Independent Contractor Classification Under Scrutiny in New DOL Guidance
Companies that hire ndependent contractors may be in need of job classification audits based on new U.S. Department of Labor guidance, write attorneys April Boyer and Amy Groff.
August 12, 2015 at 05:00 AM
4 minute read
In South Florida, which is an on-demand economy, it is not uncommon for business owners to classify workers as contractors rather than employees.
There are tangible economic and business benefits to using independent contractors. Independent contractors are considered self-employed, so there is no obligation to withhold or pay income, Social Security, Medicare and/or unemployment taxes; to provide employee benefits and workers' compensation insurance; and to pay a minimum wage and overtime, as there usually is with employees.
These advantages make it tempting to classify a worker as an independent contractor, but decisions to classify workers as independent contractors must be done carefully, in part because the U.S. Department of Labor, Wage and Hour Division continues its “robust” enforcement efforts to remedy misclassification of workers and takes the view that most workers are properly classified as employees — not independent contractors.
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