Classifying your workers as employees or independent contractors
can be quite the task for management and human resources. Making certain that
individuals are appropriately classified is vitally important to ensure
compliance with state and federal law, ensuring that administration is
correctly managed (payroll, insurance, etc.) and fines for incorrect
classification don’t hit your company.
The Internal Revenue Service (IRS) has created a “20 Factor Test” which consists of 20 criteria used to determine if an individual qualifies as an independent contractor. The factors are used primarily to evaluate the right to control (e.g., who has control over the scope of work performed) as well as other aspects of the job such as scheduling and location.
While a worker does not necessarily have to meet every criteria
to qualify for an independent contractor status, the IRS’s definition and general
rule of thumb states that: “independent contractors control the manner and
means by which contracted services, products, or results are achieved; the more
control a company exercises over how, when, where, and by whom work is
performed, the more likely the workers are employees, not independent
contractors.”
In the State of Oregon, a proposal has recently been made
that would slightly modify how the state classifies an independent contractor
versus an employee. Currently, a worker has to meet three out of the five requirements
that the state has laid out in order to achieve an independent contractor
status.
The proposed bill would add to the current list of criteria language
that would require that the individual does not perform the same type of work
that employees of that organization already do. For example, a law firm specializing
in family law and divorce would not be able to hire an attorney as an independent
contractor to work on cases involving divorce.
While this may seem like a very minor addition, this change could have a huge impact on how organizations classify their workers, including the reclassification of many individuals. Labor groups are largely in support of this bill, claiming that it will aid in the misclassification of individuals (those who are treated as independent contractors when they should be receiving the same benefits as employees, such as insurance benefits). However, many independent contractors believe that this could be hugely detrimental to their professional lives and careers.
HRCentral will stay abreast of progress made regarding this bill and will keep our clients and colleagues updated with any developments that would significantly alter the classification of their workers.
2018 has been a whirlwind year for employers. Countless regulations and laws affecting the employment and labor sectors were implemented which impacted organizations ranging in size and industry. Equal pay laws have gone into effect in states across the country, predictive scheduling has been implemented in countless larger cities, and paid sick leave laws are increasing in popularity in cities and states alike.
Much like its predecessor, 2019 is slated to have a number of impactful changes as well. Below are a few of the things to keep an eye out for, ideally to be able to proactively prepare for the change before it hits:
Minimum Wage Increases – As is the case at the start of nearly every year, many states will start the new year out with an increase in the minimum wage rate for employees. In 2019, twenty states will increase their minimum wage at the start of the year, with many others releasing increases at staggered time frames throughout the course of the year.
Strengthened Harassment Policies – In light of the highly publicized “Me Too” movement throughout the past year, it is no surprise that many states are tightening their policies on workplace harassment. For example, California has been ahead of the game in mandating anti-harassment training for supervisors every two years at organizations with more than 50 employees. This is changing in the North Bay area to affect employers with more than five employees.
Predictive Scheduling – Increasing in popularity, many additional cities are following the trend that Oregon has set with predictive scheduling. While the laws differ in specifics from location to location, a standard set of rules will apply to all policies: schedules must be posted in advance, typically 7 to 14 days ahead of the first scheduled shift; extra pay is provided to the employee if a scheduled shift is altered after it is posted; unless an employee volunteers to do so, there must be adequate rest periods given between shifts; and, employers must retain records relating to schedules for a set period of time.
Tipping Legislation – While many states have implemented similar legislation, at the federal level, significant legislative development has taken place over the past year that affects tipped employees. More specifically, a bill known simply as “The Act” has amended the Fair Labor Standards Act to prohibit an employer from keeping tips that have been received by their employees for any reason.
If any of the afore mentioned changes will impact your organization, contact HRCentral to see how we can assist you in updating policies and implementing these practices within your organization in a seamless and efficient way.
Like many state and federal employment and labor law updates, the majority of these regulations will result in updates to state and federal labor law posters. HRCentral provides this service to our clients and colleagues, so feel free to contact us to get a combined state and federal labor law poster ordered for your organization’s locations today!
HRCentral wishes you and your families a very Happy New Year!
Many employers are required by law to adhere to either state or federal employment law governing anti-discrimination in the workplace. Factors determining these requirements include organization size, industry, and location, but the guidelines remain fairly consistent across the board. The U.S. Department of Labor recently announced that Federal Contractors will be prohibited from discriminating against employees on the basis of sexual orientation or gender. This change is to take effect on April 4, 2015. (more…)
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