Employee or Independent Contractor? What to Do in the Wake of the Recent Rule Changes

Many businesses choose to work with independent contractors, which is perfectly acceptable. But only if you follow the legal parameters. The IRS has strict worker classification rules regarding who is a contractor and who is an employee. Most States have their own tests, as well. Get it wrong and you could face severe penalties, including back taxes, steep fines and, in some cases, even prison.

This webinar will provide valuable and practical insight on how to properly classify freelancers, consultants, temps and other contract workers-and how to tell whether the worker in question is really an employee. In this webinar, you will learn how and when your workers are legally your employees, or what be able to properly classify them as independent contractors. This topic is particularly timely in light of the Biden Administration’s very recent withdrawal of the rule promulgated by the Trump Administration.

Before Donald Trump left office, his administration passed a rule, somewhat narrowing the definition of who and what is an independent contractor - and then the Biden Administration withdrew that rule, rolling things back to the confusing place they were under the Obama Administration. Many employers believe that if their employees agree to certain pay arrangements, or agree to be classified as independent contractors, then there is no violation of the law. 

This is not the case. Employees cannot agree to waive their rights under the Fair Labor Standards Act. For example, offering your employees time off or additional benefits in place of overtime pay is still an FLSA violation-even if your employees sign a written contract to that effect. The FLSA and only the FLSA determines the employer’s FLSA obligations. In fact, even when an employee willingly goes along with, or even requests, an illegal pay arrangement s/he can still sue the employer for FLSA violations and recover any back pay he is owed under the law, in addition to keeping the extra pay and benefits he already pocketed under the illegal compensation system, and additional amounts in liquidated damages. If that’s not enough you may also be on the hook for your employee’s legal fees!

Whether a worker is an independent contractor or an employee is one of the most misunderstood areas in employment law, leaving businesses very vulnerable to fines, penalties and legal fees that can be staggering-particularly to smaller businesses. Businesses that try to escape paying payroll and other taxes in connection with their workers, or providing workers’ compensation coverage and other benefits do so at their peril. Since this practice results in loss of significant sums of money to both the federal and state governments, the  US Department of Labor has entered into agreements with many of its state counterparts to crack down on businesses that misclassify workers.

• Intro- FLSA, Overtime, Records
• Employee or Independent Contractor?
• Definitions
• Benefits
• Risks
• Tests
• IRS Test
• Right to Control
• Economic Realities

• HR managers
• HR Directors
• Department heads and supervisors
• Owners and managers of small businesses
• HR professionals
• HR Administrators
• Compliance Professionals
• Senior Managers
• CEO’s
• CFO’s
• Controllers
• Payroll/Compensation Officers
• In-House Counsel