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{"id":2421,"date":"2004-08-09T15:36:42","date_gmt":"2004-08-09T15:36:42","guid":{"rendered":"https:\/\/www.californialaborlaw.info\/?p=504"},"modified":"2004-08-09T15:36:42","modified_gmt":"2004-08-09T15:36:42","slug":"irs-helping-you-get-paid","status":"publish","type":"post","link":"https:\/\/www.california-labor-law-attorney.com\/irs-helping-you-get-paid\/","title":{"rendered":"Is the IRS actually HELPING you?"},"content":{"rendered":"

\"Woman<\/p>\n

Question: What Three Government Entities Want to Make Sure You are Paid Properly?<\/p>\n

Answer:\u00a0Department of Labor, the Internal Revenue Service, and Congress.<\/p>\n

Our budget deficit has all three of these entities working towards a common goal: tax revenue.
\nThey are putting pressure on employers, big and small, to make sure they are properly classifying their workers. As an independent contractor, you would be responsible for paying your own taxes and you wouldn\u2019t be covered under the company\u2019s worker compensation insurance or unemployment insurance, making it near impossible to get worker compensation if you are hurt, or unemployment benefits if you are fired. Essentially, all of the financial responsibility is on the independent contractor. The employer is relieved of a substantial amount of taxes and insurance costs by hiring independent contractors.<\/p>\n

The issue is that companies can\u2019t just decide that you will be an independent contractor. There are specific laws dictating who can and cannot be classified as such. An independent contractor should be independent enough from the company to have control over the following:
\nScheduling;<\/strong> the freedom to create and maintain their own schedule so long as major deadlines are met.
\nEquipment<\/strong>; should be able to chose what type of their own equipment they will use to complete the work, including vehicles.
\nUniforms;<\/strong> should not be forced to wear the hiring company\u2019s logo\/ uniforms as if they are an employee.
\nHow the task is completed<\/strong>; should not be told in detail how to perform the work. End goals are really all the hiring company should be imposing.<\/p>\n

“We Can Help” – The Department of Labor:<\/strong><\/a>
\nIndependent contractors\u00a0are not protected under the Fair Labor Standards Act protections for issues like minimum wage and overtime or other benefits, so often wrongly classified independent contractors do not receive legal protections they are entitled to. The “We Can Help” campaign encourages employees to seek aid from the DOL if they believe they are not being paid correctly or are misclassified. The DOL intends to further focus on fixing worker classification issues in 2011 by adding 90 new enforcement personnel and an additional $12 million to the Wage and Hour Division’s budget.<\/p>\n

Even More “Help”- The Internal Revenue Service:<\/strong>
\nEmployee classification is a front runner with the IRS because employers are not required to pay social security, Medicaid, unemployment, or other payroll taxes on\u00a0independent contractors. In an attempt to rectify these improper misclassifications, the IRS will be adding 100 new enforcement agents and allocating $25 million to investigating misclassification of employees as independent contractors. IRS audits may also impose penalties and require payment of back pay and taxes for workers previously misclassified. The Treasury Department estimates an increase of by $7 billion over the next ten years.<\/p>\n

Congress: Proposed Legislation Affects Even Small Employers<\/strong>
\nCongress offered up new legislation regarding worker classification, The Fair Playing Field Act of 2010. This bill is intended to amend Section 530 of the\u00a0Revenue Act of 1978, which currently provides a safe harbor for companies to treat employees as independent contractors for tax purposes if the company has a logical basis for treating them as such and has consistently reported their income on Form 1099s. If passed, this bill would eliminate that safe harbor and employers would be open to larger penalties for worker misclassification, even good faith mistakes.
\nEmployee Misclassification Prevention Act is another bill that has recently been proposed. It focuses on classification for purposes of compliance with the\u00a0Fair Labor Standards Act. That Act was introduced in April 2010 and would create a new FLSA violation: misclassification of an employee as an independent contractor. The Act would also:
\nImpose notice and record-keeping requirements on businesses with independent contractors,
\nImpose fines on businesses for each employee misclassification,
\nExpand FLSA’s anti-retaliation provisions to cover independent contractors, and
\nAward triple damages for violations of minimum wage or overtime laws for employees wrongfully classified.
\nThe Fair Playing Field Act and the Employee Misclassification Prevention Act are both intended to correct perceived abuse of the independent contractor label. The Acts contain different tests for determining who is an independent contractor and who is an employee, which may lead to even more confusion surrounding the issue.<\/p>\n

To be safe you should contact our San Francisco Labor Law Attorney<\/a> to examine your job duties and work conditions to determine your worker classification status. If you have been improperly classified as an independent contractor, we may be able to help you recover back pay, overtime, and benefits.<\/p>\n

\n

Photo Credit: Shutterstock\/michaelheim<\/p>\n","protected":false},"excerpt":{"rendered":"

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