Using independent contractors can help a business save money, but it’s important to know the line between an independent contractor and an employee.
Do you classify workers as independent contractors or employees? The difference could be very expensive for business owners, and the rules are in flux.
Businesses can save on employer taxes, overtime pay, worker’s compensation, and employee benefits when using independent contractors. But the worker classification rules, which the Biden Administration changed in 2022, are complicated.
And now things are getting even more complicated.
That’s because the U.S. Department of Labor recently published a list of all rules it is re-scrutinizing, and worker classifications are a priority. According to HR Dive, a human resources trade publication, the Labor Department “has already posted a bulletin to field staff directing employees not to enforce the Biden-era independent contractor rule and instead to apply earlier enforcement guidelines in certain matters.”
“There’s been sort of a shift back and forth in the interpretation and guidance with regard to independent contractor rules,” said Josh Ganz, a labor and employment attorney at Duffy North in Hatboro. “However, I think there’s still very much a baseline that you have to follow.”
So while these regulations are being readdressed, what should your business do to make sure you’re properly classifying your employees?
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