More On

Labor: 4 steps to identifying and handling high-risk independent contractors

Reducing wage and hour liability in 2012

The misclassification of independent contractors will likely be one of the hottest wage and hour issues of 2012. The processes discussed below will assist in-house counsel in identifying potential high-risk contractors and reducing overall liability.

1. Identify Independent Contractors When the government conducts a misclassification audit, the Department of Labor (DOL) requests all 1099 tax forms and cash ledgers for the past three years. In-house counsel should review these documents for high risk contracts, paying particular attention to:

4. Examine Work Environment Even if the contract looks great, it is still important to get a sense of how work is actually performed. Some companies develop contractor surveys but, as surveys may result in the creation of evidence that could be used against the company, I recommend onsite visits.

During the visit, the company’s attorney should observe the following:

Managing Partner

author image

Salvador Simao

Salvador P. Simao is managing partner of Ford & Harrison LLP’s New Jersey office. Having spent the majority of his career as a trial attorney...

Bio and more articles

Join the Conversation

Advertisement. Closing in 15 seconds.