☰ ˟
Alliance circular logo listing Alliance services : Insurance, Payroll, Benefits, HR 
Home Page Email
  • Home
  • Business Insurance
    • Business Insurance Solutions
    • Workers Compensation
    • General Liability
    • Bonds
    • Cyber Liability
    • Professional Liability
    • Group Health
    • Payroll and HR
    • Trade Credit Insurance
    • Key Person
    • 401k
    • Safety Programs
  • Personal Insurance
    • Personal Insurance
    • Home/Auto/Life
    • Automobile
    • Homeowners
    • Valuables Insurance
    • Life
    • Motorcycle
    • Off-Road Vehicles Insurance
    • Renters
  • Industry Solutions
    • All Industries We Serve
    • Commercial Real Estate
    • Construction
    • ContractorsImage of right arrow
      • Window Cleaning Insurance
      • Fire Protection Insurance
      • Janitorial Services
      • Landscaping & Lawn Care
      • Alarm Installation Insurance
      • Tree Service & Arborists
    • Crane, Rigging, & Crane Operators
    • Manufacturing
    • Oil & Gas
    • Restaurant & Bars
    • Gym and Fitness Center Insurance
    • Medical Malpractice Insurance
    • Trucking
  • Our Team
    • About Us
    • Location(s)
    • Associate Agencies
    • Testimonials
  • Blog
  • Contact Us
Business
Insurance
Home/Auto
/Life
Health &
Benefits
Payroll
& HR
Home > Blog > Increased Federal and State Scrutiny for Independent Contractors
FRIDAY, APRIL 17, 2015

Increased Federal and State Scrutiny for Independent Contractors

contractors building a bridgeIndependent contractors will be scrutinized even more, by both state and federal regulatory bodies.

In a December 2014 Wall Street Journal article, the Department of Labor’s (DOL) chief enforcer identified misclassification of independent contractors as one of its biggest enforcement issues. In addition, over the last several years, the IRS has collected hundreds of millions in back taxes and penalties from employers who improperly classified employees as independent contractors. Since 2011, the IRS and DOL have had a Memorandum of Understanding (MOU) to "improve coordination on employee misclassification compliance and education" through "enhanced information sharing and other collaboration." The IRS duties under the MOU appear to be directed toward evaluating and following up on employment tax referrals provided by the DOL as the result of the DOL’s investigation into independent contractor issues. We expect the DOL to continue to work with the IRS to identify and remedy employee misclassification.

Beyond these federal agencies, employers must be aware that state agencies are also increasingly investigating employer use and reliance on independent contracted labor. What is more, employers must be cognizant of the fact that state rules and regulations do not necessarily mirror those of the federal agencies investigating the use of contracted labor. What this means is that while a business may survive an audit by one agency with no adverse determination made, that same business could suffer an adverse determination by another agency (state or federal) that utilizes a different standard for evaluating independent contractor status.

Smart Tip: Be sure you understand what the criteria are for independent contractors. There are three different standards commonly used by the federal courts and agencies to determine independent contractor status: (1) the IRS 20-factor analysis, for coverage under federal withholding requirements; (2) the "economic reality" test, used to determine compliance with requirements of the Fair Labor Standards Act (FLSA); and (3) the common law "right to control" test, used by many courts to administer discrimination and benefits statutes. One of the key issues common to all of the tests is whether your organization exercises control over how the worker performs the job. In addition, be sure you can support the classification with documentation showing that the worker meets the IRS and other independent contractor criteria. Finally, and this is critical, be aware that state laws affect how one should craft their independent contractor agreement and familiarity with state law requirements as overlaid with the federal requirements is critical if a risk is to be mitigated.

(Source: theARgroup.com)
Posted 10:43 AM

Tags: business insurance, contractors, construction
Share |


NOTICE: This blog and website are made available by the publisher for educational and informational purposes only. It is not be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state. By using this blog site you understand that there is no broker client relationship between you and the blog and website publisher.
Blog Archive
  • 2023
  • 2022
  • 2021
  • 2020
  • 2019
  • 2018
  • 2017
  • 2016
  • 2015
  • 2014
  • 2013

  • business insurance(102)
  • personal insurance(73)
  • small business(30)
  • homeowners(28)
  • car and auto(28)
  • health and benefits(26)
  • health insurance(19)
  • cyber(19)
  • saving money(18)
  • contractors(17)
  • claims(17)
  • construction(15)
  • workers compensation(12)
  • bar and restaurant(11)
  • life insurance(11)
  • agency news(9)
  • cost containment(8)
  • general liability(7)
  • oil and gas(7)
  • payroll and hr(6)
  • roofing(5)
  • bonds(4)
  • personal lines(4)
  • commercial auto(4)
  • job(4)
  • cannabis(3)
  • hail(3)
  • recognition(3)
  • become an agent(3)
  • commercial insurance(2)
  • auto insurance(2)
  • homeowners insurance(2)
  • professional liability(1)
  • hail damage(1)
  • property(1)
  • covid-19(1)
  • alliance team(1)
  • broker of record(1)
  • colorado(1)
  • trucking(1)
  • record hail(1)
  • payroll(1)
  • hail insurance(1)
  • crane(1)
  • winter weather(1)
  • oil & gas(1)
  • motorcycle(1)
  • product liability(1)
  • commercial auto insurance(1)
  • inland marine(1)

View Mobile Version
  • Carrier
  • auto-owners insurance logo
  • Carrier
  • Carrier
  • Carrier
  • Carrier
  • Carrier
Connect With Us:
Social Social Social Social
Agency
Alliance Insurance Group
7910 Ralston Rd., Ste 7
Arvada, CO 80002

Phone: (303) 279-9700
Business Insurance
Home/Auto/Life
Health & Benefits
Payroll & HR
Home
About Us
Privacy Policy
Contact Us
Powered by Insurance Website Builder
Alliance Insurance Group Rated 4.8 / 5 based on 5 reviews. | Review Us