A new program from the Internal Revenue Service and stepped up enforcement activity by the Department of Labor is putting renewed focus on how employers classify their workers.
The temptation to put the independent contractor label on those who are really employees is always there, says Rosemary Gousman, managing partner at law firm Fisher & Phillips. By doing so, employers skirt obligations to provide benefits, such as healthcare and pensions, and avoid paying all the necessary taxes, which can be significant. “Some spillover effects need to be addressed, such as employers using the independent contractor category to avoid paying unemployment and disability tax to federal and state governments,” she says.
