Overview: Having independent contractors offer benefits and risks. The benefits include avoiding certain taxes, legal liabilities and administrative challenges.
However, the risks can be great. Before filling a position with an independent contractor, it is essential to carefully consider the myriad factors that go into proper employee classification a worker as an independent contractor. An independent contractor should qualify not only under the tax code, but also several other state and federal employment laws that may come into play. Inaccurately classifying someone as an independent contractor can set an employer up for costly enforcement actions.
Trends: Government enforcement of independent contractor misclassification is stricter than ever, as the Internal Revenue Service, the U.S. Department of Labor and state agencies cooperate to enforce the laws.
Author: Michael Cardman, Legal Editor
Updated to reflect forthcoming independent contractor requirements under the New York City Freelance Isn't Free Act.
The New York City Council's Freelance Isn't Free Act creates and enhances protections for freelance workers, spotlighting gig economy enforcement issues at the municipal level.
The addition of Pennsylvania, North Carolina and Nebraska brings to 34 the number of states that have partnered with the US Department of Labor as part of its Misclassification Initiative.
The growth of contingent workers in the digital marketplace is one of the biggest trends of 2016 and has spawned a new term, the "gig economy." On this podcast, Fisher Phillips employment attorney Rich Meneghello discusses what the gig economy means for employers.
A previous independent contractor task force established in 2007 has been merged with two other task forces to form the new Joint Task Force on Employee Classification and Worker Exploitation.
Updated to reflect information on the Supreme Court of Connecticut ruling that the homes of an employer's customers are not necessarily 'places of business' under the state ABC Test for independent contractor classification.
In-depth review of the spectrum of Arizona employment law requirements HR must follow with respect to independent contractors.
The Arizona Declaration of Independent Business Status can be used to establish a rebuttable presumption of the existence of an independent contractor relationship under the state's labor code.
Updated to include whistleblower immunity notice under the federal Defend Trade Secrets Act, effective May 11, 2016.
Updated to reflect forthcoming FLSA overtime exemption requirements.
HR guidance on legally classifying and managing independent contractors under federal tax and employment laws.