The U.S. Department of Labor on Tuesday unveiled a six-step “economic realities” test that looks to narrow the ability of employers to classify workers as independent contractors. The changes have broad implications as to whether, under federal law; workers are entitled to minimum wage and overtime pay; employers must comply with recordkeeping requirements for such employees; and payroll taxes such as FICA, workers’ compensation, and unemployment must be paid with respect to these workers. The misclassification of workers as independent contractors also can have dire consequences for employers based on the potential assessment of liquidated (double) damages and attorney’s fees under the Fair Labor Standards Act, particularly where such claims are brought as collective actions. The Department suggests that 10-30% of employers in the private sector are, per the proposed rule, misclassifying employees as contractors. …
Continue Reading Employees in Disguise: Proposed Rule Would Roll Back Trump-era Independent Contractor Rule