Worker Misclassification Under Fire

Online Exclusive: DOL Changes Policy of Wage and Hour Opinion Letters

Corporate America isn't the only place where there's pressure to improve the bottom line. Debt burdened governments, both federal and state, are searching for new sources of revenue, too. And they are seizing on lost tax dollars from employers who misclassify workers as independent contractors as one way to replenish their coffers.

Competitive Advantage

That legal morass is confronting growing numbers of companies in industries ranging from health care to transportation to landscaping to sales. Strapped for help after the layoffs of the past two years, many have seized on hiring independent contractors as a way to close the labor gap without taking on the cost and liability of hiring permanent employees.

Other factors that play into the analysis include the expected duration of the relationship, how the person is paid--for hours or results--and whether he performs services nearly identical to those performed by employees.

"It is very fact specific and very difficult to generalize because of the variations between statutes," Coleman says.

Senior Editor

Mary Swanton

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