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Will proposed legislation put us on the financial hook for misclassified employees?

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in Compensation and Benefits,Human Resources

Q. If, according to the revised Employee Misclassification Prevention Act, we’ve been improperly classifying certain employees, do we need to go back and reimburse them? At the time, we thought they were properly classified.

A. The Employee Misclassification Prevention Act is proposed legislation that would amend the Fair Labor Standards Act (FLSA) to strengthen enforcement and penalties for the misclassification of employees as independent contractors.

As of this writing, it has not passed either the House or the Senate, but it is expected to get little opposition.

If you believe you have mistakenly misclassified an employee as an independent contractor, you should review the circumstances to determine whether you owe any overtime or minimum wage payments under the FLSA. Talk to your attorney about whether you need to reimburse those workers for back pay.

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