THE DOL’s New Rule on Independent Contractors

Overview:

Misclassifying workers as either independent contractors or employees carries significant legal and financial risks, including severe payroll tax assessments that could threaten a business's financial stability. As employment laws continue to evolve, it's crucial for businesses across all industries to accurately determine worker status to navigate these complex regulations effectively.

Recent incidents across various sectors have underscored the complexities of worker classification. For example, high-end spas in New York faced significant penalties for misclassifying massage therapists when they controlled significant aspects of the therapists' work, such as schedules and pricing. Similarly, in the tech industry, companies have grappled with the status of software developers who, despite working on a project basis, are deeply integrated into company operations with restricted freedoms typical to independent contractors. Additionally, a landmark case involving a delivery service company further highlighted these issues; drivers classified as independent contractors were found to be employees because the company exerted significant control over their schedules, uniforms, and delivery routes. This case has influenced numerous subsequent rulings in the transportation industry, emphasizing the critical factor of control in determining employment status.

This webinar will delve into what defines an independent contractor versus an employee, emphasizing the importance of independence in the working relationship. We will examine the key factors that influence worker classification, such as the degree of control over work conditions—including pay rates, provision of tools, scheduling, and the specifics of service delivery. We will also discuss how recent changes, such as the Department of Labor's January 2024 Final Rule, refine the criteria for classifying independent contractors under the Fair Labor Standards Act (FLSA). This rule emphasizes economic independence and the business nature of the worker’s role and is designed to complement existing tests like the IRS’s common law 3-factor test and various state-specific ABC tests, enhancing our understanding and application of these criteria.

These discussions are not just theoretical but are grounded in real-world implications, highlighting the need for businesses to apply classification tests carefully to avoid legal repercussions. From personal care to technology and construction, the principles of proper worker classification remain consistent, reflecting the widespread relevance of this issue.

Areas covered:

• Misclassification Facts – IRS estimates of lost revenue
• Who Cares? – Variety of agencies that audit for this and why
• THE DOL’s FINAL RULE (6 Factor "economic reality" Test)
• IRS 3 Part Test – the minimum standard for federal     and state purposes
• IRS pub 1779VII. State Determinations – how they are being narrowed year by year
• Exposure. – How to determine your vulnerability to audit
• Procedures for ensuring proper classification – how to tighten up your company procedures
• Ancillary Issues
• Electronic Filing and TIN matching
• Backup Withholding
• Current Cases

Why should you attend?

Are you certain your company is classifying its workers correctly?

Misclassifying employees as independent contractors, or the reverse, can expose your business to significant financial penalties, legal battles, and damage to your reputation. The regulations surrounding worker classification are complex, constantly shifting, and differ across federal and state jurisdictions. This issue isn't confined to the gig economy; recent cases have impacted industries ranging from personal care to technology, demonstrating the widespread relevance of this critical issue.

This webinar is essential for anyone responsible for hiring, managing, or paying workers. We will move beyond theoretical discussions to illustrate the costly consequences of misclassification. You'll gain a clear understanding of the DOL's 2024 Final Rule, the nuances of IRS and state tests, and the key factors that determine worker status.

We will equip you with practical compliance strategies, helping you develop robust procedures for classifying workers, documenting your decisions, and minimizing your risk of audits and penalties. You will learn how to determine your company's vulnerability and the necessary steps to mitigate risks. We will also address ancillary issues like electronic filing and backup withholding. Don't wait for an audit or lawsuit to reveal errors in your worker classifications. Attend this webinar to gain the knowledge and tools you need to confidently classify your workers, protect your business, and ensure compliance with federal and state laws.

Who will benefit?

This webinar is designed for professionals across all industries who are responsible for worker classification and compliance, including:

• Business Owners and Executives
• Human Resources Professionals
• Payroll and Tax Professionals
• Operations Managers
• Staffing and Recruiting Agencies
• Compliance Officers
• Companies Utilizing Independent Contractors