Dept. of Labor Releases Guidance on Worker Classification

Government agencies continue to set their sights on employers who misclassify workers as independent contractors.  In this regard, the U.S. Dept. of Labor has released a lengthy memo providing guidance in determining whether a given worker is in fact an employee versus an independent contractor under the Fair Labor Standards Act.  http://online.wsj.com/public/resources/documents/InterpretMisclass.pdf

In the memo, DOL goes as far to say that “most workers are employees under the FLSA’s broad definition” of “employ.”

Employers must understand that it does not necessarily pay to be “clever.”  Any savings to be gained in categorizing workers as independent contractors may be far outweighed by the liability exposure for getting it wrong.  Careful consideration must be given to all circumstances surrounding the relationship between the employer and worker in question before a determination of proper classification can be made.