Are your workers misclassified? Treating independent contractors fairly

Companies often rely on outside help and freelancers for certain tasks, but this use demands that HR professionals take the lead in creating a system that correctly identifies independent contractors. Even if businesses think they have updated their policies recently, upcoming potential changes to labor laws may affect businesses and force them to reassess their workforce.

Last month, the Department of Labor (DoL) issued a statement that specifically addresses the ways employers can better define their relationship with their workers. Citing legal examples, the source highlights important factors like the duration of the work being done and the difference between the employer’s and employee’s relative investments.

Distinguishing independent contractors from regular full-time workers can be harder than it seems.

Following the Fair Labor Standards Act, many employees may be entitled to coverage that companies have to expect. The working relationship can be defined by the amount of “control” an employer has, and as the DoL points out, employers have more means of enforcing aspects of work behavior remotely in a way that constitutes “control.” However, this isn’t the only mitigating factor, and the “totality of circumstances” has to be considered to properly judge classification.

In a recent article for the OC Register, James McDonald of Fisher & Phillips LLP said that some of the apparent indicators of “regular” employment don’t necessarily apply.

“In some cases it’s black and white whether you’re an employee or independent contractor,” he said. “Many cases fall somewhere in the middle. Just the fact that a person has a company email address wouldn’t make them an employee, or being asked to attend meetings.”

HR consulting solutions can streamline the process of selecting, implementing and verifying an HR system, a process that can further lead to correct payment and benefits for all workers, no matter their status.