Q. An HR colleague told me that government agencies have stepped up their scrutiny of independent contractor relationships. She said employers that have such relationships, or routinely have consultants working alongside employees, should beware. Can you shed any light on this report? What should we do?
A. Many employment lawyers have reported an increase in the number of challenges being made by government agencies to the classification of service providers as either contractors or some other nonemployee status.
Many lawyers speculate that those relationships are being examined more closely to capture taxes that would be due if the individual were classified as an employee.
The consequences of incorrectly classifying someone as an independent contractor can be significant. If your company regularly designates groups of individuals as contractors and not employees, have an employment attorney review your practices.
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