California was one of the first states to enter into an information sharing agreement with the IRS regarding worker classification audits.  In fact, California is one of the only states to have two such agreements with the IRS – one is with the Franchise Tax Board and the other is with the Employment Development Department [...]

An I-9 audit, often called a “silent raid,” involves a thorough inspection of a business’s employee documents, principally I-9 forms and payroll information, by U.S. Immigrations and Customs Enforcement (ICE).  The goal is simple – to ensure that employees are legally authorized to work in the U.S. The cost however, is extensive. And it’s not [...]

The Connecticut and Rhode Island construction industry faces a significant increase in government scrutiny of their labor and employment practices over the next several years.  The U.S. Department of Labor (DOL) and the Connecticut DOL have joined forces to combat “widespread noncompliance with minimum wage, overtime and record-keeping provisions of the Fair Labor Standards Act.” [...]

You may have paid them as exempt employees or independent contractors, but your IT support workers may be eligible for overtime pay under the Fair Labor Standards Act (FLSA) despite being salaried, very well paid, and highly educated. Willful violators of the FLSA may be prosecuted criminally and fined up to $10,000. A second conviction may [...]

Would your company be willing accept a £5,000 fine for each terminated contract worker? Many UK organizations say “Yes”. But do they really have to bite the bullet? According to a recent study by the Association of Professional Staffing Companies (APSCo), nearly a third of UK organizations (29%) are likely to terminate contractor and temporary worker [...]

Many companies that fail a worker classification audit are caught off-guard – no surprise there.  However, many organizations that fail an audit thought they had an independent contractor compliance program in place.  These companies would only work with incorporated ICs – no 1099 is filed, and they weren’t working with an individual, right? Wrong.  The [...]

Does your company make independent contractor classification decisions based on the right criteria? Many organizations forget that it isn’t what you call your ICs, but how you treat them.  Earlier this month, the National Labor Relations Board (NLRB) found that symphony musicians in three different states were improperly classified as independent contractors.  While, in general, [...]

As the IRS closes the multi-billion dollar “tax gap”, the difference between taxes owed and taxes actually paid to the IRS, the number of audits have skyrocketed. The misclassification of illegal immigrants as independent contractors contributes significantly to that gap.  According to the Pew Hispanic Center in Washington D.C., more than $12 billion dollars in [...]

When it comes to classifying insurance agents, the state of California can’t seem to make up its mind.  On the one hand, state agencies such as the EDD have aggressively audited insurance companies over the past few years and found some insurance agents to be employees. However, a California appeals court recently ruled that an [...]

If monetary penalties and bad PR were not enough of a deterrent for independent contractor misclassification, Massachusetts has upped the ante with a two-year jail sentence. On Monday, a Massachusetts judge forced a roofing company to pay extensive back wages, fines and penalties.  As for the owners? One received two years in jail, five years [...]