Officials at the U.S. Department of Labor (DOL) are addressing the problem of worker misclassification, a hot topic among certain industries that heavily rely on independent contractors.
Providing in-depth guidelines regarding how employers should classify employees versus independent contractors, the DOL published a 15-page “Administrator’s Interpretation” that essentially states that workers who are economically dependent on their employers should be classified as employees, not independent contractors.
Additionally, the DOL has noted that:
When employers improperly classify employees as independent contractors, the employees may not receive important workplace protections such as the minimum wage, overtime compensation, unemployment insurance, and workers’ compensation. Misclassification also results in lower tax revenues for government and an uneven playing field for employers who properly classify their workers.
Factors Employers Should Consider When Classifying Workers
Clarifying how employers should classify workers, the DOL pointed out that the following factors should be taken into consideration, with no single factor being weighed more heavily than another:
- The permanency of the relationship
- The nature of the work – and, specifically, whether it is crucial to the business operations and whether it requires specialized business or managerial skills
- The relative investments of the employer versus the worker – and, more specifically, whether the worker has invested in a business
- The degree of control held by the employer versus the worker.
As the DOL has explained, “most workers are employees under the FLSA.”
Next Steps for Employers
At the point, the DOL is encouraging employers throughout the U.S. to review how they have classified their workers and adjust the classifications if necessary.
Employees who believe that they have been the target of misclassification are encouraged to speak with an experienced lawyer to find out more about their rights and receive a thorough case evaluation.
Contact a Los Angeles Employment Lawyer at Moon and Yang
Have you been misclassified by an employer? Or have your workplace rights been violated? If so, you can turn to an experienced Los Angeles employment lawyer at the Moon and Yang for aggressive, effective legal advocacy in your pursuit of justice.
At Moon & Yang, our lawyers have a strong commitment to our clients and bring substantial experience, legal knowledge and effective resources to both simple and complex legal matters. In various legal areas, we have helped our clients achieve short-term and long-term goals while keeping a realistic assessment of what to expect in the future.
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