- The US Department of Labor (DOL) announced on January 6, its final rule clarifying the standard for employee versus independent contractor under the Fair Labor Standards Act (FLSA). The effective date of the final rule is March 8, 2021.
- It reaffirms an “economic reality” test to determine whether an individual is in business for him or herself (independent contractor) or is economically dependent on a potential employer for work (FLSA employee).
- It identifies and explains two “core factors” that are most relevant to the question of whether a worker is economically dependent on someone else’s business or is in business for themselves:-
- The nature and degree of control over the work;
- The worker’s opportunity for profit or loss based on initiative and/or investment.
- It identifies three other factors that may serve as additional guideposts in the analysis, particularly when the two core factors do not point to the same classification.
- The actual practice of the worker and the potential employer is more relevant than what may be contractually or theoretically possible.
- It provides six fact-specific examples applying the factors.
Uber, Lyft and other “Gig Economy” businesses have experienced huge success in the new millennium. A big part of the reason why is that they classify a large majority of their workers as independent contractors. But that business model is in danger. Many states are attacking the worker classification model, asking courts to mandate that their workers, usual drivers, are classified as employees.
Are you a food delivery service, or other business involved in the Gig Economy? Do you treat large classes of workers as independent contractors? If so, it would do you well to understand the simplified tests involved in classification. On the federal side, you can request a determination that prevents auditors from reclassifying your workers for you. There are also provisions that limit your liability if you want to reclassify them yourself.
You will learn what states are joining forces for mandatory employment vs those that grant more freedom to employers. You will be given best practices for protecting yourself from auditors and employees who find themselves wanting the safety nets provided by Unemployment Insurance and Workers Compensation Insurance. Mostly, you will come away armed with the knowledge that, when ignored, results in the bankruptcy of otherwise vibrant companies.
Join this session by expert speaker Mark Schwartz where he will explain how to take a critical look at your independent contractors, helping you determine who you should put on your payroll instead.
- Details on the 3-factor test used by the IRS.
- How to evaluate which factors are most important.
- What courts look at in tax cases
- How to document your determination.
- How to request a voluntary reclassification.
- IRS form SS-8
- Specific on Uber and Lyft cases, and other cases where workers were found to be misclassified.
- Other definitions of I/C’s used by states and the DOL.
- How to minimize audit risk of misclassification.
- How to evaluate your audit risk.
Why You Should Attend:
- Understand the new, simplified IRS rules for determining whether a worker is an employee or an independent contractor.
- Be able to determine if those workers you currently treat as independent contractors should be reclassified as employees.
- Know where to go to determine State rules on the same.
- Teach hiring managers how to know who to put on payroll.
- Prevent one of the most expensive mistakes an organization can make in hiring decisions.
Who Should Attend:
- Hiring Managers
- HR Professionals
- Payroll Professionals
- Executive Management
- Self Employed Individuals
You may ask your Question directly to our expert during the Q&A session.
** You can buy On-Demand and view it as per your convenience.