Independent Contractor Compliance Blog - by Collabrus™

Deputy Labor Secretary Seth Harris recently spoke in Washington DC, before the Center for American Progress, and stated his department intends to foster a stronger culture of IC compliance among employers to counter a practice he describes as, “they are playing a dangerous game of catch me if you can, and they are putting workers’ rights, even their lives, at risk…”

When stating employers are “putting…lives, at risk,” we can assume he is referring to safety rules that apply to employees, but not to independent contractors, such as in the coal mining and construction industries.

As a side issue: The coal mining industry is specifically coming under close scrutiny by the Obama administration for environmental and safety issues. To read more on this go to:  http://topics.nytimes.com/top/news/business/energy-environment/coal/index.html?inline=nyt-classifier

The Department of Labor wants companies to publish plans explaining why their consultants are IC’s.

This is just talk today-maybe a ping to see what kind of reaction they get from private industry.  But if the Department of Labor follows through it would require companies to prepare and adopt compliance plans aimed at ensuring they do not violate wage, job safety and equal employment laws. He indicated that the department’s proposed rules are still being drafted, and businesses will have a chance to respond before any final rules are issued.

What rules are being considered?

Deputy Secretary Harris said, “Employers will have to put together a plan that is designed to avoid violations of workplace laws…In safety and health, they will have to prepare a plan that will avoid safety hazard in the workplace. They will have to implement the plan, and they will have to make sure the plan, as implemented, is effective in avoiding violations for risks and hazards to workers.”

Or is it really about revenue?

During his speech, Mr. Harris also referred to Social Security Taxes as an example of how companies avoid paying their fair share by misclassifying workers. This ties in to the recent partnership formed by the IRS and the Department of Labor to work together to investigate and prosecute employers who misclassify workers. Both agencies have received a significant increase in their budgets to fund this partnership.

If you wish to read more about the partnership go to:

 U.S. Department of Labor Plans to Crack Down on Employee Misclassification

This is just another squall contributing to the Perfect IC Compliance Storm. Have you prepared your company? My recommendation: Do it now before an auditor knocks on your door.