Ways to Hire & Onboard Remote Workers Recruiting remote workers has shifted to become a main focus for many businesses. Prior to the pandemic, many companies had little to no best practices in place for recruiting, hiring and onboarding remote workers and had to...
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There are plenty of reasons that some people choose to go out on their own and work as independent contractors: flexible hours, unlimited income potential, control over income taxes, and control over the trajectory of their careers. There are also many reasons companies like to hire independent contractors, two of the most common being scalability and cost.
Some companies question when they should begin to transition from hiring independent contractors to full-time employees, but a more serious question should be, are your independent contractors already employees who have been misclassified? According to the U.S. Department of Labor (DOL), most workers are employees. The DOL issued a guidance in July of 2015 stating that the “misclassification of employees as independent contractors is found in an increasing number of workplaces in the United States…”. The guidance goes on to state that when employees are improperly classified, those workers may not receive protections common in the workplace, such as minimum wage pay, overtime compensation, unemployment insurance, and workers’ compensation. The reality is that this is another one of the situations where “it’s good until it’s not.” Thus, the problem is that employees classified as independent contractors will request to be classified as such until they realize that they are in dispute with their employer, e.g., they are terminated and request benefits normally provided to employees.
How will the recently proposed Fair Labor Standards Act (FLSA) regulations affect your organization? On June 30, 2015 the Wage & Hour Division (WHD) of the Department of Labor (DOL) released their proposal to change the FLSA standards for exempt employees. The new regulations will raise the minimum salary requirements for exempt employees, extending protection to millions of Americans that aren’t covered by overtime pay.
The subject of independent contractors is a hot political topic right now, drawing attention from President Obama and Hillary Clinton. Both political figures have made it a priority to crack down on employers who are misclassifying employees as independent contractors to dodge compliance regulations and cut costs. Earlier this month the Department of Labor (DOL) came out with detailed guidelines to address misclassification, making it very clear when a company is in violation. For employers, the best practice is to classify everyone as an employee unless they can clearly be defined as an independent contractor.
Employers may be classifying individuals as independent contractors, rather than employees, to avoid providing them with a range of benefits. The recent DOL release states that “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.” This has led to lawsuits and litigation against numerous companies around the treatment of independent contractors. Let’s take a closer look to understand why this issue is receiving so much scrutiny lately.
Are you ready for an audit? If your organization does business with the Federal Government and if you’re required to comply with any of the below regulations or acts, you are one of over 200,000 businesses subject to an audit by the Office of Federal Contract Compliance Programs (OFCCP).
- Executive Order 11246, as amended
- Section 503 of the Rehabilitation Act of 1973, as amended
- Vietnam Era Veterans’ Readjustment Assistance Act of 1974, as amended
- OFCCP’s regulations at 41 CFR Part 60
- Applicable case law
Whether the audit is a Desk Audit or an On-site Review, there are four possible investigative procedures that will be included.