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More Aggressive Action By USDOL Against Classifying Workers As Independent Contractors

NEW U.S. DOL WEBPAGE ABOUT MISCLASSIFICATION MYTHS: Government agencies such as the U.S. Department of Labor ("U.S. DOL") continue to try to reign in companies that use independent contractors (and make it more high-risk for these companies to do so). In this spirit, the U.S. DOL recently established a controversial new page on its website called "Myths about Misclassification."

The obvious purpose of the U.S. DOL's webpage about Misclassification Myths is to educate (and scare!) already nervous companies into hurriedly reclassifying their workers as employees rather than as independent contractors. A few examples of the myths listed are as follows:

  • I received a 1099 tax form from my employer, and this makes me an independent contractor.
  • I am an independent contractor because I signed an independent contractor agreement.
  • I telework or work off-site, so I am an independent contractor.

If readers want to see the U.S. DOL's full listing of myths and the U.S. DOL's comments on the myths, the website address is:

https://www.dol.gov/whd/workers/Misclassification/myths.htm

TWO MORE STATE UNEMPLOYMENT INSURANCE AGENCIES JOIN FORCES WITH U.S. DOL: Other recent action by the U.S. DOL is the signing of a Memorandum of Understanding between the U.S. DOL and two more state unemployment insurance agencies (Pennsylvania and North Carolina) bringing the total now to 33 states who have joined forces with the U.S. DOL to share information and assist in enforcement efforts to identify and reduce independent contractor misclassification.

David Weil, the Wage and Hour Administrator for the U.S. DOL justified these aggressive actions by the U.S. DOL by saying his goal is "more workers receiving a fair day's pay for a fair day's work."

Any companies using independent contractors (or anticipating the use of independent contractors) should contact Attorney Nancy Joerg to consult, to find strategies and practical solutions to reducing the company's risk in using independent contractors, and to evaluate or create independent contractor agreements. Nancy Joerg can be reached at Wessels Sherman's St. Charles, Illinois office: (630) 377-1554 or email her at najoerg@wesselssherman.com.

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