Independent Contractors and the New Economy

The fact of the matter is, there is much confusion regarding the status of who actually is an independent contractor.

Despite rumors that the economy is slowly, very slowly rebounding, government entities nationally are in fiscal holes:

  • The Obama administration estimates that there is up to $2.7 billion+ in unpaid Social Security, unemployment insurance and income taxes from employers and workers.
  • The IRS has added 200 employment tax auditors and is reviewing its employer guidelines.
  • The U. S Department of Labor is calling for 250 more Wage and Hour investigators.

The writing is on the wall. Because the Fair Labor Standards Act, judicial and regulatory decisions and IRS rules are vague and unclear could this not be construed an opportunity for additional revenues? Can state agencies be far behind as well as workers’ compensation carriers? This will happen with a national environment where one in five workers is considered an independent contractor, self-employed, free agent, freelancer, consultant, etc. With payroll cost savings up to one-third for this type of relationship, many employers consider this option.

Through Van Beurden’s Work Comp Navigator program, we provide appropriate resources for employers to review Independent Contractor status.

Establishing as much clarity as possible is essential to avoid costly additional premiums in workers’ comp as well as various fines, penalties and assessments from other regulatory agencies. Working with trained auditors — and performing audits myself — for years, I can unequivocally state it is always best to “be prepared.”

Van Beurden recommends that all employers considering or already involved in Independent Contractor relationships visit this issue with their labor attorney before something happens. We can provide referrals to established labor attorneys located throughout the United States.

Please contact me with your comments or questions. If you would like additional information, let me know.

Thank you for you interest in my blog.

Mark O'Bryan

mobryan@vanbeurden.com

Vice President | Los Osos