Employee vs. Independent Contractor Crackdown

The IRS, DOL, and various state agencies announced that they have entered a series of information-sharing agreements in their joint efforts to crack down on misclassification of workers as independent contractors.

Employers will sometimes use the independent contractor (mis)classification to avoid paying employer-side payroll taxes and subjecting themselves to employment laws that don’t apply outside the traditional employment relationship.

While various federal agencies (particularly the IRS) have focused on this issue in the past, it’s clear that the full force of the government will be on the lookout for misclassifications now. Employers must take the time to review their existing classifications to ensure their independent contractors and employees are classified correctly.


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