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Top 5 Friday - New Final IC Rule!

Posted by Stephen B. Rotter | Jan 12, 2024 | 0 Comments

Happy new year to all (even if LD says I'm too late )!

I've recently provided much advice and counsel, and engaged in litigation over, whether a worker is an employee or independent contractor. The reason employers are constantly facing IC issues is two-fold: 1. It can be extremely difficult for employers to understand the factors Courts assess when determining worker classification – especially when the analysis is the “totality of the circumstances” and judges have the discretion to weigh what they think is most important; and 2. States and the Federal Government have a vested interest in workers having an “employee” classification: employment taxes = $$$, as well as ensuring the protection of workers.

The Department of Labor's New Final Rule (until it changes in a few years) does not help matters, and appears to be as confusing as ever. However, it is the guidance we have to follow and put forth our best, good faith efforts to ensure we classify workers appropriately. The six-factors (plus a catch all, of course) are as follows:

1-Profit or Loss Opportunity
2-Worker and Employer Investment
3-Permanency of Work Relationship
5-Work Performed in Relation to Core Business
6-Skill and Initiative
7-Anything Else (demonstrating worker is self-employed or reliant on employer)

Please go here to see the DOL's real-world examples and guidance (not sure why it's the “small entity” guide when it applies to all-sized employers):

I typically recommend employers assume their workers are employees unless they can properly and reasonably articulate evidence underlying the above factors to a degree whereupon they would be comfortable stating the same on the stand, under oath, to a judge in their locale. Please reach out if you would like, or need, to discuss.

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