Employee or Independent Contractor?
October 17, 2022
Posted October 17, 2022:
The U.S. Dept. of Labor (DOL) has issued a proposed rule that revises earlier guidance on how to determine who’s an employee or independent contractor under the Fair Labor Standards Act (FLSA). The proposed rule would reduce the risk that employees are misclassified as independent contractors, while providing added certainty for businesses that engage with individuals who are in business for themselves. The DOL explained that it’s rescinding a 2021 ruling on the topic and replacing it with an analysis for determining employee or independent contractor status that’s more consistent with the FLSA as interpreted by longstanding judicial precedent. For more information, click here.
Posted April 18, 2022:
Employee or independent contractor? When a court must decide how workers are to be classified, it looks at various factors. In one case, the U.S. Tax Court found that a provider of private duty nurses failed to classify 99 nurses as employees during 2016–2018. The factors considered included: the degree of control the company exercised over the work; the ability of the nurses to affect their own profit or loss; the investment of the nurses compared to that of the company; the permanency of the relationship; and the skills required to perform the job. Based on the court’s conclusion, the company was held liable for federal employment taxes and other taxes and penalties. (TC Memo 2022-35)
Meet the Expert
Chris Powers, CPA
Chris helps her clients confidently navigate tricky tax laws and complex regulatory challenges.
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