Independent contractor issues focus of briefing

On Tuesday, Nov. 15, Pepper Hamilton LLP and Kelly Services hosted an Independent Contractor Compliance Breakfast Briefing highlighting the regulatory and judicial challenges facing employers that use independent contractors (ICs); the exposures faced by companies in the areas of labor, tax, and employee benefits; and how businesses can continue to use ICs in compliance with the changing landscape of labor, tax, and employee benefit laws. The event took place at Pepper's office in Southfield. The use of ICs to complement a company's workforce is permitted in all states except one, but only if the structure of the IC relationship complies with applicable laws--both in writing and in fact. Now, employers are facing a crackdown on IC misclassification, including cooperative law enforcement initiatives by the U.S. Department of Labor and the IRS; new laws passed by nearly half of the states imposing stiffer penalties for misclassification; a new voluntary "classification settlement program" offered by the IRS; two misclassification bills introduced in Congress; and one class action after another seeking damages for violation of labor laws and unpaid employee benefits against employers alleged to have misclassified employees as ICs. Another prevalent type of exposure faced by employers is liability for unpaid unemployment tax and workers compensation premium payments for all similarly situated workers found to be misclassified as ICs. Those types of state regulatory challenges have increased exponentially and carry heavy penalties, especially for companies that make substantial use of ICs. The Nov. 15 presentation updated and complemented last year's Breakfast Briefing presented by Pepper Hamilton and its co-sponsor. Moderated by Kristen Means, Kelly Services director, Independent Contractor Solutions, the presentation by the co-chairs of Pepper's Independent Contractor Compliance Practice Group, including Lisa B. Petkun, Richard J. Reinstein, and Andrew J .Rudolph, provided attendees with state-of-the-art compliance alternatives and IC solutions designed to keep companies ahead of the curve (and their competition) and minimize or eliminate exposure to misclassification liability. Published: Thu, Dec 1, 2011

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