Contingent Concerns

In the best-case scenario for employers, we will start the new year with the recession over, the economy robustly bouncing back and companies expanding workforces through the quickest, most flexible, least costly means possible: hiring contingent workers.

Sounds wonderful in the abstract. But in reality, the term "contingent worker" raises red flags for labor and employment experts. While acknowledging the economic benefits of taking an alternate route to hiring new employees, they caution that in today's litigious environment and with state and federal regulators looking aggressively into hiring practices, contingent workforces are a potential legal quagmire.

He notes that Secretary of Labor Hilda Solis is pushing for stronger enforcement of wage-and-hour regulations, meaning "soon there will be additional investigators augmenting the plaintiffs bar. This will be like driving with 300 highway patrol officers covering every exit."

Out-of-Sight Liability

Meanwhile, states are stepping in with their own regulations. In May, for example, Maryland adopted the Workplace Fraud Act of 2009, which allows the state to crack down on employers who wrongly classify their employees as independent contractors or do not classify them at all.

Schmidt estimates at least a dozen states have enacted legislation similar to Maryland's. In July, Rep. Jim McDermott, D-Wash., reintroduced federal legislation that defines the rules by which companies can classify workers as independent contractors and imposes new penalties for misclassifications.

Dave Wieczorek

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