It is rare for a business to challenge an administrative determination concerning a single worker’s claim for unemployment insurance benefits. Indeed, many employers tend to delegate responsibility to handle administrative proceedings before state unemployment offices to companies providing “unemployment claims services.” This is because the issue in most unemployment cases
IC Diagnostics
KGB USA, Text Message and Internet Information Provider, Settles Independent Contractor Misclassification Claim with U.S. Department of Labor for $1.3 Million
Last week, kgb USA, which operates a text message and Internet-based information service, consented to the entry of a federal court judgment to pay $1.3 million in unpaid minimum wage and overtime wages to its 14,500 current and former “Special Agents” in settlement of claims brought by the U.S.…
Staffing and Workforce Solutions Company Using Independent Contractors Face Misclassification Liability and Expose Clients to Undue Risks
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…
New Federal Worker Misclassification Study: U.S. Department of Labor to Question Workers About Their Knowledge of Independent Contractor Misclassification
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…
Hidden Due Diligence Risk in Mergers, Acquisitions and Investments: Independent Contractor Misclassification Oftentimes Overlooked by Private Equity Firms, Hedge Funds and Other Investors
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…
Misinformation about Independent Contractor Misclassification
A year and a half ago today, my blog post was titled, “How to Make Sense Out of All Those Alerts About IC Misclassification.” I noted that, on a daily basis, I see an array of articles by lawyers warning businesses of impending doom if they continue to use independent…
Obama 2.0 and Independent Contractor Misclassification: The Next Four Years of Federal Legislative and Regulatory Activity
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…
Misclassifying the “Underground Workforce” as a Form of Independent Contractor Misclassification
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…
Military Government Contractor and Health Care Network Sued for Independent Contractor Misclassification
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…
Insurance Company Wins Challenge to its Independent Contractor Relationship with Agent
Having previously prevailed in two prior challenges by agents who claim they were not independent contractors (ICs) but rather employees, an insurer wins for a third time in a lawsuit by a Washington State insurance agent.
Claiming he was misclassified as an IC instead of an employee, the agent brought…