US – Employee or independent contractor ? DOL issues with fresh guidance

The Labor Department has waded into a heated workplace issue with fresh guidance on how businesses should distinguish between employees and independent contractors.

So-called employee misclassification has become a hot topic recently as the economy has changed and hundreds of growing businesses such as Uber Technologies turn increasingly to contract workers.

On Wednesday, the administrator of the Labor Department’s Wage and Hour Division set out to address the confusion by officially releasing a 15-page memo of guidance—the division’s first on the topic since President Barack Obama took office.

Labor Secretary Thomas Perez has called misclassification a serious problem that not only deprives workers of overtime pay and benefits, such as unemployment insurance, but also undermines state and federal tax collections.

Chosen excerpts by Job Market Monitor. Read the whole story at Labor Department Releases Guidance on Classification of Workers – WSJ.

The Application of the Fair Labor Standards Act’s “Suffer or Permit” Standard in the Identification of Employees Who Are Misclassified as Independent Contractors 

Misclassification of employees as independent contractors is found in an increasing number of workplaces in the United States, in part reflecting larger restructuring of business organizations. When employers improperly classify employees as independent contractors, the employees may not receive important workplace protections such as the minimum wage, overtime compensation, unemployment insurance, and workers’ compensation. Misclassification also results in lower tax revenues for government and an uneven playing field for employers who properly classify their workers. Although independent contracting relationships can be advantageous for workers and businesses, some employees may be intentionally misclassified as a means to cut costs and avoid compliance with labor laws.

Chosen excerpts by Job Market Monitor. Read the whole story at  The Application of the Fair Labor Standards Act’s “Suffer or Permit” Standard in the Identification of Employees Who Are Misclassified as Independent Contractors