The Department of Labor published its final rule on a more employer friendly independent contractor test yesterday. Too little too late comes to mind because the Biden administration can (and will) rescind the rule and your state probably has a stricter standard that applies to your workplace.
Biden’s pro-labor platform includes giving most workers the protections and benefits of an employee-employer relationship. From the campaign website:
This epidemic of misclassification is made possible by ambiguous legal tests that give too much discretion to employers, too little protection to workers, and too little direction to government agencies and courts… .As president, Biden will work with Congress to establish a federal standard modeled on the ABC test for all labor, employment, and tax laws.
California’s ABC test is one of the strictest in the country. Many states–including Massachusetts–already have equally tough tests. We expect to see more enforcement of misclassification at the state and federal level, which is a revenue generator for government. Remember, there is no defense to wrongly classifying your workers– just penalties, fines and back taxes. We recommend taking a look at your workforce, using our Independent Contractor Classification Audit. Like all of our fixed fee services, the Independent Contractor Classification Audit is user friendly.
If you have independent contractors at your organization, contact us. We can help.