Are your independent contractors really independent? 

Department of Labor is coming down on misclassifications of workers

Hiring independent contractors can save you costs of health insurance and payroll taxes, but could possibly cost you more if the classification of this employee-employer relationship is wrong! The Department of Labor is coming down on the classification of workers, whether they are deemed as "employees" or "independent contractors." In the eyes of the Department of Labor, ALL workers are considered employees. Companies are using more independent contractors, rather than hiring employees, and they are cheating the government out of tax revenue. The internal revenue service is getting involved with the DOL and other government entities, and they are going to begin rooting out these "misclassifications." The Wage and Hour Division is indicating that they will begin to severly restrict the use of independent contractors, forcing businesses to reclassify workers as "employees," who are then subject to minimum wage and overtime requirements, as well as other laws offering employee protection. The DOL looks at a number of things to determine the classification of a worker: 

#1. How much control is exercised over the worker? Can they make their own schedule? Are they bound to a schedule made by the company they are working for?

#2. What is the permanency of the relationship? Are they a long term worker, or are they as needed per project?

#3. What is the integrity of the work they are performing? Is it work that directly effects the company, or is it work that does not directly effect the company?

Employers who have been and still are misclassifying workers could be in the scope of the government for unpaid taxes, back pay of overtime/minimum wage and lack of employee benefits! 

New Yorks look back period is two or three years, and federal look back time is six years.

There will be State and Federal litigation against all who are non compliant!

Could this be financially disastrous for your company?

CALL US TODAY TO MAKE SURE THAT YOU ARE COVERED AND PROTECTED.

Executive Insurance and Financial Services has been insuring companies for over 30 years. Give us a call today at 631-543-8433 to make sure that your company is covered and protected.