This is a very misunderstood question in employment and labor law. And no, just because you “1099” them does not make them an independent contractor.
There are legal rules that determine who is an independent contractor. And if the worker is not an independent contractor, they are your employee.
Just because you meet the legal test …
Both the state and federal governments have been cracking down on independent contractor status. They call it “misclassification” of employees as independent contractors. In their eyes all workers are employees; none are “independent contractors.” Essentially any worker who performs work for your business and who doesn’t clearly have their own separate business will be considered your employee.
In 2012, California made …
Your tax dollars at work – the federal Department of Labor (DOL) has increased its budget request 16% in 2010 and 25% in 2011 over the 2009 budget (all you smaller business owners out there can groan out loud!).
Part of the reason for the requested increase in budget? So they can bust your company for misclassifying, according to them, “employees” …
Your tax dollars at work – the federal Department of Labor (DOL) has increased its budget request 16% in 2010 and 25% in 2011 over the 2009 budget (all you smaller business owners out there can groan out loud!).
Part of the reason for the requested increase in budget? So they can bust your company for misclassifying, according to them, “employees” …
So you would rather use independent contractors? Yes, we understand it’s much less headache: no workers’ compensation, no withholding, no payroll, no employment law liability, right? Wrong if you are negotiating with the EDD, DOL, Labor Commissioner or other friendly neighborhood bureaucrats.
The EDD and the federal Department of Labor in particular, seem to be on a mission to convert …
Continue Reading »We are in the information age where the “knowledge worker” is king. More and more workers wish to operate as “free agents”—independent contractors. The problem is the federal and state government haven’t quite figured that out yet. The hot topic for them is “reclassifying” free agent independent contractors to employees whenever possible, with devastating results from the business’ perspective. After …
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