Department of Labor crackdown - are your payroll practices compliant?
The U.S. Department of Labor (DOL) and the Internal Revenue Service (IRS) recently announced that they will be collaborating efforts to reduce employee misclassifications. The agencies will specifically focus efforts on weeding out employers who are wrongly classifying employees as independent workers to avoid paying them overtime and minimum wage. A DOL report claimed that as many as 30 percent of workers are misclassified
Some states have also entered into agreement with the federal agencies to fight back against misclassification. California, Colorado, Connecticut, Hawaii, Illinois, Louisiana, Maryland, Massachusetts, Minnesota, Missouri, Montana, Utah and Washington have all teamed up to coordinate efforts.
To avoid investigations and the possibility of penalties, employers can make sure their payroll recordkeeping policies and practices are in order and follow the Fair Labor Standards Act (FLSA) provisions. In addition, they can make sure they are not misclassifying employees by comparing a workers' duties against FLSA factors for independent contractors:
- the extent to which a workers' job duties are integral to the business
- the permanency of employment
- the workers' investment in the facility and equipment (i.e. if workers use their own tools)
- the nature and degree of control the employer has over the worker
- the workers' opportunities for profit and loss
- the level of skill a worker must have to perform the job
Some states have also entered into agreement with the federal agencies to fight back against misclassification. California, Colorado, Connecticut, Hawaii, Illinois, Louisiana, Maryland, Massachusetts, Minnesota, Missouri, Montana, Utah and Washington have all teamed up to coordinate efforts.
To avoid investigations and the possibility of penalties, employers can make sure their payroll recordkeeping policies and practices are in order and follow the Fair Labor Standards Act (FLSA) provisions. In addition, they can make sure they are not misclassifying employees by comparing a workers' duties against FLSA factors for independent contractors:
- the extent to which a workers' job duties are integral to the business
- the permanency of employment
- the workers' investment in the facility and equipment (i.e. if workers use their own tools)
- the nature and degree of control the employer has over the worker
- the workers' opportunities for profit and loss
- the level of skill a worker must have to perform the job
All data and information provided on this news blog is for informational purposes only. Infinisource makes no representations as to accuracy, completeness, suitability, or validity of any information on this site and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. All information is provided on an as-is basis. Information regarding employment suits and other legal action is not updated after publication, and may not be current.