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Several comments filed by various industry groups on proposed regulations issued in January by the Internal Revenue Service have focused on worker classification ambiguities that are embedded in the “common law” standard for distinguishing between “common law employees” and bona fide non-employee service providers.  The IRS had issued proposed regulations…

February 2013

In the Courts:

  • Lowe’s Home Centers is sued by construction material installer engaged in installing fences, roofs, siding and decks for Lowe’s customers in a class action misclassification lawsuit. The installer seeks to represent himself and  all other similarly situated installers under the Illinois Employee Classification Act, seeking

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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…

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.…

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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