We touched on the new independent contractor rules issued by the Department of Labor and the National Labor Relations Board during our January legislative update, but many of our attendees followed up by requesting more in-depth training on navigating independent contractor relationships in your businesses.
The Department of Labor (DOL) has extended the public comment period on its newly proposed test to determine whether a worker is an employee or independent contractor under the Fair Labor Standards Act (FLSA). If adopted, the proposed rule would rescind a prior rule published on January 7, 2021 (2021 IC Rule). Importantly, the new test would only apply to classifying workers under the FLSA. Different tests apply for determining employee status under, for instance, the Internal Revenue Code, Title VII and state employment laws.
The Biden Administration has directed a number of changes that impact employers under Administrative Agency action as well as the passage of the American Rescue Plan Act (ARPA). We are highlighting a few of those here to alert employers and will cover them more in-depth in later blogs or our seminars.
This blog has previously covered the potential pitfalls of classifying workers as independent contractors. While classifying a worker as a “1099” offers many potential benefits on the business side, it can expose the company to significant tax liability, statutory penalties, and monetary damages.
As this blog previously covered here and here, the United States Department of Labor under President Obama cracked down on misclassification of workers as independent contractors and broadly interpreted who was considered a “joint employer.”