Tag Archives: Employee Classification

Pennsylvania Enacts Bill Targeting The Misclassification Of Construction Workers

On October 13, Pennsylvania Governor Edward G. Rendell (R) signed the Construction Workplace Misclassification Act (H.B. 400), which sets forth a number of prerequisites for classifying construction industry workers as independent contractors as opposed to employees.  Under the Act, the consequences for misclassifying a worker as an independent contractor are severe.  The Act is part … Continue Reading

Kentucky Attorney General Sues Fedex For Employee Misclassification

In yet another employee misclassification case, Kentucky Attorney General, Jack Conway, brought suit against FedEx Corp. alleging that FedEx violates Kentucky state law by misclassifying its drivers as independent contractors.  The Complaint contends that FedEx violated state law in regards to unemployment insurance, workers compensation, payroll taxes, and the Kentucky Consumer Protection Act.  The lawsuit … Continue Reading

Congress Proposes Additional Independent Contractor Legislation; “The Fair Playing Field Act” Receives Strong Support From White House

Our prior posts have chronicled recent attempts by Congress and state legislatures to crack down on employers who misclassify employees as independent contractors, the most notable of which was the Employee Misclassification Prevention Act that, among other things, seeks to create a cause of action under the FLSA for misclassification and to require employers to … Continue Reading

Ninth Circuit Adopts Single Test For Employee/Independent Contractor Determinations

The U.S. Court of Appeals for the Ninth Circuit recently held—consistent with other courts that have considered the issue—that “insurance agents are independent contractors and not employees for purposes of various federal employment statutes,” including ERISA, the ADEA, and Title VII.  In Murray v. Principal Financial Group, Inc., case number 09-16664, the panel unanimously affirmed … Continue Reading

Conducting Internal Audits To Ensure Employees Are Properly Classified

The proposed 2011 fiscal year federal budget signifies a renewed commitment to combating employee misclassification, as it contemplates funding an additional 4,700 investigations into worker misclassification issues.  With penalties for worker misclassification being quite steep — including back taxes, interest, and even punitive fines — employers should audit their workforce to ensure that their independent … Continue Reading

Congress’s Latest Attempt To Curtail Use Of Independent Contractors

Continuing a trend in Congress to limit employers’ use of independent contractors, on April 22, 2010, Rep. Lynn Woolsey (CA) and Senator Sherrod Williams (OH) introduced the Employee Misclassification Prevention Act (H.R. 5107, S. 3254) (“EMPA”) in the House and Senate respectively.  The EMPA would amend the Fair Labor Standards Act (“FLSA”) and render worker misclassifications … Continue Reading

Misclassification Of Workers: Restrictions And Enforcement On The Rise

Previously we have discussed the risks associated with contingent worker arrangements (engagements of independent contractors, consultants, freelancers, temporary staffers, and “as needed” workers, etc.).  These risks will continue to grow in the coming months, as more claimants emerge seeking damages, government agencies increase their enforcement efforts, and state and federal legislators create new restrictions and … Continue Reading

Contingent Workers: Know The Risks And Take Corrective Action Now

Many employers recognize the advantages of “alternative” work arrangements with independent contractors, consultants, freelancers, temporary staffers, and “as needed” workers.  Generally, employers utilize these arrangements because they hope to obtain cost savings and increased flexibility, particularly in an uncertain business climate.  In some companies, use of a contingent worker expands working capacity without increasing employee … Continue Reading

Use of Independent Contractors Facing Increased Scrutiny

Government agencies are being urged to step up their efforts to address the potentially widespread problem of improper classification of workers as independent contractors, according to a recent study by the United States Government Accountability Office (GAO).  In a 70-page document, the GAO concluded that the U.S. Department of Labor (DOL) and the Internal Revenue … Continue Reading
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