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States take the lead in contractor misclassification crackdown

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in Employment Law,Human Resources

by Richard J. Reibstein, Lisa B. Petkun & Andrew J. Rudolph, Esqs., Pepper Hamilton LLP

When we last wrote about independent contractor misclassification two years ago, we headlined the article “Feds on the lookout for misclassification.” The U.S. Department of Labor and IRS continue to aggressively enforce laws against misclassifying employees as independent contractors.

But a major shift has taken hold in the past two years, with state legislatures and regulators actively taking a greater role in cracking down on companies that classify workers as contractors without properly documenting or structuring their relationships with those individuals.

Indeed, companies that use freelancers, consultants, long-term temps and other contingent workers may now be in greater danger of violating state laws than federal statutes.

In the past two years alone, 11 states passed laws curtailing the use of independent contractors or increasi...(register to read more)

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