DOL: A Worker That Is Economically Dependent On an Employer Is an Employee, Not a Contractor

August 10, 2015

By: Kimberly Klein

One of the biggest challenges for an employer is realizing it has misclassified a group of workers as independent contractors. For the employer, correcting the misclassification means paying additional employment-related taxes; increased insurance costs, including worker's compensation and state unemployment insurance; paying overtime and minimum wage where applicable; and managing the worker the same way as it would other employees, such as providing leaves, accommodations and benefits.

Yet it is exactly these reasons that the U. S. Department of Labor (DOL) has been focused on the issue in recent years. Although the factors have not changed, the DOL recently issued guidance to employers as a reminder that most workers are employees, not independent contractors.

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