Misclassification of Employees as Independent Contractors Can be Costly

 A recent press release from the Department of Labor contains a striking statistic: Since September 2011, when the Wage and Hour Division began entering into memorandums of understanding with states and announced a similar partnership with the Internal Revenue Service, the Division has collected $9.5 million in back wages for more than 11,400 workers where the primary reason for minimum wage or overtime violations was that the workers were not treated or classified as employees.  That is a whole lot of independent contractors who really should have been hired as employees.  And, a great big reminder that employers need to carefully analyze their relationships with independent contractors to make certain the individuals really are contractors.  For more information on states that have signed memorandums of understanding (Oregon has not, Washington has), see: http://www.dol.gov/whd/workers/misclassification/.

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