Many employers choose to work with independent contractors, which may be acceptable if the worker is properly classified. The IRS, individual states, and the various employment laws with which employers must comply all have "tests" for determining who is a contractor and who is an employee for purposes of the working relationship, unemployment, workers' compensation, and federal and state tax laws. Employers in the construction industry also must comply with workplace fraud laws that encumber those employers with additional obligations.
Employers who get this wrong suffer severe penalties, including back taxes, back wages, and in some cases, criminal violations. During this Coffee Chat, we will discuss:
- Primary "tests" used to determine worker misclassification
- Various penalties and costs associated with misclassifying workers
- Construction employers' workplace fraud statutes, including a look at the Power Design, et al. case pending in the District of Columbia
- Steps to take if you suspect you have misclassified workers