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
As mandated by the Illinois Department of Labor, all construction contractors hiring independent contractors must post the Illinois Employee Classification Act of 2008 Poster.
The recent signing of the New York State Commercial Goods Transportation Industry Fair Play Act has resulted in an update to the Employment Law Manual and a new addition to the Legal Timetable.
In-depth review of the spectrum of New York employment law requirements HR must follow with respect to independent contractors
Under the New York State Commercial Goods Transportation Industry Fair Play Act, drivers classified as independent contractors will need to satisfy either a variation of the ABC Test or an 11-factor test for determining whether they constitute a separate business entity.
In-depth review of the spectrum of Illinois employment law requirements HR must follow with respect to independent contractors.
California has long been among the most active states when it comes to employment law. Anthony Oncidi, head of the labor and employment law group at the Los Angeles office of Proskauer Rose, discusses recent changes in the law plus other key challenges affecting California employers.
New York is the 15th state to join the US Department of Labor's Misclassification Initiative, following California, Colorado, Connecticut, Hawaii, Illinois, Iowa, Louisiana, Maryland, Massachusetts, Minnesota, Missouri, Montana, Utah and Washington.
This How To outlines the steps an employer should follow to take advantage of the Section 530 safe harbor, through which an employer that has improperly classified an employee as an independent contractor can avoid paying unpaid employment taxes, penalties and interest.
XpertHR has added a new article discussing the steps an employer must take both before and during a relationship with an independent contractor to avoid liability for unpaid employment taxes, penalties and interest in the event of a misclassification.
HR guidance on legally classifying and managing independent contractors under federal tax and employment laws.