The United States Department of Labor is continuing its fight against payroll fraud, this time issuing USDOL guidance on employee vs. independent contractor status. Here's the latest from the USDOL Labor Blog, by David Weil, administrator of the Department's Wage & Hour Division:
"Imagine working as a drywall installer building houses as an employee one day, but the next day, while performing the same work on the same site for the same company, you’re told you are now considered an independent contractor.
"You didn’t suddenly open a business of your own. Nothing about your work changed. But now, you’re told that since you’re no longer an employee, you’re no longer eligible for overtime pay, unemployment insurance, worker’s compensation or a host of other benefits that come with employee status.
"In recent years, employers have increasingly contracted out or otherwise shed activities to be performed by other entities through, for example, the use of subcontractors, temporary agencies, labor brokers, franchising, licensing and third-party management. Among the many consequences of these “fissured workplaces
,” misclassifying employees
as independent contractors is among the most damaging to workers and our economy.
"Whether a worker is an employee under the Fair Labor Standards Act is a legal question determined by the economic realities of the working relationship between the employer and the worker, not by job title or any agreement that the parties may make."