This month there have already been two cases in the staffing and workforce solutions industry that highlight the risks posed to that industry and their clients where the workers being referred are paid on a 1099 basis. One case arose in New York and involved workers referred to clients holding…

Buried in the Federal Register on January 11, 2013 is a proposal for the U.S. Department of Labor to conduct a study to “better understand employees’ experience with worker misclassification” by “measur[ing] workers’ knowledge about their current job classification, and their knowledge about the rights and benefits associated with their…

Many due diligence reviews in mergers, acquisitions and investments have ignored the issue of independent contractor (IC) misclassification liability. This is a difficult exposure to identify unless the legal team digs below the information typically provided by the seller or available in public records. In view of the crackdown by federal and state governments on the…

December 2012

In the Courts:

  • Nationwide food distribution company reportedly agrees in December 2012 to pay $3.53 million in allegedly unpaid employee benefits to settle proposed class action lawsuit by drivers delivering bakery goods in Connecticut and Massachusetts. Bimbo Foods Bakeries Distribution, owner and distributor of Sara Lee, Entenmann’s,

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The IRS earlier this week temporarily expanded the Voluntary Classification Settlement Program (VCSP), which was the subject of a prior post, to permit taxpayers who do not meet all of the conditions for the original Program to reclassify independent contractors as employees for federal employment tax purposes.  The expanded…

On December 12. 2012, Rep. Erik Paulsen (R. Minn.) introduced a bill that bears many similarities to a bill introduced earlier this year by 33 Democrats.  The Independent Contractor Tax Fairness and Simplification Act (H.R. 6653) would, like the Fair Playing Field Act (H.R. 4123) introduced…

The last four years started out with expectations that the federal government would enact legislation to curtail misclassification of employees as independent contractors (ICs).  Yet, not a single bill was enacted despite strong support by President Obama for Congressional action in the area of IC misclassification. Federal regulators, though, were…

The lead story in today’s front page of the Texas Tribune reports on a hearing before the Texas Workforce Commission where the testimony focused on the intersection of undocumented aliens and independent contractor misclassification. The hearing was held in advance of the Workforce Commission’s preparation for its upcoming legislative…

On October 2, 2012, a class action lawsuit was filed against MHN Government Services and its parent, Managed Health Network (MHN), claiming that the government contractor misclassified over 1,200 employees as independent contractors and, as a result, failed to pay massive amounts of overtime pay required under the federal wage…