Misclassifying an employee as an independent contractor can be one of the most costly mistakes you can make.

The Department of Labor reported that it recovered over $246 million in back wages for more than 240,000 employees in 2015 due to being misclassified as independent contractors.  That number is up significantly from 2014, where its investigations resulted in more than $79 million in back wages for approximately 109,000 workers.  According to the Bureau of Labor Statistics, 14.4 million people are classified as independent contractors.  This number represents almost 10% of the total work force.  The Department of Labor estimates that approximately 3.4 million of these workers are classified as contractors when they should be classified as employees.  Misclassifications can be costly – they can even result in criminal penalties in extremely egregious cases.  How do you avoid this costly mistake?

Learning Objectives:

• How big is the issue?
• What is the difference between an independent contractor and an employee?
• Which federal agencies care about classification and why?
• Internal Revenue Code Category Test
• Fair Labor Standards Act “Economic Realities” Test
• Right to Control Test
• Relative Nature of the Work Test
• “ABC” Test
• Case Examples

Who Will Benefit: Human resource professionals, Risk Managers, Business Owners

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