Worker Misclassifications: Ouch!! That's Gonna Leave a Mark
Independent Contractor or Employee?

In an August 2009 report, the U.S. Government Accountability Office (GAO) advised that government agencies need to start working together to effectively curb worker misclassification.  The GAO Report highlighted that not only is a substantial amount of tax revenue lost by the government when misclassifications occur, but also a whole host of labor laws intended to protect employees are violated or circumvented. 

In response to this report, the IRS specifically acknowledged that worker misclassifications will be an area of scrutiny over the next three years in the 6,000 employment tax audits it will be conducting.  On the heels of this, the Obama Administration has included in its 2011 legislative proposals actions targeted at increasing certainty surrounding classifications. It is believed that the increased enforcement efforts will result in an additional $7 billion in recovered taxes over the next 10 years.

Whether intentional or not, employers found guilty of misclassification may be liable for hefty fines and back taxes.  Add in the ever-present concern of class action litigation, including claims for unpaid overtime, minimum wage violations, and reimbursements under the Fair Labor Standards Act and state wage laws, and this is clearly an issue that employers must take seriously. With various agencies joining forces (including state legislators), companies simply must get their houses in order.

Join Seyfarth Shaw attorneys for the first session of a continuing series on the independent contractor classification, starting with an overview of the following topics:

• Which governmental bodies are actively pursuing this
• What laws a company violates when it misclassifies a worker—they are not just tax laws
• How to determine whether a worker can be properly classified as an independent contractor
• How to conduct a classification audit of your workforce
• How to protect your company from potential lawsuits and government audits
• Best practices and monitoring going forward

Our series will continue with in-depth coverage of several key areas of concern, including wage and hour violations, responding to agency audits, and managing and addressing misclassification problems.

Who Should Attend:

• In-house counsel responsible for employment, benefits or employee-related tax issues
• CFO or other persons responsible for tax return audits
• HR and benefits personnel who work on HR compliance (such as benefits and employment matters)
• Program administrators

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If you have any questions, please contact events@seyfarth.com.