Illinois among states eyeing worker misclassification issues

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in Compensation and Benefits,Human Resources

While Congress ponders the Employee Misclassification Prevention Act, several states are studying ways to target employers that misclassify their employees as independent contractors.

Illinois is part of a joint task force studying the misclassification problem. Other task-force states are Iowa,  Maine, Massachusetts, Minnesota, New Hampshire, New York, Rhode Island, Vermont and Washington.

Connecticut Attorney General and Democratic U.S. Senate candidate Richard Blumenthal released his own report calling for greater scrutiny of employers that file 1099s, and greater fines for misclassifying workers.

That mirrors the likely federal approach. Look for bigger fines for violators, tougher requirements to inform workers of their status, stiffer penalties for retaliating against workers who dispute their status and—significantly—more government auditing of worker classification practices and documents. 

Note: With all levels of government facing growing deficits, employee misclassification is just the type of high-profile, politically popular move politicians love. Employers should review all independent contractor relationships to ensure the contractors truly are independent. The U.S Department of Labor and the IRS will look at how much control the employer exerts over the employee/contractor and whether the contractor is truly independent enough to work for other clients as well. Review these with your attorney to determine whether your contractors should be employees or not.


{ 1 comment… read it below or add one }

Andre Moreau January 11, 2013 at 7:55 am

This problem with independent contractor is really getting out of hand in the trucking industry. Major carriers are lease/ purchasing tractors to pull company freight and there by avoiding all the social security and other tax responsibilities they should be paying. If they can cut the costs of government they can either reap higher profits for themselves or cut the cost of transport and provide cheaper freight rates for their customers. As long as the total control of that vehicle is dependent on the company then the driver of said vehicle should be a employee. Yes you are purchasing that vehicle but, it costs the economy and government. And we wonder why the treasury and the deficit keeps getting deeper in the red ink. This could possibly be a huge billions of dollar tax dodge that needs to be stopped . When and if the truck is paid off in full and the lease purchaser has 100% control of when, what and where he hauls his loads he is NOT an independent contractor but a contractor that is subserviant to the carrier and in complete control of said carrier at all times and thusly is still a regulated employee.

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