Independent Contractor Compliance Blog - by Collabrus™

In November, after the election, I reported to you that President-Elect Obama and the Democrats were not the only winners.  Organized labor is also celebrating. Why? Because Obama was a co-sponsor of the Employee Free Choice Act (EFCA) and has promised as President he would sign it into law.

EFCA would result in some of the most important changes to the National Labor Relations Act since the passing of the 1935 Wagner Act. If passed, it makes the union’s job of organizing a company much easier than it has ever been.

On their website the Service Employees International Union, (SEIU) writes, “Barack Obama helped lead the fight for the Employee Free Choice Act in the Senate, and he’s promised to sign the bill as President. The Employee Free Choice Act will be among the priorities for President Obama and the new, pro-middle class Congress, but they need to see the broad public support for this much-needed change.”

A major provision of the EFCA

There are several significant provisions in this bill that will change the way the government, unions and employers interact, but possibility the most critical is replacing the current secret ballot process for workers to choose if they wish to unionize. It would allow the union to go from worker-to-worker and individually obtain the public signing of an authorization card. Many critics believe this will open the process to significant intimidation and corruption. The bill would remove the supervision and oversight of this process by the government. Everyone, on both sides of the issue, agrees this provision will make unionization of a company much easier.

The odds makers are betting the bill will become law in 2009, making your job more complicated.

Employees can be unionized-Independent Contractors can not.

Well, let’s make them ICs! I have encountered many businesses that have called their workers to a meeting on Friday and informed them on Monday they will all be IC’s. Then said, “Now get back to work!”

This is not the way to do it. Anything resembling a mandated reclass of your workers will guarantee not only union action, but tax audits and co-employment civil actions against your company.

Even the largest companies, with top attorneys advising them, have made the mistake of thinking they can safely designate an employee as an independent contractor by just making a few adjustments in title and tasks-remember Fed Ex? A true expert will be able to advise you if your model will hold up under fire from enforcement agencies or from civil lawsuits. If not, an expert will be able to provide you with options to save money and misclassification risks.